New Foreign Investment Policy.

The Government of Nepal (GoN) is preparing to provide housing facility for investors investing more than US 1 million for the tenor of project operation. Such facility will be borne by Government of Nepal. To encourage foreign investment in the country, Department of Industry (DOI) has decided to add such provision in the foreign investment policy.

“We want to attract foreign investors by providing more and more facilities to them. We are trying to amend the policy in order to attract more and more investors in the country. This provision including repatriation will be mentioned in the policy.” said Industry minister Mahesh Basnet.

The minister further assured that the policy will incorporate the foreign exchange facility for the payment of interest and principal, trademark renewable fee and royalty fee.

Likewise, foreign companies will be allowed to raise debenture and bond from their home countries in order to collect the required capital. For such facility, an approval from Central Bank of Nepal is required. Foreign currency exchange facility will be provided for the payment of interest and principal of such bond and debenture in their home country.

Those foreign investors who bring plant and machinery as their equity will pay custom duty of less than 4 percent.

For hydropower investors, the custom duty will be exempted for plant and machinery which has to be imported. Hydropower investors will get reimbursement of waived tax in cash fully. There will not be any discrimination between the domestic and foreign investors in regards to tax holiday, cash incentives and so on.

Local debt for Foreign Investors.

Now foreign investors will be allowed to raise local debt from local Bank and Financial Institutions. The process for loan approval will be under the directives of Banks and Financial Institutions Act (BAFIA) prepared by Central Bank of Nepal.

Similarly, foreign investors are allowed to issue local currency bond within Nepal if they are going to use the collected fund inside the country.

Identity Card for Foreign Investors.

An identity card will be given to foreign investors which will allow foreign investors to move freely within the country except restricted area.