If you throw a stone near any college in Kathmandu, it’ll likely land on someone studying IT.

CSIT, BIM, BIT, AI, Data Science, Cyber Security. You name it, someone’s studying it. Bootcamps are full, YouTube is full of Nepali tutors teaching Python. And almost everyone has at least one cousin who’s “building an app” or “learning Java” on the side.

So when news broke that Microsoft is shutting down its local office in Pakistan after 25 years, people started whispering:

“What if they come to Nepal instead?”

Sounds exciting, no?

We’ve got the graduates. We’ve got decent internet now. Even the government has built something called the “Digital Nepal Framework”. And every once in a while, someone from Singha Durbar says “AI” in a speech.

But let’s be honest for a second.

Just because everyone’s studying IT doesn’t mean we’re producing the kind of industry-ready engineers that a company like Microsoft needs. And just because we’re small and peaceful doesn’t mean we’re automatically attractive to Big Tech.

So today, let’s talk about this.
Why Microsoft left Pakistan.
Where Nepal stands in all of this.
And what we actually need to do if we want them (or anyone big) to take us seriously.

The Big Tech Exit Everyone’s Talking About

So here’s what happened.

In early July 2025, Microsoft officially shut down its operations in Pakistan.
After two and a half decades, they just packed up. The five employees left were let go. And from now on, any Pakistani using any Microsoft product (Office 365, Azure, Teams), gets it through resellers, and contracts are managed from Microsoft Ireland.

Jawwad Rehman, the one who helped bring Microsoft to Pakistan in the first place, called it “more than just a business decision.”
The Pakistani government, of course, tried to make it sound nice by saying “We’re shifting to a cloud-first model!” they said. But it felt more like damage control than strategy.

And the irony of it all? At the same time Microsoft is walking out, Google is walking in.

Yep, Google’s investing more in Pakistan; assembling Chromebooks locally, running tech training for youth, even working with the government to boost IT exports.

So naturally, people started comparing:
Why is Microsoft saying goodbye while Google’s going all in?

Why Microsoft Left (Spoiler: It’s Not Just About Business)

First off, this isn’t just Pakistan’s fault. Microsoft is going through a bit of a spring cleaning worldwide.

In 2025, they cut around 9,000 jobs globally, trying to become leaner, shift more focus to AI, and reduce dependency on physical offices in markets that aren’t delivering massive returns.

Now Pakistan? They didn’t have any engineering teams there. Just a small liaison office doing sales and basic support.

So when the time came to “optimize resources,” it was an easy cut.

But that’s not the full story.
The real problem is that Pakistan made it too hard for Microsoft to stay.

Let’s look at the mess:

• Currency chaos – the Pakistani rupee’s been falling like crazy

• High taxes – not very startup or foreign-investor friendly (Corporate Income Tax Rate: 29%)

• Unclear rules – import restrictions, sudden regulation changes, and general red tape

• Political drama – new ministers every few months, each with new ideas

By mid-2025, their foreign reserves were down to $11.5 billion, and the trade deficit hit $24.4 billion. That’s not a great environment for any global company, let alone one dealing in tech imports and cloud services.

So Microsoft, logically enough, quietly showed themselves the door.

What This Means for the Region

This is more than just a “Pakistan problem.” It’s actually part of a bigger trend.

Tech giants are looking at South Asia and asking:
“Where should we go deep, and where should we just sell from afar?”

And the map’s changing too fast.

• India? This one is Microsoft’s golden child. Huge R&D campuses. Tens of thousands of engineers. They’re all in.

• Bangladesh? Not flashy, but they’ve got a massive freelancing base and are slowly building tech zones.

• Sri Lanka? They’re pitching tax incentives and IT parks to attract global firms.

Meanwhile, Pakistan just moved from ‘strategic presence’ to ‘partner-led market’.

And what about Nepal?

Well, we’ve been in that category all along.

Microsoft in Nepal: Already Here, Kinda

Let’s not kid ourselves.

