Foreign Investment & Technology Transfer Section

Nepal is a nation located between two big economies India and China. There is a seamless and boundless opportunities for production of goods and services, their marketing and expansion of industry for foreign investors. Endowed with diverse culture, geography and natural resources, Nepal is a lucrative destination for foreign investment especially in tourism, energy, manufacturing and service sector. Foreign Direct Investment (FDI) plays a vital role in raising capital formation and productive capacity as well as the transfer of technology, skill, innovative and managerial ability. Internalizing the importance of FDI in economic growth and transformation, Nepal has adopted the policy of regular improvement of major factors determining FDI inflow. In this context, Nepal has also introduced policy and procedural improvements along with the policy of national treatment to foreign investors. In addition, the government is committed to provide some tax and non-tax facility, post-investment services and hassle-free business environment. The government attempts to attract more foreign investment through g rowing market, natural resources, flexible labor market and bilateral investment and double-taxation avoidance agreements.

SN	Agencies	Major Functions
a.	Ministry of Industry, Commerce and Supplies	Formulate of policies and laws
b.	Industry and Investment Promotion Board	Provide consent to industries that require permission
c.	Investment Board of Nepal	Approve the foreign investment exceeding NRs. 6 billion and provide other facilitation
d.	Department of Industry (One Stop Service Center)	Approve the foreign investment not exceeding NRs. 6 billion and provide industry administration related services
e.	Office of Company Registrar	Register company and provide administration related services
f.	Nepal Rastra Bank	Provide approval for bringing in foreign currency against approved investment, recording and repatriation

Nepal government has set up One Stop Service Center as envisioned by Industrial Enterprise Act and Foreign Investment and Technology Transfer Act to provide all the services from a single point for the convenience of the investors. All the services required for foreign investors including registration of industries, renewal and winding up among others would be provided from a single place. Along with the service, facilities, exemptions and concessions, the OSSC also facilitates industries, entrepreneurs and investors in obtaining electricity, water, land and other infrastructures. The OSSC is located within the premises of the Department of Industry, Tripureswor, Kathmandu. The OSSC provides the services related to the approval of foreign investment not exceeding NRs. 6 billion; recommendation of Visa to the foreign investors, their authorized representatives and foreign experts, Initial Environmental Examination(IEE), Environment Impact Assessment (EIA) and foreign currency exchange facilities.

Industries, except the large Industries exporting at least seventy five percent of their own products, in the sectors of animal husbandry, fisheries, bee-keeping, fruits, vegetables, oilseeds, pulses, dairy business and other industries or business related to primary products of agriculture.,
Cottage and small industries,
Personal service business (hair cutting, tailoring, driving etc.),
Industries manufacturing arms, ammunition, bullets and shell, gunpowder or explosives, and nuclear, biological and chemical (N.B.C.) weapons; industries producing atomic energy and radio-active materials,
Real estate business (excluding construction industries), retail business, internal courier service, local catering service, moneychanger, remittance service,
Travel agency, guide involved in tourism, trekking and mountaineering guide, rural tourism including homestay,
Business of mass communication media (newspaper, radio, television and online news) and motion picture of national language,
Management, account, engineering, legal consultancy service and language training, music training, computer training,
Consultancy services having foreign investment of more than fifty-one percent.

Note: 100% (percent) foreign investment is not open for some sectors like casino, telecommunication and aviation. The rules of concerned regulating bodies are applicable.

Equity Investment in a new industry in foreign currency
Investment through purchase of shares of an existing industry
Reinvestment of dividend earned from foreign investment
Investment through capital investment fund
Investment through technology transfer in the form of patent, design, trademark etc
Lease investment

Documents Required for Approval of Foreign Investment in Industry

Project proposal - 2 copies
Joint Venture Agreement (in case of more than 1 investor)
Notarized copies of citizenship certificate of local partner or Certificate of Incorporation, including Memorandum of Association if the local party is a company – 1 copy
Notarized copy of passport of foreign partner or Certificate of Incorporation, including Memorandum of Association and Articles of Association if the party is a company– 1 copy
Bio-Data of foreign investor or company profile – 1 copy
Financial Credibility Certificate of the Foreign Investor issued by a home country bank
Letter of Authorization from the company or the investor (if necessary)

Documents Required for Approval of Foreign Investment in Existing Industry through Share Purchase

Application from the share transferor
Share transfer agreements – 3 copies
Copy of minutes of the meeting of Board of Directors of Nepali Company – 1 copy
Notarized copy of minutes of Board meeting, Certificate of Incorporation and company profile if the foreign party is a company – 1 copy
Notarized copy of passport and Bio-data of foreign party, if the party is an individual– 1 copy
Financial Credibility Certificate of the Foreign Investor issued by a bank– 1 copy, Current Share Holders’ List as recorded in the Office of Company Registrar- 1 copy and Audit Report – 1 copy
Tax Clearance Certificate – 1 copy
Letter of Authorization to sign on behalf of the company – 1 copy
Certificate of industry/company registration – 1 copy

Forms of Foreign Investment through Technology Transfer

Patent, design, trademark, goodwill, technological specificity, formula, process,
User’s license, technological know-how sharing or use of technological knowledge (franchise),
Provision of foreign technical adviser, management and marketing service or other technological skill or knowledge.

