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Nepal Investment Summit 2017

FDI Approval

Investors wishing to invest in Nepal need approval from the concerned authorities before registering a company or opening a bank account. The approval process is a due diligence exercise of the incoming funds to ensure easy repatriation of the principle and dividends later on.

While the Department of Industry (DOI)/Industrial Promotion Board is responsible for approving small and medium-tier investments, large-scale investments are approved by IBN.

  • IBN Mandate

  • Starting a Business in Nepal

IBN Mandate

Any foreign individual or firm that wishes to conduct either one or a combination of the following forms of investments will have to obtain prior approval from either IBN or the Department of Industry

Forms of foreign investment

  • Establish a new firm, either with 100% foreign equity or as a joint venture (JV) with Nepalese/foreign investor(s)
  • Equity investment
  • Debt investment
  • Technology transfer

Investment approval entities differ according to project size. For projects over NPR 10 billion (USD 100 million), investors can apply through IBN. Please refer to the Application Process for details.

For projects below this threshold, interested parties should contact the Department of Industry (DOI).

Regardless of the amount, foreign investments in the following areas will be approved by IBN.

  • Fast track roads, tunnels, railway lines, ropeways, trolley buses, as prescribed by the Government of Nepal
  • Construction of international and regional airports and investment required for modernisation and management of existing airports
  • Solid waste management and treatment in urban areas
  • Chemical fertilizer production industries
  • Petroleum refinery plants
  • Major bridges as prescribed by the Government of Nepal
  • Banks and financial institutions that have 51% or more investment borne by foreign investors and investment required for establishing insurance and re-insurance companies
  • Medical colleges and state-of-the-art hospitals or nursing homes with 300 or more beds
  • Hydropower projects with capacity of 500 MW or more
  • Development of special economic zones (SEZs), export promotion or export refinement zones, special industrial zones or IT parks

 

 

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Starting a Business in Nepal

Investors applying for investment approval from IBN to start a business in Nepal are required to follow the process below. The company/tax /central bank/ industry registration process will continue after approval from IBN; however, we are committed to supporting investors by facilitating dealings with the appropriate government agencies in Nepal.

Step 1: Fill out the foreign investment approval form (in case of foreign investors). The approval of foreign investment can take up to a month, provided  all information required by IBN is provided in the format requested.

Step 2: IBN will issue a letter of approval for foreign investment.

Step 3: Register the company at the Company Registrar’s Office (CRO). Documents required to register a company are available from CRO's website or in the Related Content section below. Please note that the CRO requires the Memorandum of Understanding (MOU) and Articles of Association (AOA) to be in Nepali. The registration process takes about two weeks.

Step 4: The company has to be registered with the district office of the Inland Revenue Department or Inland Revenue Office (IRO) before it is operational. There is no fee or deposit required to obtain a PAN/VAT number. The documents required are available from IRO's website or in the Related Content section below.

Step 5: After obtaining approval for foreign investment, the company is required to register with the Department of Industry in the requested format. The documents required are available from the DOI's website or in the Related Content section below.

Step 6: The company is also required to register at the Nepal Rastra Bank (NRB), Nepal's central bank. Please visit NRB's website for further details or refer to the Related Content section below.

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