There’s no Microsoft office in Nepal. Never has been.

But that doesn’t mean Microsoft isn’t around.

Businesses, schools, banks, even government departments use Microsoft products. Office 365, Teams, Azure, Excel to make your tax sheets look fancy. We use it all.

But the way we access them is simple: resellers.
Microsoft sells to us through authorized local partners, and those partners handle everything from licenses, billing to basic support. That way, no direct hiring is required. No need for an office. No need to pay engineers.

In Microsoft’s internal map, Nepal is what you’d call a “low-volume, low-maintenance” market.

They don’t hate us, but we’re just not worth setting up shop for.

But could that change?

Is Nepal Ready for a Microsoft Move-In?

Yes, we love saying “Digital Nepal” every chance we get.

Yes, we’ve got plenty of IT students.

But ask any local tech founder and they’ll tell you the same thing:

“We don’t have a shortage of grads. We have a shortage of job-ready people.”

No surprise there. Too many students spend four years memorizing theory, attending outdated lectures, and building a weather app in Java that no one will ever use.

And just when they get good, they’re gone.
Australia. Germany. Japan. Canada.
Basically anywhere but here.

And no, the occasional hackathon or “Tech Festival 2081” isn’t enough to fix this crisis.

So we’ve got numbers (kind of). But depth? That’s the real question.

1. What We Actually Bring to the Table

That said, Nepal does have things going for it.

For one, cost-efficiency. A solid engineer in Nepal costs a fraction of what someone in Singapore or even Bangalore would. And that matters a lot, especially for companies looking to build lean, high-output teams without burning a hole in their cloud budget.

Then there’s tax. IT and BPO companies exporting services only pay 5% corporate tax, one of the lowest in the region. That’s a serious advantage for any company considering long-term operations here.

And yes, we’ve got some genuinely solid talent. Smart, fast-learning, globally aware engineers. Companies like Codegate, Flextecs, Leapfrog, and a bunch of bootstrapped SaaS teams are already doing serious work, quietly building products that serve clients across the world.

So yeah, there’s potential.

But then, we shoot ourselves in the foot.

2. The Trust Gap

Let’s say a company like Microsoft is scanning the region.

They see Nepal. They see the young population. The low costs. The energy.
And then they see:

• A spot on the FATF grey list

• Foreign investment numbers that keep dropping

• And tax disputes that feel more like plotlines from a political thriller

Take the Cotiviti case, for example.

It was one of Nepal’s biggest IT exporters, serving a US parent company, creating hundreds of jobs. But after a messy VAT dispute with the government, they shut down operations. Just like that.

The legal jargon aside, the takeaway for the global tech community was simple: even if they play by the rules, they might end up in the dark.

That’s the kind of uncertainty that kills confidence.

Because more than cost and code, companies like Microsoft invest in trust.

And right now, Nepal’s got some work to do on that front.

What Nepal Needs to Do (If It Wants More Than Just a Microsoft Sales Rep)

If we’re serious about making Nepal a real tech destination; not just for Microsoft, but any global player, we’ve got some homework to do.

Here’s what that looks like:

1. Invest in engineering, not just degrees

We’ve got plenty of smart students. That’s not the problem.

The problem is we hand them a degree after four years and send them into the job market with zero real-world experience. Most haven’t worked on a live project, contributed to open-source, or collaborated in a real dev team.

If we want to produce engineers Microsoft would hire, not just graduates who “know Java”, we need to fix how we train them.

That means tighter industry-college collaboration, where companies actively help shape the curriculum based on what they look for in freshers. 

It means hiring lecturers with actual dev experience, not just academic credentials. And it means making paid internships the norm, not the exception.

2. Make our tax advantage work harder

Nepal’s market is small. Microsoft doesn’t care that we’ve got a few hundred thousand Office users. So we need to get creative.

Luckily, we’ve got a great card to play: taxes.