Documents Required for Approval of Foreign Investment through Technology Transfer Agreement

Technology Transfer Agreement – 3 copies
Notorized photo copies of Certificate of Incorporation, including Memorandum of Association and Articles of Association of the domestic company – 1 copy
Notarized copy of passport of foreign investor or Certificate of Incorporation, including Memorandum of Association and Articles of Association if the party is a company – 1 copy
Foreign investor’s Bio-Data or company profile
Minutes of the meeting of Board of Directors from concerned companies for Technology Transfer
Letter of Authorization from the company
Notarized copy of current Audit Report and Tax Clearance Certificate

Obtaining the investment approval from the Department of Industry or Investment Board of Nepal
Registering the company after the approval of foreign investment
Registering the industry in accordance with the foreign investment approval
Obtaining the permission of Nepal Rastra Bank to remit in foreign currency as per the approved investment
Remitting in the foreign currency through proper banking channel
Recording of foreign currency in Nepal Rastra Bank

Application and copy of Industry, Company Registration Certificate
Copy of Approval for Foreign Investment
Minutes of the meeting of the Board of Directors
Approved Share Purchase Agreement
AGM decision on paying dividend
Copy of the Approved Loan Agreement or an attested copy of the decision regarding compensation
Copy of approved Agreement of Technology Transfer and Lease Investment
Copy of current Audit Report, Tax Clearance Certificate and notarized copy of letter of being not blacklisted
Copy of the list of promoters and share-holders documented in Company Registrar’s Office
Letter of FDI Recording in Nepal Rastra Bank
Document showing the amount received from the sale of share
Royalty Calculation by Certified Chartered Accountant
Copy of the document showing the amount paid as the principal or interest on foreign investment

Foreign investors or his/her authorized representative and family members shall receive business visa after they obtain approval for foreign investment as long as their investment exists. They should apply for visa extension to Department of Industry 1 month prior to expiry of their Visa. And, they have to attend in person when they apply for the first time for Visa.

Documents Required for the Business Visa along with the Application

Notarized copy of passport with latest Visa
Letter of Foreign Investment Approval from the Department of Industry
Copy of Industry/Company Registration Certificate
In case of Industry in operation, report of industry inspection
Notarized copies of Letter of Authorization as a Representative of foreign investor and passport
Notarized document of the relation with the dependents
Contact address and telephone number of the investor/representative

Documents Required for the Non-Tourists Visa for Foreign Workers along with the Application

Notarized copy of Agreement between labourer and industry
Copy of the notice published in the national daily newspaper
Progress Report of the industry
Labourer’s Bio-Data (showing his/her experience in the industry) and Certificate of Academic Qualification
Notarized copy of passport with latest Visa
List of Nepali labourers to be trained by the foreign labourers
Working Approval and Work Permit
Copy of Industry Registration
Copies of current Audit Report and Tax Clearance Certificate of the company

*Note: Incase of Non-tourist Visa, the application should be submitted sixty days ahead of Visa expiry date

Residential Visa:

In case of foreign investment equivalent or above 1 million US dollar at a time, a foreign investor or his/her representative and family members shall be recommended for the Residential Visa.

Notarized copy of passport with latest Visa
Evidence of Realized Investment equivalent or above 1 million US dollar at a time
Copy of the Industry Registration Certificate
Physical and Financial Progress Report of the industry
Document of the relation with the dependent

For establishing an industry, the extension and diversification of existing industry, Brief Environment Study (BES), Initial Environmental Examination (IEE) and Environmental Impact Assessment (EIA) should be approved prior to the operation of the industry as per the existing environment laws

The Department may facilitate on discussion and negotiation to settle the dispute on investment among the domestic and foreign investors
If such facilitation fails, the dispute shall be settled in accordance with Joint Venture Agreement
Even if the dispute remains unsolved, it will be settled as per the Arbitration Law of Nepal

a.	Approval of Foreign Investment	Free (Deposit Rs.20,000/-)
b.	Company Registration	As per Company Act
c.	Industry Registration	Free
d.	Capital Currency against Foreign Investment	Free
e.	Visa	Fees as per immigration Act

Ministry of Industry Commerce & Supplies

Department of Industry