Professional Documents
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"Foreign investment" means the following investment made by a foreign investor in an industry or a company:
a) Share investment made in foreign currency;
b) Reinvestment of the dividend received from foreign currency or share in an industry;
c) Lease financing;
d) Investment made in venture capital fund;
e) Investment made in listed securities through secondary securities market;
f) Investment made by acquiring share or assets of a company incorporated in Nepal;
g) Investment received through banking channel after issue of securities in foreign capital market by an industry or a
company incorporated in Nepal;
h) Investment made through technology transfer; or
i) Investment maintained by establishing and expanding an industry in Nepal.
"Technology transfer" means the transfer of technology to be made under an agreement, on the following matters, between
an industry and a foreign investor:
a) Patent, design, trademark, goodwill, technological specialization, formula or process;
b) User's license, know-how sharing or franchise;
c) Providing foreign technical consultancy, management and marketing services, or other technical skill or knowledge.
The Government of Nepal may make necessary arrangements for providing exemptions, facilities, concessions or services
to be provided to the foreign investor under this Act or prevailing law from One-Point Service Center and the necessary
arrangements shall be made for providing the following services respectively:
(a) Registration of industry and its administration;
(b) Approval of foreign investment and loan;
(c) Registration of company and its administration
(d) Labor approval;
(e) Visa facility;
(f) Measurement and control of quality of goods produced from an industry;
(g) Approval of environmental study report;
(h) Energy and infrastructure development and coordination necessary for such development and focal point for other
bodies;
(i) Other exemptions and facilities to be enjoyed by industries;
(j) Act of providing permanent account number;
(k) Approval for foreign exchange;
(l) Any service related with other acts to be done for industries under this Act and Rules framed under this Act
No foreign investment shall be made in an industry mentioned in Annex from profit made by an industry operated from
foreign investment or in any other manner.
Provided that, technology transfer may be made, with the approval of Department, to an industry established in Nepalese
investment mentioned in Annex.
Annex: Industry or business not opened to foreign investment
Business of animal or bird husbandry, fishery, bee keeping, fruit, vegetable, oil seeds (telhan), pulse seed (dalhan), dairy, and other
sectors of primary agriculture produce;
Micro and cottage entrepreneurship;
Personal service business (such as haircutting, tailoring, driving, etc.);
Industry producing arms and ammunitions, bullets and shell, gunpower, explosive materials, nuclear, biological and chemical (N.B.C.)
weapon, atomic energy, radio-active materials;
Real estate business (other than construction industries), retail business, internal courier service, local catering service, moneychanger,
remittance service;
Travel agency involved in tourism; guide, trekking and mountaineering guide, rural tourism including homestay;
Business of mass communication media (newspaper, radio, television and online news), motion picture of national language;
Management, accounting, engineering, legal consultancy service, and language training, music training, computer training; and
Consultancy services with foreign investment of more than 51 percent.
A foreign investor may make foreign investment by establishing an industry either singly, or jointly, or jointly with an
industry established in Nepal or with a Nepalese citizen.
A foreign investor may make foreign investment by acquiring assets or, up to the prescribed percentage of, shares of an
industry established in Nepal.
A foreign investor may make lease financing on aircraft, ship, machinery and equipment, construction apparatus, or similar
other apparatus, subject to the prescribed conditions.
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A foreign investor may make foreign investment in an industry established in Nepal through technology transfer and the
terms of the technology transfer to be made shall be as mentioned in the agreement for technology transfer concluded
between the concerned industry and the foreign investor.
An industry incorporated abroad may make foreign investment by establishing or expanding its branch industry in
Nepal.
An incorporated foreign investor may, for the purpose of making equity investment in any industry, establish a venture
capital fund, by incorporating a company under prevailing law and obtaining approval of the Securities Board. An
incorporated foreign investor which has established a venture capital shall be registered with the Securities Board for
carrying out securities transaction and it may, through secondary market, carry out the transaction of securities of an
industry in which the foreign investment may be made under the Act.
A public limited company incorporated in Nepal or a body corporate authorized to issue securities under prevailing law
may, with the approval of Nepal Rastra Bank and Securities Board, obtain loan or foreign currency by issuing loan
instrument, debenture or other securities in foreign capital market and a company incorporated in Nepal with foreign
investment may, subject to prevailing law on securities, obtain loan by issuing securities within Nepal with a condition that
Loan or foreign currency obtained by issuing securities as above shall be invested in Nepal.
