Does the Government of Nepal provide viability gap funding in case of investment proposed in priority sectors?

Yes. The provision of viability gap funding (VGF) has been introduced in the PPPIA 2019. A decision on such a fund shall be taken by a committee set up at the Ministry of Finance on the recommendation of the investment approving agency. Such funds are available for construction, operation and expansion of the projects that yield positive returns in the long run and are important infrastructure projects, which seem not to be able to run in profit immediately.

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What are the tax rates, incentives and duties in Nepal?

The corporate tax rate in Nepal is 25%. But it is 20% in the case of special industries identified by the Industrial Enterprise Act and the Value Added Tax is 13%. Special duty reductions of five or ten percent are provided on imports from the Tibet Autonomous Region of the People’s Republic of China, member countries of the SAARC, and designated most-favoured nations. Companies are subject to fiscal incentives, changes in the import tariffs and other duties, and taxes are generally announced through the annual budget and later to be…

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Are foreign workers allowed to work in Nepal?

Foreign workers can be recruited in the absence of a required skilled workforce in the local market for specific jobs. Foreigners can obtain various categories of visas such as non-tourist, business and residential visas during their stay in Nepal for official purposes.

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Which sectors are restricted for foreign investment in Nepal?

The Foreign Investment and Technology Transfer Act (FITTA) 2019 has listed the following industries in which foreign investment will not to be granted: Livestock farming, fish farming, apiculture (beekeeping), horticulture, oil-bearing crop, lentil, dairy business and other areas of primary agricultural products, Micro and cottage enterprise, Personal service business (such as hair cutting, tailoring, driving etc.), Industries producing arms and ammunition, gunpowder, explosives, nuclear, biological and chemical (NBC) weapons; industries producing atomic energy, radioactive materials, Real estate business (excluding construction industry), retail business, domestic courier service, local catering service, money…

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Can I establish an industry in a Special Economic Zone (SEZ)?

Yes. To be designated for Special Economic Zones, the industry needs to be an export-oriented – 60% of the manufactured products needs to be exported to other countries starting from the second year of its operation. For more details, please contact visit: Special Economic Zone Authority.

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