Foreign Direct Investment (FDI) in Nepal

Foreign Direct Investment (FDI)

Applicable Acts:

Foreign Investment and Technology Transfer Act (FITTA)

Industrial Enterprise Act (IEA) 

No Foreign person can investment in Nepal without prior approval of the Department of Industry in Nepal. Any one desirous of making Foreign Investment or Transfer of Technology should file an application to the Department. The minimum amount for FDI is NPR Five Million for the project.

A. Forms of Investment:

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

B. Required Documents -  (Foreign equity investment in a new industry (100%) subsidiary or JVC):

-Project Report

-JV Agreement

-Citizenship Certificate of Local Party or Certificate of Incorporation and MOA/AOA (in case local party is a company)

-Copy of Passport of Foreign party or Certificate of Incorporation and MOA/AOA (in case foreign investor is a company)

-Bio-data / Company profile of the foreign investor

-Financial Credibility Certificate (CFC) of the foreign investor provided by a home country bank or domiciled country bank

C. Required Documents - (For investment in an existing industry by share transfer)

-Project Report

-Share Transfer Agreement

-Copy of minutes of the Board Meeting, Certificate of Incorporation and company profile of the foreign investor in the participant is a company.

-Bio-data / Company profile of the foreign investor

-Financial Credibility Certificate (CFC) of the foreign investor provided by a home country bank or domiciled country bank

Required Documents from Nepalese Company:

a copy of minutes of  the Board Meeting of the Nepalese Company regarding inclusion of FDI in to the Company.

Request letter from the share transferor (not required in case of issue of new shares)

Request letter from the share transferee (not required in case of issue of new shares)

Recent Auditor's Report

Tax Clearance Certificate

Authority letter from the respective companies concerned to sign on behalf of  the companies.

D. Required Documents - (For establishing a place of business):

 The foreign company go for establishment of a permanent establishment (PE) or a Liaison Office in Nepal after approval of the concerned authority in Nepal.

A Nepali Citizen shall be appointed as a contact person for this purpose. 

The PEs cannot undertake any income-generating activities in Nepal.

Liaison Office can oversee a company's existing business interest, spread awareness of a company's products, and explore opportunities for further growth and development.

Initial Requirements:

Copies of MOA/AOA and Certificate of Establishment (along with Nepali Translation)

Details of Parent Company

Details of Directors, Managers, Company Secretary

Details of contact person in Nepal and Business place in Nepal.

Other Requirements:

The company has to file annual returns (Accounts/ Audit) with Company Registrar Office in Nepal

 

 

Note: There are various forms of foreign businesses alternatives (1. Opening a Liaison office, 2. Opening Branch, 3. Opening Branch (as subsidiary/ Industry), 4. Permanent Establishment). 

Note: Minimum Investment as FDI is NPR 20 million.