foreign Direct Investment ( FDI) Process in Nepal

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Comprehensive Guide to foreign Direct Investment ( FDI) APPROVAL IN Nepal

Nepal has become an attractive destination for foreign investors looking to explore new markets and opportunities. However, securing foreign direct investment (FDI) approval in Nepal requires a well-structured approach. At Sarathi Consults and Business Development, we provide expert guidance through every step of the journey. Here’s a detailed guide on the steps, documentation, and costs involved in the FDI approval process in Nepal.

Steps/Procedure Required for FDI Approval

  1. Obtaining Approval from DOI or IBN
  • Begin by acquiring FDI approval from the Department of Industry (DOI) or the Investment Board Nepal (IBN).
  1. Registration at OCR
  • Register your company at the Office of the Company Registrar (OCR).
  1. Applying for PAN
  • Obtain a Permanent Account Number (PAN) for tax registration purposes at the Inland Revenue Office (IRD).
  1. Business Registration at Local Ward Office
  • Complete business registration at your respective local ward office.
  1. Obtaining Recommendation Letter
  • Secure a recommendation letter from the local ward office for industry registration.
  1. Registration of Industry
  • Register your industry at the Department of Industry.
  1. Obtaining a Non-Black Certificate
  • Get a non-black certificate from the Credit Information Bureau to confirm your financial credibility.
  1. Opening a Local Bank Account
  • Open a local bank account under the company’s name in an “A” listed bank.
  1. Recording the Investment Amount
  • Record the investment amount with the Nepal Rastra Bank (NRB), the central bank of Nepal.

Documentation Required for FDI

Home Company-Related Documents:

  • Company Incorporation Certificate, MOA, AOA: Provide the memorandum and articles of association.
  • Company Profile: Include detailed information about the investing company.
  • Latest Audit Report: Submit a notarized audit report of the investing company.
  • Investor Resolution: Present a resolution from the investor regarding the investment in Nepal.
  • Signed Company Profile: Ensure the profile is stamped and signed by the Board of Directors and stamped by the investor company.
  • Power of Attorney: Authorize individuals to complete the FDI approval process.
  • Joint Venture Agreement: Required in case of two or more investors.
  • Project Report: Include details for setting up a local subsidiary company.
  • Investment Schedule: Outline the planned investment in the industry.

Home Country Bank Documents:

  • Financial Credibility Certificate (FCC): Provided by a local bank in the investor’s home country.

Individual Documents:

  • Passport Copies: Include notarized copies of passports for all directors and shareholders.
  • Authorized Representative Documents: Provide notarized copies of the authorized representative’s passport or citizenship.

Local Bank Account Requirements:

  • Bank Account in an “A” Listed Bank: Ensure the bank is listed under “A” category.
  • Minimum Deposit of NPR 20,000,000: This deposit serves as the company’s equity.
  • Deposit Certificate: Submit the certificate to Nepal Rastra Bank.

Financial Details

Government Fees Applicable for FDI Approval:

  • Guarantee Amount: NPR 20,000 (approximately USD 146.81) to be deposited at DOI.
  • Company Registration Fee: Varies based on the authorized capital of the company. For example, for capital between NPR 1-2 crore, the OCR charge is NPR 19,000 (approximately USD 139.47).
  • Business Registration Fee: Ranges from NPR 5,500 to 15,000 per year (approximately USD 36.70 to USD 110.10).

Additional Notes:

  • House Rent Tax: 10% of the monthly rent for business premises.
  • Local Variation: Fees and taxes may vary depending on the local area.

Why Choose Sarathi Consults?

Navigating the complexities of FDI approval can be challenging, but with Sarathi Consults, you’ll have a trusted partner to simplify the process. Our team ensures compliance with legal requirements, assists with documentation, and provides end-to-end support to make your investment journey in Nepal seamless and successful.

Get in touch with us today and take the first step towards realizing your business aspirations in Nepal!