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Institutional Arrangement to Deal with foreign investment Procedural Arrangements Foreign investors wishing to invest in Nepal as 100 percent foreign owned enterprises or as joint venture investments are required to make an application to the Department of Industry on a prescribed form along with a detailed feasibility report. The application form calls for information on project highlights, total capital investment, sources of finance, plant capacity, location of project, machinery, equipment and raw material requirements and thespecific contributions to be made by the foreign investor and the local investor.
The Department of Industry evaluates the project proposal and sumbit its recommendations to the industrial promotion Boarad for approval. The industrial Promotion Board consists of the following. Minister of Industry Chairman Assistant minister of industry- Member Member National Planning commission-Member Governor, Nepal Rastra Bank-Member Secretary, Ministry of Industry-Member Secretary, Ministry of Industry-Member Secretary, Ministry of Commerce - Member Representative, Federation of Nepalese Chambers of Commerce and Industry-Member Two reputable persons from industrial, commercial and tourism sectors- Members Director-General, Department of industry- Member Secretary. The Board may invite other related persons as invitees for meetings. This Board is the highest Government body responsible for the approval of projects.
The Department of Industry will notifies the application about the decision of the industrial prometion Board within 30 days from teh receipt of the application. In granting permission for investment, the Department of industry will specify the facilities and concessions the investor is entitled to. After the issue of the licence, the applicant is required to apply for registration of his company with the coampany Registrar's Office within 35 days from the date of receipt of permission. Thereafter the company will be registered within 21 days. Formation of Company
The registration of a project in the Department of Industry involves teh incorportation of a company under the Nepal Company Act. This would entail the filing of a Memorandum and the Articles of Association of the Company specifying the name and address of the Company, objects of the company, amount of authorised capital, appointment of directors, convening of annual general meeting of shareholders, Procedures of the company and so on. A company may be incorporated as a private limited company or a public limited company. A private company is limited to 50 shareholders and its incorporation needs a subscription of capital by at least 3 investors.
In the case of public company at least 7 investors should subscribe to its capital. After a public company is incorporated it must publish a prospectus, with the approval of theDepartment of Industry, before issue of shares to the public. One Wondow Services HMG of Nepal has reorganised administrative arrangements to deal with foreign investment projects with a view to providing all services required by ofreign investors under one roof. Accordingly the Department of industry will be responsible for granting licenses, facilities and other administrative services to all industries established with foreign investment adn/or technology transfer arrangements.
The status of the Department of Industry has been upgraded tofacilitate quice and efficient disposal of applications for investment. An one window committee comprising the following is formed to provide quice and efficient service on infrastructural and other matters of primary concern to industrialists: director-General, Department of Industry (Convenor) Joint Secretary, Ministry of Industry Joint Secretary, Ministry finance Joint Secretary, Ministry of Commerce Chief Controller, Nepal Rastra Bank, This committee will attend to the needs of investors on supply of water, electricity and telecommunication facilities, imports of machinery, raw materials and spare parts, issue of import licences, release of foreign currency and all other facilities required by investors. The committee wil have the authority to make binding decisions on these matters.