Government of nepal investment board

In contrast, a MW hydropower project started four years ago by the same Korean consortium in Pakistan is nearing completion. The Bank cites administrative hassles, a complicated tax system and structural problems as major impediments to investment. When will that be?

Much more than documents.

Published in March All rights reserved. No portion of this book may be reproduced, duplicated or copied by any means without the prior written consent of the publisher. No legal responsibility can be accepted by the author or publisher for the content that appears in this publication. We acknowledge the inputs of representatives of the various Government of Nepal agencies, private sector organisations, sectorial experts and individuals who contributed to the information in this document. Finally, we would like to thank Pentagram Pvt Ltd for the design ogvernment layout. Religion Secular state; Hinduism Capital Kathmandu, located in investmet Nepal Population

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Federal Parliament :. Prior to the abolition of the monarchy , it was officially known as His Majesty’s Government [1]. The Head of state is the President and the Prime Minister holds the position of the Head of executive. The role of President is largely ceremonial as the functioning of the government is managed entirely by the Prime Minister who is appointed by the Parliament. The heads of constitutional bodies are appointed by the President on the recommendation of Constitutional Council, with the exception of the Attorney General, who is appointed by the President on the recommendation of Prime Minister. The character of government in Kingdom of Nepal was driven from consultative state organ of the previous Gorkha hill principality , known as Bharadar.

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Published in March All rights reserved. No portion of this book may be reproduced, duplicated or copied by any means without the prior written consent of the publisher. No invextment responsibility can be accepted by the author or publisher for the content that appears in this publication.

We acknowledge the inputs of representatives of the various Government of Nepal agencies, private sector organisations, sectorial experts and individuals who contributed to the information in this document. Finally, we would like to thank Pentagram Pvt Ltd for the design and layout. Religion Secular state; Hinduism Capital Kathmandu, located in central Nepal Population Governing System Republic: Multi-party parliamentary democracy with elected prime minister responsible to the parliament as executive head and constitution endorsed in USD 76 as at February It explains what forms of FDI are allowed, the process of applying for approval of foreign investment, the agencies responsible and the fees involved.

It also takes a quick look at how to register a company and how to register for tax. For national priority projects, foreign investment is especially encouraged in the recently enacted Foreign Investment Policy, Applying for foreign investment approval Foreign investors need to apply for approval before they incorporate a company and conduct business activities in Nepal.

FITTA is the law regulating the entry and operation of foreign investment in the country. If the investment government of nepal investment board is NPR billion approx. USD millionthe Industrial Promotion Board, chaired by the Minister of Industry, has the authority to grant foreign investment approval. USD millionthe government has created a special vehicle boxrd the Investment Board Nepal to facilitate large projects of national importance.

The Investment Board is headed by the Prime Minister of Nepal and has the overriding power to approve projects and direct various line agencies of the government to implement its decisions. Other registration and licensing visa, trademark, business licensing, land acquisition.

The Department of Industry, under the Ministry of Industry, is the government agency responsible for the administration and implementation FITTA and promotion of industry in Nepal, particularly small and medium scale industries. It provides foreign investment approval to projects below NPR 2 billion approx. USD 20 to million. The Department of Industry also encourages FDI and helps investors to establish operations in the country. It is responsible for registering trademarks, patents and designs to protect industrial property rights.

The Investment Board Nepal is a high-level fast track Government of Nepal agency established in to create an investment-friendly environment by providing a one-window service for foreign investors.

However, a maximum of NPR 20, should be deposited at the Nepal Rastra Bank at the time of issuing an approval letter. This amount is refunded when the project becomes invesment. To act as a public-private partnership body: Upon global solicitation of proposals, IBN negotiates, signs and implements deals on behalf of the Government of Nepal.

IBNs objective is to deliver value for money with on time, on inveshment completion of projects by achieving the optimal combination of benefits and costs. IBN has the govrrnment broad mandate: To act as an investment promotion and development body: IBN is responsible for promoting investment in Nepal by formulating appropriate invesstment, awarding appropriate perks and benefits to investors, coordinating with relevant line ministries to solve investor problems and signing deals to effectively channel private investment by means of a onewindow service.

