Robert Penner was arrested from Lalitpur on a request from the Department of Immigration (DoI), Nepalease media reported.
DoI Director-General Kedar Neupane said Penner was arrested to probe his posts on social media which are "liable to incite" social disharmony in the nation.
Penner had obtained working visa for a sprout technology company, which was already dissolved in 2012, but worked for Cloud Factory, a foreign outsourcing company, according to the DoI.
Penner is also accused of holding multiple visas and overstaying.
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The report said immigration laws bar any foreign national from expressing public comments on internal politics of the host nation.
A source at the DoI told MyRepublica that they received complaints that Penner had been engaging in activities that could harm Nepal's national integrity.
"We had to arrest him due to his suspicious activities and for misusing his visa," said the source.
Penner has previously tweeted in favour of the Madhes movement. He had also written controversial tweets about the arrest of journalist Kanak Mani Dixit, MyRepublica reported.
They had enforced months-long blockade of Nepal's all trading points with India, creating huge shortage of essential commodities in the country.