The Department of Industry (DOI) has expedited and simplified the process of Foreign Direct Investment (FDI) by establishing a ONE STOP SERVICE CENTER where all FDI-related services shall be offered.
Foreign investment of up to 10 million rupees will be permitted automatically in the current fiscal year’s budget; 2022/023.
The system automatically sends investment approval information to related bodies such as the investor, Nepal Rastra Bank, and the Company Registrar’s Office, eliminating the need for the investor to obtain separate foreign investment approval.
After this declaration is accepted, the process will continue. Any sector (in which to invest) is available to the investor. First, the investor must select the sectors from the macrolog.
Energy-based businesses, infrastructure-based industries, agriculture and forestry-based industries, tourism-based industries, service-based industries, information technology-based industries, and manufacturing-based industries are all covered under the Industrial Business Act.
While trading or export/import businesses cannot be carried out with FDI without the establishment of a manufacturing unit.
What is the FDI approval procedure?
DOI has a website: www.doi.gov.np. New When applying using this automated method, foreign investors must create a user ID.
After creating a user id, the investor can access its dashboard by entering the user id and password.
This method can be used to approve foreign investment from abroad, and there is no need to visit the industry department during the initial phase.
The automated approach is utilized for projects up to 100 million Rupees (total project cost) in Government of Nepal-approved areas and sub-areas.
The Nepal Rastra Bank and the Office of the Companies Registrar (OCR) both have their own online services.
The department stores the data directly in that system. The department sends information via email in the absence of such a mechanism.
This structure currently allows for foreign investment in specific sectors/industries.As of the previous fiscal year, the minimum foreign investment per foreigner/foreign firm was NRS 20 million.
The foreign investor receives an immediate investment approval certificate by submitting the form filled out in the template given by the department.
While abroad, foreign investors can complete this online form. This facility’s application process begins the day after the notice is published in the gazette.
According to the department, this automated system merely asks for 10% of the necessary information.
In this case, the investor receives a confirmation message asking if they want to go through the approved route or the automated route, while using the same user credentials as the present approval procedure and this automatic route.
When the investor clicks the 'Automatic Route' option, the page is forwarded and the dashboard appears in the investor tab.
First, the investor must accept the declaration. It is not on the blacklist, investors submit documents in compliance with AMLCFT (Money Laundering and Financial Investment in Terrorism), and the source of investment is legal.
This root holds items such as documents that have been attached (placed) and all details that have been entered correctly.
Nepal’s government has given its approval.
The Nepal Rastra Bank and the Office of the Companies Registrar (OCR) both have their own online services
For example, if an investor wishes to engage in the energy sector, he or she must select a specific sector, project site, and municipal body (at the local level) to invest in, in addition to submitting a Project Report.
The sub-investment part follows. In this section, investors can choose the sub-sectors of the initial sector they choose. If an investor chooses energy as a sector, he can then choose sub-sectors like wind, solar power, biomass, and so on.
Investors can choose one sector and any number of sub-sectors for each project.
The investor must now finish filling out his information. If the investor is a corporation, several additional documents are necessary while filling out the investor information (such as Certificate, MOA, AOA, and TAX data)
The investor must now finish filling out his information. If the investor is a corporation, several additional documents (such as details of the Certificate, MOA, AOA, TAX and Audit Report, Board Resolution, and License issued by the home country) are necessary while filling out the investor information. If the investor has a passport, all he needs is his passport and biodata.
It is necessary to differentiate whether the investor is a foreigner/foreign company or a Nepali, and whether the investment is made as equity or in any other form by a corporation or an individual.
Aside from that, if you claim to be an NRN, there is a section for Non-Resident Nepali (NRN) information. When the NRN investor chooses yes, a slot will open for the number to be input and the NRN to be entered
Aside from that, if you claim to be an NRN, there is a section for Non-Resident Nepali (NRN) information. When an NRN investor picks yes, a space will appear for the number to be entered and an NRN Identity card with a valid date issued by the Ministry of Foreign Affairs of Nepal will be required, whilst individual investors must have their passport, biodata, and photographs on hand. Other documents can be saved by uploading new ones that the investor wishes to maintain.
A corporation must submit several documents. Everything from a board member resolution to a power of attorney, the specifics of MoUs, AOAs, tax documents, and a letter of financial credibility is required.
The name of the company and its incorporation number must be provided. This number varies per country, and it is not needed to fill it out because there is no number in any country’s firm registration certificate. The country in which the corporation is registered, on the other hand, must be declared.
Information about a corporation’s board of directors should also be retained.
Fill 0ut with information about the director.
The following documents must be submitted:
- Letter of authorization
- Memorandum of Association, articles of association, firm registration certificate, and three ultimate beneficiaries.
- The system wants to know about the investments
Some fundamental elements of FDI:
- For FDI, each foreign investor/company must contribute at least Rs 20 million.
- Additionally, the investor can develop investment plans, product descriptions, and investment timeframes. Selecting these will complete everything but the names. The department has implemented a mechanism to reduce the number of errors.
- When a foreign investor completes this form, the system creates an investment approval certificate. Both forms can be completed by investors using a mobile phone or a computer.
- Investors can go directly to the company registrar’s office with the same certificate. DOI will exchange information on the FDI process with the Office of the Company Registrar and Nepal Rastra Bank via an internet portal.
- DOI will coordinate and facilitate as soon as possible because it has a “ONE STOP SERVICE CENTRE” in its premises with “DESKS” of Nepal Rastra Bank, Immigration Department, and TAX office.
- A detailed project proposal/report from the investor is also necessary.
In the case of the party’s joint venture business, the Share Purchase Agreement (SPA) and Joint Venture Agreement (JVA) must be submitted later in the industry.
The registration procedure. This SPA/JVA must be developed in collaboration with a corporate lawyer, as it is the foundation document for FDI that must be approved by the Department of Industries. Later on, any party may seek entry to the ARBITRATION TRIBUNAL for the peaceful resolution of a dispute. As a result, the Investor/s must exercise extreme caution when formulating the clauses of the SPA/JVA.
Industries Department
Later on, any party may seek entry to the ARBITRATION TRIBUNAL for the peaceful resolution of a dispute. As a result, the Investor/s must exercise extreme caution when formulating the clauses of the SPA/JVA.
The department also keeps a QR code to check the certificate’s integrity.
For further information, please visit www.doi.gov.np. This website also lists the sectors that are not open to FDI
Should you have any questions, please do not hesitate to contact us.
