WHY NEPAL
Why Nepal?
THE BRIDGE
The human bridge already exists
The relationship between Nepal and Japan is not something to be created. It is already there. More than 273,000 Nepali nationals live in Japan, the fifth-largest foreign community. More than 100,000 Nepali students are enrolled in Japanese higher education, second only to China.
In practical terms: there is already a deep pool of people who understand Japanese and know how a Japanese workplace operates. Few emerging markets can say that.
Meanwhile only 35 Japanese companies operate in Nepal across 46 establishments, and bilateral trade runs at roughly USD 37 million a year. Set against the size of the two economies, those are very small numbers. We read them as meaning the market is not yet crowded.
THE NUMBERS
Key indicators
273,229
Nepali residents in Japan
5th-largest nationality, 6.9% of all foreign residents; +32.1% year on year.
Source：Immigration Services Agency of JapanJune 2025
100,239
Nepali students enrolled in Japan
2nd-largest source country after China, 24.6% of all international students; +54.7% year on year.
Source：MEXT (Japan)1 May 2025
515M
IT / ITES export value (USD)
+64.2% year on year. 106 companies and c.14,700 employees, plus c.51,800 freelancers. Equal to 1.4% of GDP and 5.5% of foreign reserves.
Source：IIDS, “Unleashing IT”2022 data, published 2024
42,000MW
Economically feasible hydropower potential
Technical potential is c.83,000 MW. As of 2025 only c.7.5% of the economically feasible capacity has been developed.
Source：US International Trade Administration and technical literature2025
65.7%
Share of population aged 15–64
Total population 29,164,578. Median age is estimated at c.25, a young structure even by South Asian standards.
Source：Central Bureau of Statistics, Nepal2021 census
#58
English Proficiency Index (world rank)
Score 514, “Moderate” band, the only South Asian country at that level. English is widely used in filings and higher education.
Source：EF EPI2025
c.26.9%
Remittances as share of GDP
Among the highest in the world, an indicator both of the scale of Nepali talent working abroad and of the country's foreign-currency inflows.
Source：World Bank2023
35
Japanese companies operating in Nepal
46 establishments. Japan accounts for c.0.8% of Nepal's cumulative inward FDI stock (11th). The number is small, which is precisely where the first-mover room is.
Source：JETRO2025, JETRO report
c.$37M
Japan–Nepal bilateral trade (USD)
c.USD 21.4m exported from Japan, c.USD 15.9m imported into Japan. Very small relative to both economies, and therefore a large open runway.
Source：UN Comtrade2024
SECTORS
Where the opportunity is most concrete
- 01
IT and ITES
IT/ITES exports reached USD 515m in 2022, up 64.2% year on year, across 106 companies plus a freelance population of roughly 50,000. That is a realistic base for Japan-facing offshore development and BPO.
- 02
Renewable energy
Economically feasible hydropower potential is around 42,000 MW, of which roughly 7.5% has been developed as of 2025. It is capital- and patience-intensive, which suits the character of Japanese operators.
- 03
Agriculture and food processing
Much of the chain from production through processing to distribution is unbuilt, leaving room for technology transfer and capital equipment.
- 04
Talent and education
Large-scale movement of people to Japan already exists. Engaging at the training stage, before departure rather than after, is how quality and retention improve.
- 05
Tourism and hospitality
Genuine reasons to visit, and clear room to introduce Japanese standards of operation.
- 06
Manufacturing and logistics
Positioned between two very large markets. Being landlocked, however, means logistics assumptions must be tested rather than assumed.
IN FAIRNESS
We are not going to give you only the optimistic half.
Real GDP growth was 3.87% in FY2023/24, but projections for FY2025/26 have since been revised down to 2.1–2.3%, with wider ranges cited in assessments that account for the social unrest of September 2025. These figures move; each is stated as of its publication.
Nepal is also seeking a three-year deferral of its scheduled graduation from Least Developed Country status on 24 November 2026, citing economic constraints (as of May 2026). That date may change.
There is no double taxation avoidance agreement between Japan and Nepal. Nepal has treaties with 11 countries; Japan is not among them. Relief from double taxation therefore has to be considered case by case under Japanese domestic law.
Landlocked logistics, power supply, and the variability of administrative timelines are all factors to price in from the start. We are not going to recommend an entry while leaving them out of the conversation.
This site provides general information only and is not legal, tax or investment advice. Regulations change. Please confirm against current primary sources and with your own advisers before acting.
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