Chinese Nationals Exploit Nepal Visa Rules via Shell Companies, Reports Say

(BIRGUNJ) Civil society groups and local officials in Nepal are raising alarms over a growing pattern in which Chinese nationals are allegedly using Nepali proxies and shell companies to sidestep visa policies and run businesses in border cities, with Birgunj at the center of fresh scrutiny.

Reports through August 2025 describe supermarkets and trading firms officially registered under Nepali names but managed day to day by Chinese citizens who hold tourist or other non-business visas. As of September 1, 2025, preliminary inquiries are underway, and pressure for a policy review is building nationwide.

The Ren Ren Le Supermarket case

The clearest case flagged by activists involves the Ren Ren Le Supermarket in Birgunj. Documents cited by campaigners show the store’s official ownership rests with a Nepali citizen. However, local observers and civil society organizers say Chinese nationals appear to control operations and profits while on visas that don’t allow them to run a business.

Rastriya Ekata Abhiyan, a civil society group, has:

• Submitted a formal memorandum to the Chief District Officer of Parsa District seeking immediate checks on visa status
• Asked for disclosure of beneficial ownership
• Called for action if rules were broken

The group’s president, Binay Yadav, warned that lax enforcement could harm local commerce and erode trust in public institutions.

Visa system features at the core of complaints

At the core of these complaints are long-standing features of Nepal’s visa system:

• The country issues tourist visas on arrival at airports and land borders, and extensions are routine.
• Chinese nationals receive a Gratis Visa (free visa) for up to 150 days per year, a policy designed to support tourism and warm ties.
• Officials from China may qualify for exemptions under reciprocal arrangements.

Watchdog groups say a minority misuse the system by overstaying, stacking extensions, or switching visa categories through intermediaries, then using Nepali proxies to register companies and hide who benefits.

Policy features now under scrutiny

• Nepal’s visa-on-arrival system makes entry simple for tourists of most nationalities, including Chinese visitors.
• Tourist visas can be extended at the Department of Immigration.
• Visa extension fees: USD 45 for 15 days, then USD 3 per day for longer extensions.
• Overstay fines: USD 5 per day.
• Under the Foreign Investment and Technology Transfer Act, foreign citizens who want to run a business must:
  • Use formal channels
  • Meet minimum investment thresholds
  • Obtain government approval
• Activists and legal experts say shell companies—firms that exist on paper with a local figurehead—are being used to bypass those rules and keep actual control hidden.

Extent of the problem and official response

• Authorities have not published a full count of suspected cases.
• Local reporting and civil society investigations indicate at least dozens of businesses in border hubs operate through proxies, with Birgunj and other trade corridors receiving the most attention.
• The Department of Immigration has been informally alerted in several districts and is conducting initial checks.
• No official policy shift has been announced yet, but discussions include:
  • A tighter stance on extensions
  • Stronger scrutiny of business-linked visas
  • More rigorous documentation reviews

Why Birgunj is a focal point

Birgunj’s position along key trade routes to India makes it a hub for retail and logistics. That connectivity also raises red flags when oversight is weak.

Concerns from legal practitioners and labor groups:

• Foreign-run businesses operating outside the law can distort local markets by avoiding tax and compliance costs, pricing below fair levels, and squeezing micro and small retailers.
• Unregulated foreign-backed shops can ignore wage and safety rules, leaving Nepali workers exposed.

Proposed enforcement and policy measures

Advocates pressing for enforcement emphasize targeted action, not border closures. Their proposed measures include:

1. Verification of visa and residency status for foreign nationals involved in any commercial activity
2. Public disclosure of beneficial ownership for companies in high-risk sectors and border zones
3. Suspension or revocation of licenses where owners or managers violate visa conditions
4. Better data-sharing between district offices, tax authorities, and immigration

Business groups want predictability and even-handed enforcement. They argue fair competition supports law-abiding Nepali traders who follow tax and licensing rules.

Practical enforcement steps under discussion

• Improve screening when tourists apply for extensions: officers should check whether an applicant appears to be working or managing a business and require the correct visa type.
• Conduct targeted field verification for front-line businesses in border areas. If paperwork shows a Nepali owner but day-to-day control rests with foreign citizens, refer the case for deeper review (tax and labor inspections).
• Adopt a risk-based approach concentrating checks on sectors and locations where shell companies are most common:
  • Supermarkets
  • Small trading firms
  • Logistics depots in border cities
• Coordinate with company registrars to flag sudden changes in ownership or management that might indicate proxy structures.
• Increase inter-agency data-sharing to bridge immigration and corporate registries, making it harder to hide beneficial ownership.

“When governments pair visa screening with beneficial ownership rules, abuse drops because offenders find it harder to hide behind local proxies.” — VisaVerge.com (as cited by campaigners)

Individual responsibilities and legal risks

For travelers and would-be investors:

• Tourists should avoid any paid work or business management while on a tourist visa.
• Anyone planning to invest or operate a company should seek the correct visa and approvals under investment laws.
• Overstaying exposes travelers to fines and possible bans; working without authorization can lead to cancellation of stay and removal.
• Lawyers in Kathmandu stress switching to an appropriate visa before starting business activity to protect both the foreign national and local staff.

Challenges for regulators

• District immigration offices face bandwidth constraints, balancing hospitality to visitors with checks that catch abuse.
• Even if the number of suspected cases is in the dozens rather than thousands, small numbers can have outsized effects in narrow retail niches, especially when undercutting prices are backed by tax evasion or informal supply chains.
• Obscured ownership also raises concerns about smuggling and money laundering in trade corridors.

Transparency, coordination, and next steps

Government sources say any rule changes must be issued through formal notices and coordinated across ministries. Potential measures include:

• Tighter oversight of repeated tourist extensions
• Stricter checks for visa category shifts
• Random audits of businesses in border zones to compare registered owners with real managers
• Publication of regular enforcement statistics to track progress

For up-to-date entry and stay requirements, fees, and procedures, applicants can consult the Nepal Department of Immigration: https://www.immigration.gov.np.

Civil society recommendations for local employers:

• Keep clear records of staff roles
• Issue visitor badges for foreign consultants
• Use contracts that match visa permissions

Potential precedent and broader implications

If enforcement proceeds transparently in cases like the Birgunj supermarket, lawyers say it could set a national precedent and provide district offices with a template for handling suspected shell companies. That could:

• Improve cross-agency coordination
• Reduce abuse of visa policies as a backdoor to business control
• Send a message that visa conditions will be enforced consistently

Conclusion: balancing openness and guardrails

The proposed path forward blends openness with guardrails:

• Keep tourism welcoming, but verify who runs businesses
• Keep visa policies simple, but tighten checks where abuse is likely
• Keep investment doors open, but insist that foreign owners follow the law rather than work through proxies

In Birgunj and beyond, how Nepal balances these goals will determine whether the current concerns fade or become a structural problem that is harder to fix later.