An industry with foreign investment may, with the recommendation of Ministry and approval of Nepal Rastra Bank, obtain
loan from a foreign financial institution by entering into project loan or project financing agreement , in accordance
with prevailing Nepalese law.
A foreign investor making investment under this Act may, for the purpose of activities relating to investment made by him
in Nepal, enter into an escrow agreement with his partner investor or other foreign investor and a commercial bank or
infrastructure development bank approved by NRB and the bank entering into an escrow agreement shall act as an agent of
the parties to such agreement.
Maximum limit of amount and proportion of investment that may be invested by a foreign investor willing to invest in
Nepal shall not be prescribed. However, in the case of service industry limit of investment to be made in securities and
maximum limit of equity of foreign investment may be prescribed in a manner that it shall not be less than the commitment
made by Nepal, in relation to the concerned sector or sub-sector, at the time of obtaining membership of the World Trade
Organization.
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INFORMATION OF SALE OR TRANSFER OF SHARE SHALL BE PROVIDED
If structure of ownership or underlying ownership of assets, properties, shares or any other type of financial instruments created
in Nepal from foreign investment is changed due to sale or transfer of shares within or outside Nepal, or in any other manner, the
concerned company shall provide information to the body approving foreign investment, accompanied by evidence document
thereof, within 30 days of the transaction and get such information recorded as prescribed.
If ownership of an industry in Nepal with foreign investment is changed due to transfer of assets, properties or shares or an y
other financial instrument of a holding company, the liability of providing information shall be of concerned branch industry or
unit of industry established in Nepal.
Where a transaction as mentioned above has been carried out, no information shall be recorded until and unless the concerned
industry pays tax under prevailing law after disclosing the amount of transaction.
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To provide approval to foreign investor and foreign specialist, technician or managerial employee working in an industry
with foreign investment for withdrawal of investment and remuneration;
To frame and implement standard operating procedure for making foreign investment transparent and for procedural
simplification;
To provide recommendation for visa for foreign investor and his authorized agent, specialist, technician or managerial
employee working in an industry with foreign investment and infant member of their family, and to provide facilitation for
the same;
To carry out regular supervision and inspection as to whether or not an industry with foreign investment has misused any
facilities provided under this Act;
To provide facilitation for establishment of an industry with foreign investment in industrial zone or special economic zone;
To perform or cause to be performed other duties as prescribed.
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party to any regional or multisectoral economic, monetary or similar organization of which the
Government of Nepal is or going to be a party;
(g) Matters relating to terms prescribed by regulatory body under prevailing law on withdrawal of
investment, payment of loan (including principal, interest and fee) or payment of service fee outside Nepal;
(h) Matters of protection of public health, animals, plant or environment.
No industry with foreign investment under this Act shall be nationalized and also no industry shall be
expropriated (confiscated) directly or indirectly, except for public purpose. Appropriate procedure under
prevailing law shall be followed where expropriation is needed for public purpose.
VISA
Visa Type Purpose Period
Non-tourist Visa Carrying out the Feasibility Study 6 months
Non-tourist visa Expatriates 5 years on annual renewal basis
COMPLAINT MANAGEMENT
A foreign investor or an industry may, if he has any complaint in respect of any act done or action taken by an
official carrying out registration, regulation or supervision of industry under prevailing law, or by an official of
One-Point Service Center, for hearing, apply to the Department disclosing details thereof.
A foreign investor may, if he has any complaint in respect of any act done or action taken by the Department or
One-Point Service Center, for hearing, apply to the Ministry disclosing the details thereof.
SETTLEMENT OF DISPUTES
1st: Through mutual discussion or conversation of concerned parties (Facilitation by the department).
2nd: If the parties to the dispute have entered into a joint investment agreement or agreement relating to
settlement of dispute, the dispute shall be settled as provided for in such agreement.
3rd: If the parties to the dispute have not entered into a joint investment agreement or agreement relating to
settlement of dispute, the dispute shall be settled through Nepalese arbitration law complying with the prevailing
rules or procedures of United Nations Commission on International Trade Law (UNCITRAL),
POWER OF ATTORNEY
A person willing to make foreign investment in Nepal under this Act may give a notarized power of attorney to
any person for the purpose of doing and taking any, some or all acts and actions to be done and taken by him.
All acts and actions done and taken by the agent in accordance with the power of attorney shall be treated as
done and taken by the investor himself.
The agent shall not be entitled to delegate the authority bestowed on him to another person.