Exporting IT services from Nepal? You only pay 5% corporate tax. That’s lower than Singapore, lower than Dubai.

But the problem is, companies don’t trust it.

Because just when things are going well, someone from the tax office wakes up and decides your business model doesn’t “feel” like an export. One random audit, and boom: you could be facing billions in retroactive penalties.

So here’s what we need to do:

• Lock that 5% tax in for 10 years. No surprises. No sudden reinterpretations.
  

• Offer payroll tax breaks for companies that hire and train local engineers, especially outside Kathmandu.
  

• And make the VAT refund process less like pulling teeth. Fast-track it. Automate it. Stop acting like we’re asking for a loan.

Because if the rules feel like they’re made up on the spot, even 0% tax won’t matter.

3. Build a "Tech Liaison Taskforce"

That sounds bureaucratic. But hear us out.

Nepal needs a dedicated team that understands both tech and government bureaucracy. People who can sit across the table from Microsoft, Meta, or Amazon and say:
“We understand what you need. Here’s how we can make it easy for you to enter, hire, build, and stay.”

It’s what India’s done brilliantly. And it's what we haven’t even started.

Basically, Nepal is more "almost there" than "ready for rollout."

But we can change that.

We just need to stop asking “Why doesn’t Microsoft come to Nepal?”
and start working on “What can we do to make them stay when they do?”

Final Thoughts: Pakistan’s Loss, Nepal’s Window?

Microsoft leaving Pakistan is actually a regional signal for all of us.

One that says “Even the biggest tech companies won’t stick around if things get messy.”

And it also says “If you're a small country but relatively stable, thoughtful, and ready to play the long game, you might just get a shot.”

Nepal’s not India. We may never host a billion-dollar data center.
But we also aren’t trying to be India.

What we can be is a smart, flexible, high-potential tech hub.
A place where global companies test new ideas, build small agile teams, and invest in digital education.

But none of that will happen if we stay in “let’s wait and see” mode.

We’ve got to make a move, not just wait for someone to make it for us.

The world’s watching South Asia.
Let’s make sure Nepal isn’t just a quiet mountain country between India and China.

Let’s make it a name worth circling on that map.

So, What’s In It for the Diaspora?

Wherever you might be reading this from, you might be wondering:

“Cool story, but what’s it got to do with me?” Actually? Everything.

Because while Nepal is still trying to figure out how to become “tech-ready,” you’ve already lived it.
You know what solid systems look like.
You’ve worked in teams that ship fast, think global, and scale without drama.
You’ve seen how things should work.

And whether you realise it or not, you carry a credibility that folks back home are still trying to earn.

Your voice in the right room; on a Zoom call, in a board meeting, over coffee with a decision-maker, can open doors that Nepali startups alone can’t.

So when someone at work says,

“We’re looking at new markets in Asia,” 

 you can say,
“Hey, have you considered Nepal?”

You don’t need to move back. You don’t have to post #BackToMyRoots on Instagram.

But you can be the quiet link that makes something bigger happen.

Just stay plugged in.
Be the bridge.
Make Nepal part of your story, even from a distance.

Because if Microsoft (or anyone else) ever does take a real bet on Nepal,
chances are, it’ll be because someone like you  nudged the right door open at the right time.

So yeah, you’re not just a spectator in this story.
You’re a plot twist.

Now the question is: do you want to write that next chapter, or just watch it unfold?

Before We Wrap Up,

We just launched the Nepali Diaspora Professional & Business Directory Nepali Dias!

Whether you’re an immigration lawyer in Texas, a tax consultant in Dubai, or a real estate agent in Sydney, if you offer a service, this is where the diaspora can now find you, trust you, and reach you directly.

Whether you want to grow your practice or simply help your community find the right expert,
This directory is where it starts.

It’s built for trust. It’s built for growth. And it’s free to join.

🔗 Get listed here and grow your presence in the global Nepali community.
Let’s make sure our people can find and support our people, wherever in the world they may be.

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