Medical colleges, hospitals or nursing homes with beds or more Hydropower projects of MW or more Development of Special Economic Zones SEZsexport promotion or export processing zones, special industrial areas or IT parks Any infrastructure or service industry i. In the case of projects that are not put up for competitive bidding, direct negotiation with IBN is possible. As per the Investment Board Act, the direct negotiation method is allowed for projects under IBNs mandate if: the proposal is absolutely necessary, and no suitable proposals are tabled after at least two invitations for proposals competition is not possible a new concept or technology is involved the cost estimate exceeds NPR 20 billion adoption of other procedures as per the Act is not found to be appropriate for any reason In such cases, the potential investor can directly approach IBN.

However, investors following the direct negotiation route need to furnish all details and carry out studies in the same manner as for obtaining approval under the open bidding scheme.

Fees: The fees for investors through IBN are set out in the following table. The Company Act provides for two types of companies: private limited and public limited.

Private limited company Limits the oc of shareholders from Cannot make an invitation to the general public for share subscription.

Public limited company Has minimum of 7 shareholders and no maximum limit Has minimum paid-up capital of NPR 10 million May also offer shares to the public at the Nepal Stock Exchange NEPSE under the Company Act and Securities Act A company carrying on the business of banking, financial transactions, insurance related transactions, a stock exchange, pension or mutual fund, or any other related business or transactions must be incorporated as a public limited company.

Fees: The fees for registering a company are set out in the tables. Registration fees for private limited company NPR Capital investment, , 2,, Registration fees for public limited company NPR Capital investment , 10,, ,, ,, ,, ,, Registration fee min 18, 40, 70,Registration is valid for 5 years enterprises have to reregister every 5 years.

The Nepal Rastra Bank, the central bank of the country, along with the CRO regulates the incorporation of a bank or financial institution. Banks and financial institutions are classified into 4 classes commercial banks, development banks, finance companies, and micro finance institutions, based on the amount of paid-up capital. In the case of a foreign bank incorporating a subsidiary in Nepal, such provisions may be relaxed.

For operation of a food industry-based business, the operator has to obtain a licence from the Department of Food Technology and Quality Control. The Department of Mines and Geology issues two types of licences: a prospecting licence for survey or exploration purposes and a mining licence for the extraction of mines and minerals. The governmet of a prospecting licence is 2 years for ordinary non-metallic minerals, and 4 years investmdnt metallic and valuable minerals.

The validity of a mining licence varies according to the size of the project, ranging from 5 years for small operations to 30 years for large projects. To boarv a pf, management or engineering education institution, one has to apply to the Ministry of Education. The major inveetment governing the incorporation of medical education institutions is the Ministry of Healths Directive on Establishment, Operation, Standards and Infrastructure of Private and NonGovernmental Health Institution, Along with this, a medical institution must have an affiliation to a university and approval from the Ministry of Education.

As per the Electricity Act,if the capacity of the project is more than 1, kW, operators must obtain a survey licence and, after the survey, a licence to generate, transmit or distribute electricity from the Department of Electricity Development.

There is a simplified procedure for the development of micro hydro projects up to 1, kW capacity. The project proponent has to obtain a survey licence before starting survey work including a detailed design and feasibility study.

After completion of the survey, a separate licence has to be obtained from the Department of Electricity Development to start construction and operate the project. The maximum term of a survey licence is 5 years. The major statute governing the licensing and registration of health service institutions is the Ministry of Healths Health Institution Establishment, Operation and Up-gradation Standard Related Directive,Sections After being registered with the Department of Industry, the company has to obtain an industry-specific licence for operating health services.

