doing
business in Nepal
contents 1. Fact Sheet 2. Nepal Overview 3. Foreign Companies Doing Business In Nepal 4. Legal Framework 5. Investors First Steps 6. About beed
Map Source: http://en.m.wikipedia.org/wiki/File:Un-nepal.png
1. nepal factsheet
Economy
Geography
Currency
Nepali Rupee (NPR)
Area
147,181 sq km
GDP
NPR 1558.274 billion (FY 2011/12)
Location
South Asia; landlocked strategic location between India and China
Inflation Rate
9.6%
Principal Business
Terai or flat river plain of the Ganges in south, central hill region, Himalayas in north
Kathmandu, Pokhara, Biratnagar, Birgunj, Nepalgunj
Terrain Time Zone
GMT + 5hours 45 minutes
Capital
Kathmandu
Areas
Labor force
18 million
Agriculture
75%
Industry
7%
Services
18%
Remittance:
NPR 359.55 billion (FY 2011/12)
Vehicle Population:
1,178,911
People and Society Population
26,620,000
Official Language
Nepali
Calling Code
+977
Political Government
Federal Democratic Republic
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Doing Business in Nepal
2. nepal overview Nepal has successfully created an investment friendly environment to encourage foreign direct investment in the country and FDI has grown steadily over the years.
2.1 Evolution of FDI in Nepal The inflow of Foreign Direct Investment (FDI) began in Nepal in the early 1980s through the gradual opening of the economy. Following the peaceful revolution in the early 1990s, the Government introduced a new policy on FDI and instituted a “one-window” system, which designated the Department of Industries as the one window servicing agency for foreign investment. Since then, Nepal has successfully created an investment friendly environment to encourage foreign direct investment in the country and FDI has grown steadily over the years.
Earlier, the legislative system of Nepal consisted of a Westminster Style Parliament consisting of two chambers, the House of Representatives and a National Council. The House of Representatives, or the Lower House, consists of 205 elected Members, with elections every 5 years. The National Council, or the Upper House, consists of members elected by the House of Representatives as well as those nominated by the Prime Minister.
2.2 Political System
Constituent Assembly, consisting of elected members as well as nominated members, also acts as the Interim legislature. The Prime Minister is the Head of Government while the President is the Head of State. The President is elected by the members of the Interim Parliament. The Prime Minister is nominated by the largest party, or coalition of parties of the Interim Parliament. The President’s role is nominal in comparison to that of the Prime Minister. The executive body consists of the ministers of the Cabinet led by the Prime Minister.
The political system of Nepal is in a transitory phase as the new Constitution is being written. Currently, the
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Nepal overview
Policies are formulated in a way to limit government interference and allow the private sector to operate under minimum restrictions.
2.3 Legal System The Nepali legal system is based on the English common law and Hindu legal concepts. Corporate laws and governance systems are similar to the Indian system. The judiciary is composed of the Supreme Court, appellate courts and trial courts. The constitution instills the judiciary with the right of judicial review. The identity of the judiciary is distinct from the executive and legislative branches.
2.4 Economic System Nepal underwent various reforms in the 1990s such as the One Window System for Foreign Investment in an effort to make the country more investment friendly. Policies are formulated in a way to limit government interference
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and allow the private sector to operate under minimum restrictions. Nepal has done away with licensing requirements, simplified regulatory processes, broadened the scope of FDI and initiated other reformatory measures in order to create an efficient environment to operate in. The exchange rate of the Nepali Rupee NPR with the Indian Rupee INR has been determined under a fixed arrangement since 1960. The current conversion rate stands at NPR 1.6 to INR 1. With all other countries, there exists a flexible exchange rate.
2.5 Financial System The Central Bank of Nepal, Nepal Rastra Bank (NRB) regulates the banking industry; banks can be opened
once NRB provides permission to do so. Currently there are 214 banks and financial institutions in Nepal, out of which 32 are commercial banks. Companies are not permitted to open a savings account; but can open a call account to earn interest on savings. Various international banks have established themselves in Nepal through either joint venture undertakings or majority ownership. Examples of such banks are Standard Chartered Bank, Everest Bank, Nepal SBI Bank and Nabil Bank.
2.5.1 Official Calendar The Bikram Sambat (BS) Calendar (Lunar Calendar) is the official calendar of Nepal; the fiscal year ends on the third month of the BS calendar which generally falls on July 15.
Doing Business in Nepal
2.5.2 Language scripts Nepali is the official language of the central government. Consequently, all laws, rules and regulations are in Nepali although English translations are available for most acts. Also, the financials of public institutions are prepared in Nepali and also available in English.
