The helicopter, operated by Dynasty air crashed into a Himalayan forest in Shivapuri National Park of Nuwakot district, 57 km (35 miles) from the capital, deputy Chief District Officer Krishna Prasad Humagain said.
Police spokesman Dan Bahadur Karki confirmed all four passengers were Chinese nationals, three men and one woman, while the pilot was a Nepali male.
Local residents saw a fire emanating from the forest and alerted authorities, he said.
The helicopter, which was en route to Rasuwa district from Kathmandu on Wednesday afternoon, lost contact with air traffic control three minutes after takeoff, the Civil Aviation Authority of Nepal said in a statement.
More than 360 people have died in plane or helicopter crashes in Nepal in the past 24 years.
Wedged between India and China, landlocked Nepal is home to eight of the world's 14 highest peaks, and its planes often service small airports nestled in remote hills or near peaks blanketed in clouds.
