Chinese Nationals Exploit Nepal’s Visa Policies Through Shell Companies, Recent Reports Reveal

Recent reports reveal that Chinese nationals are increasingly exploiting Nepal’s visa policies to extend their stay in the country. This is primarily achieved by establishing shell companies for the sole purpose of securing business visas, which allow them to prolong their stay beyond the initial free tourist visa period. These companies, often created on paper, become inactive once the visa extension is granted, raising concerns about the misuse of Nepal’s lenient visa regulations.

Since 2016, Nepal has offered Chinese nationals a free 150-day tourist visa to boost tourism. While this policy has significantly increased the number of Chinese tourists, many have exploited it by transitioning to business visas after the initial period expires. By paying $125 for each business visa extension, they can extend their stay twice, totaling an additional six months for just $250. This relatively low cost allows them to remain in Nepal for up to 11 months before returning to China, only to re-enter Nepal on a new tourist visa after a short interval and repeat the cycle.

According to Nepal’s Department of Immigration, between July 13, 2024, and July 2025, a total of 1,891 business visas were issued, with 1,293 (approximately 68%) granted to Chinese nationals. Of these, 95% are believed to have used the business visa to extend their stay after exhausting the 150-day tourist visa, typically adding two three-month extensions. These individuals often submit minimal documentation, such as employee details and basic business plans, to secure visa extensions, exploiting procedural loopholes.

Investigations reveal that many Chinese nationals show little interest in registering businesses during the initial five-month tourist visa period. However, as their visa nears expiration, they hastily register shell companies, primarily in the information technology (IT) sector, to qualify for business visas. These companies often exist only on paper, with minimal operations—typically a small office, a few laptops, and a handful of employees. The Department of Immigration has noted that these businesses are frequently abandoned once the visa extension is secured.

Nepal’s Department of Industry requires businesses to submit inspection reports detailing investment, employee numbers, and company objectives for visa extensions. However, the lack of coordination between the Department of Immigration and Department of Industry, combined with reduced on-site inspections, has made it easier for these companies to evade scrutiny. The absence of rigorous monitoring has allowed these shell companies to proliferate, undermining the credibility of Nepal’s visa system.

The rise of small-scale IT companies has posed significant challenges for Nepal’s regulatory bodies. Unlike traditional industries, IT businesses often require minimal physical infrastructure, making it difficult to verify their legitimacy. During inspections, officials frequently encounter small setups with limited staff, who claim that such operations are typical for IT firms.

The Department of Industry has highlighted that the lack of a minimum investment threshold for foreign investment in the IT sector has fueled this trend. Companies are registered with investments as low as NPR 200,000 to 2.5 million (approximately $1,500 to $18,700), and some demonstrate minimal transactions to appear legitimate, securing further visa extensions.

Nepal’s push to become an IT hub has led to an open invitation for foreign investment, further complicating oversight. The absence of a clear investment ceiling and inadequate monitoring mechanisms have created a loophole that facilitates visa misuse.

The Department of Immigration has expressed concern over the high rate of visa transitions among Chinese nationals, particularly in light of their involvement in criminal activities. Excluding Indian nationals, Chinese citizens top the list of foreigners involved in crimes in Nepal.

In the fiscal year 2023/24, out of 91 foreign nationals arrested for alleged crimes, 28 were Chinese. Similarly, from April 2024 to May 2025, 28 out of 89 foreign nationals arrested for crimes were Chinese, followed by Bangladeshi nationals. Crimes linked to Chinese nationals include operating illegal call centers, ATM theft, gold smuggling, and illegal currency transactions.

The Department of Industry has urged authorities to introduce a minimum investment threshold for the IT sector and strengthen monitoring mechanisms to curb visa misuse. The lack of effective regulation for small-scale investments has created long-term challenges, with shell companies exploiting procedural gaps. Both the Department of Immigration and Department of Industry are grappling with the complexities of this issue, as the reliance on paperwork alone undermines the integrity of the visa system.

The misuse of Nepal’s visa policies by Chinese nationals through the creation of shell companies, particularly in the IT sector, has raised significant concerns. The trend of extending stays through business visas, coupled with inadequate oversight and the lack of a minimum investment threshold, has strained Nepal’s regulatory framework.

Authorities emphasize the urgent need for stricter policies, enhanced monitoring, and coordination between departments to address this growing issue. Without effective measures, the exploitation of visa policies and the associated rise in criminal activities could pose long-term challenges for Nepal’s immigration and economic systems.