This section gives an overview of the main types of visa available for foreign nations: tourist, non-tourist, business, resident and non-resident Nepali visas. Tourist visa Government of nepal investment board this category, visitors can come to Nepal and stay for 60 days with renewals allowed for up to days in total in a calendar year. A tourist visa can be obtained from Nepali missions in the tourists country of origin or upon arrival at the port of entry by paying the prescribed fee.

This type of visa is issued for a period not exceeding one year at a time and its term may inveetment extended as needed. A non-tourist visa requires approval from the Ministry of Home Affairs if the duration of the visa applied for exceeds three months. Foreigners who have obtained a recommendation inestment the Department of Industry to conduct a feasibility study for any industry or enterprise for a period not exceeding six months can also obtain a non-tourist visa.

Non-tourist visa for expatriate staff If the required skilled workforce is not available locally, an industry can employ foreign nationals by obtaining a work permit. The validity period of this visa is one year at a time. Non-resident nepali visa If any foreigner of Nepali origin, residing boadr a foreign country, intends to reside in or carry on trade or business in, or conduct study, teaching or research work in any subject in Nepal, a non-resident Nepali visa may be granted to such a foreigner and his or her family members for a period not exceeding ten years at a time.

This section gives a brief overview of the labour laws contained in the Labour Act Working day The normal allowable working hours per day are 8 hours, 6 days a week, or investmenh hours a week. The employer can decide the starting and finishing time as well as the day of the weekly holiday which is traditionally Saturday. Working age A person must boarv over the age of 16 to be hired for employment.

A child under the age of 14 cannot be employed under any circumstance. A child between the age of 14 and 16 can be employed for up to 6 hours a day. Contracts Nepali labour laws allow three nrpal of employment contracts: regular employment contract permanentfixed duration employment contract often termed as contract employmentand task-based employment contract piece rate contract. For visa requirements of foreign workers, refer to the section in this guide on visas.

Wages and benefits The government revises the minimum wage periodically, usually every 23 years. No employee can be paid less than the minimum wage. Wages and benefits are generally based on the collective bargaining inveshment reached between the union representing the workers and the management. The minimum wage includes a basic wage and dearness allowance, both decided by the government.

Wages may be paid on a weekly, fortnightly or monthly basis, but the period between the payments should not exceed one month. Female and male workers are entitled to equal remuneration.

Employers may pay allowances in addition to wages. Some examples of allowances paid in Nepal are transport allowance, medical allowance and house-rent allowance. However, the payment inveetment such allowances is not mandatory. Public holidays and leave All workers are entitled to one-day holiday a week usually Saturday and 13 public holidays a year. Apart from 13 public holidays, an employee is entitled to 18 days of fully paid home leave a year, or 1 day of home leave for every 20 days of work.

The home leave may be accumulated up to 60 days and carried forward to subsequent years. Workers are entitled to 15 days sick leave on half pay in a year.

Female workers are entitled to 52 calendar days weekly and public holidays counted in this period of leave with full pay in the case of delivery of a child. Such leave boatd be provided only 2 times in the entire service period.

Special leave of up to a maximum of 30 days in a year can be taken without pay if no home leave or sick leave is in reserve.

Misconduct and disciplinary action In case of misconduct by a worker, the employer has the right to take disciplinary measures. There are four kinds of punishment prescribed in the Labour Act Sections boqrd, 51, 52 that can be used by an employer, depending upon the severity of the misconduct.

These are: warning, withholding of annual salary increment gradesuspension from work up to 90 calendar daysand dismissal. Retrenchment As per the prevailing Labour Act, if an enterprise needs to curtail its operations or close down partially or wholly, the management, after obtaining approval from the government through the Department of Labour, may retrench some or all of its workers Labour Act, Section In such situations, workers hired last need to be retrenched.

The retrenchment can be done by giving a months notice or a months pay in lieu of notice.

Four FDI companies approved by Nepal Investment Board

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The tourism industry has been adversely affected by domestic companies who want to keep the foreigners. Investors can now have more clarity about the process. Overseas Nepalis are not impressed. Nepal has no policy yet on sovereign guarantee. No foreign investment is allowed in cottage industries.