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THE FOREIGN INVESTMENT AND
TECHNOLOGY TRANSFER ACT 2019 (2075)
It was effective from 27 March 2019. The reading of FITTA need to be
done together with Public-Private Partnership and Investment Act,
Industrial Enterprise Act,2016 as well as Foreign Exchange Regulation Act,
1962.
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Transferring technology based on agreement between industry
and foreign investor including following matters in agreement :
• Patent, design, goodwill, formula, process, specialized
technology
• User License, know-how sharing or franchise sharing
• Foreign technical advisor, management and marketing
services or other technical
• knowledge and skills
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Following investment made by foreign investor in industry or
company:
• Share investment in FCY, Re-investment of dividend, Lease
Financing (Sec. 6)
• Investment in venture capital fund (Sec. 9),
• Investment in listed securities via secondary market (Sec. 10)
• Investment by acquiring share or assets of Nepalese Entity
• Investment received by issuing securities by Nepalese entity
in foreign capital markets
• Investment made through technology transfer
• Foreign investment maintained by establishing and
expanding industry in Nepal
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Foreign investor may individually or jointly, invest in Nepal in
following modes:
Foreign investment may be made by purchasing assets or shares
of industry: A foreign investor may make foreign investment by
purchasing the assets of or shares not exceeding the prescribed
percent of any industry established in Nepal.
Lease investment may be made: A foreign investor may make
foreign investment, subject to the prescribed ceiling, in any aircraft,
ship, machinery and equipment, construction equipment or similar
other equipment.
Investment may be made through technology transfer:
Foreign investment may be made by establishing a branch: Any
industry incorporated in a foreign country may make foreign
investment by establishing or expanding its branch industry in Nepal,
subject to the prevailing law.
Foreign investment may be made by establishing venture capital
fund: An institutional foreign investor may, for the purpose of
investing equity in any industry, establish a venture capital fund by
incorporating a company in accordance with the prevailing law, and
by obtaining approval of the Securities Board.
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Loan may be borrowed from foreign financial institution: Any
industry having foreign investment may on the recommendation of the
Ministry and with the approval of the Nepal Rastra Bank, in accordance
with the prevailing law, borrow a project loan from, or a loan by entering
into a project financing agreement with, any foreign financial institution.
Loan may be borrowed or foreign currency acquired by issuing
securities: Any public limited company incorporated in Nepal or a
corporate body authorized under the prevailing law to issue securities
may, with the approval of the Nepal Rastra Bank and the Securities
Board, borrow a loan or acquire foreign currency by issuing bonds,
debentures or other securities in the capital market of a foreign country.
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MINIMUM INVESTMENT =NRP 50 million
MORE THAN 6 BILLION
NRP
Investment Board of
Nepal
Foreign Investment
Approving Authority
UP to 6 BILLION NRP Department of
Industries
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Application to be accompanied with investment timeline and Approving authority shall notify within 7 days if
work plan. it is not appropriate to grant approval with
If it is deemed appropriate, approving authority shall grant grounds of refusal
approval within 7 days. Investor, who is not satisfied with decision
However, approval is not required for re-investment of can appeal in ministry and decision shall be
profit earned from already approved investment provide within 30 days of appeal.
Information to be Provided NRB & Approving Authority
• Written information should be provided to NRB with self-declaration regarding legal source of investment.
• Investment should be brought in convertible foreign currency (Indian investors can bring INR through
banking channel)
• In case of change in status or underlying ownership of any asset or share, due to transaction within or outside
of Nepal, concerned company should inform to approving authority within 30 days of such transaction.
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By paying all applicable taxes, any foreign investor desiring to
dispose their holding fully or partially, can repatriate following
amounts in same currency they brought-in or in other convertible
FCY:
Disposal proceeds of share of foreign investment.
Profit or dividend earned as a result of foreign investment.
Residual amount remaining after meeting all liabilities on liquidation
Royalty as per Technology Transfer Contract. However, industries
producing liquor product (except exporting 100% product) shall not
permitted to repatriate more than 5%of total sales.
Lease rent under Lease Investment
Compensation or fine received on final settlement of legal dispute or
arbitration
Amount of Loan and interest realized from auction of collateral in
case of loan default
After verification of abiding all the terms and legal grounds,
approving authority shall grant approval of repatriation within 15
days of application.(Then apply NRB for foreign currency
exchange) 9
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Visa Facility Type Eligibility Visa Duration
Non-Tourist Visa A foreigner visiting Nepal for 6 Months
conducting study, research or
survey for investment in Nepal.
For foreign specialist, technician As required
or managerial person.
Business Visa Foreign investor or his/her Till foreign investment is
authorized agent and his/her retained
family member (spouse, father,
mother & minor children). Max
two persons can avail this
facility for prescribed limit of
investment.
Residential Visa Investor or his/her authorized Till foreign investment is
agent with foreign investment of retained.
1,000,000 USD or more at a
1
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Primary agriculture sector such as fish farming, animal husbandry, horticulture,
milk business
Micro and Cottage enterprises
Personal service businesses (like: hair saloon, tailoring, driving etc.)
Arm and ammunition industry, industry producing biological and chemical
weapons, industries related to explosives, gunpowder, radio-active materials,
atomic energy etc.
Real Estate business (excluding construction industries), Retail business, internal
courier services, local catering services, money changer, remittance etc.
Tourism based travel agency, trekking agency, expedition service provider,
home-stay and rural tourism
Mass-media business (such as newspaper, radio, TV and online news), movies of
national language
Business and Organizations providing management, accountancy, engineering
and legal consultancy services and language training, music training, computer
training & Consultancy services with more than 51% foreign investment.
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Foreign investment approval shall be valid till the investment is retained however,
under following conditions investment approval is deemed to be cancelled:
The approved investment amount is not initiated to bring in Nepal within 2 years of
approval without reasonable ground.
The whole ownership of industry under foreign investment is transferred to
Nepalese as a result of share transaction.
If approved industry for foreign investment or company establishing such industry’s
registration is cancelled.
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Thank You