2.6 Capital Market The capital market is regulated by the Securities Board of Nepal (SEBON) through the Securities Act, 2007. Nepal Stock Exchange Limited (NEPSE) is the sole stock exchange of Nepal. The Nepalese capital market can be broadly divided into primary and secondary
market. NEPSE is the only platform for secondary market transactions in Nepal. There are 338 securities listed at the NEPSE as on February 2013 including 229 companies.
the number of stock brokers has been increased.
The regulatory bodies, SEBON, NRB and NEPSE have been initiating various strategic activities to facilitate and strengthen the Nepali capital market. For instance, the Central Depositary System (CDS), dematerialization of physical share certificates, is currently underway. The Mutual Funds regulations has come into effect since September 2010 and portfolio management directives and credit rating regulation were issued. To increase the reach to customers and enhance competition,
To facilitate easy trade across borders, Nepal has entered into the following agreements with various countries and become member of the following organizations.
2.7 International Relationships
• Nepal is a member of the World Intellectual Property Organization (WIPO) and the Multilateral Investment Guarantee Agency (MIGA). • Nepal has entered into Bilateral Investment Treaties (BITs) with countries
Table 1: Key Market Indicators (in millions NPR) Details
2005/06
2006/07
2007/08
2008/09
2009/10
2010/11
2011/12
135
135.00
142.00
159.00
176.00
209.00
216
Turnover (NPR in millions)
3451.4
8,360.10
22,820.80
21,681.14
11,851.11
6,665.33
102.79
NEPSE Index (points)
386.83
683.95
963.36
749.10
477.73
362.52
389.72
Market Capitalization
96763.7
186,301.30
366,247.50
512,939.07
376,871.37
323,484.34
368,262
% of turnover on Market Capitalization
3.57
4.48
6.23
4.22
3.14
2.1
2.8
% of Market Capitalization on Nominal GDP at market price
16.03
27.78
44.62
53.43
31.86
23.6
23.6
No. of Listed Companies
(NPR in millions)
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Nepal overview
Nepal has entered into Bilateral Investment Treaties (BITs) with countries such as India, France, Germany, Mauritius, and United Kingdom.
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such as India, France, Germany, Mauritius, and United Kingdom. • To ensure access to the vast potential markets, Nepal is the member of World Trade Organization (WTO), South Asian Free Trade Area (SAFTA) and Bay of Bengal Initiative for MultiSectoral Technical and Economic Cooperation (BIMSTEC).
• Nepal is also a signatory to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States and a member of the International Centre for the Settlement of Investment Disputes (ICSID), which is associated with the World Bank.
Doing Business in Nepal
3. FOREIGN COMPANIES DOING BUSINESS IN NEPAL The procedure for establishing a business in Nepal begins with acquiring approval from the Department of Industries (DoI) to allow foreign investment.
3.1 Areas Restricted from Foreign Investment
Table 2: Industries Barred From Investment Part (A)
Part (B)
Cottage industry
Retail Business with international transactions in more than two countries as at the same time
Personal service business (business such as beauty parlor, tailoring, driving training etc.)
Bidi (indigenous tobacco product- exc luding those exporting more that 90%)
A foreign investor can invest in Nepal through the following ways.
Arms and ammunition industry
Internal courier service
• Investment in share (equity). • Reinvestment of the earnings derived from the above. • Investment made in the form of loan or loan facilities. • Mergers and acquisitions with existing Nepali corporations.
Explosives, gunpowder
Atomic energy
Industries related to radio-active materials.
Poultry farming
Real estate business (excluding construction industries)
Fisheries
Motion pictures business (Produced in any national language)
Bee-keeping
Security printing
Consultancy services other than those with up to 51% foreign investment including management, accounting, engineering and legal services
Currencies and coinage business
Domestic food processing methods in rent. Local catering Service Rural tourism
As per the Foreign Investment and Technology Transfer Act, all industries are open to foreign investment barring those identified in Table 2:
3.2 Investment Vehicles
The company thus established can be operated as one of the following. • Public or private limited company. • Liaison office. • Branch office of a foreign company. • Permanent establishments (PE) specifically for the purpose of execution of specific projects.
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Nepal overview
Various parameters such as investment level, financial performance, employment generation, income tax paid and area of investment will be analyzed prior to recommending the visa.
3.3 Types of Companies A company can be incorporated in Nepal in the following ways: • Wholly owned subsidiary with 100% foreign equity in the company. • Joint venture company with a Nepali partner and/or with the general public and operating as a public company which may be listed or not listed in the stock exchange. • Joint venture company with a Nepali partner and operating as a private company or a non listed public company.
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Many public companies are listed on the Nepal Stock Exchange and are subject to additional regulations.
3.4 Business Registration Procedure The procedure for establishing a business in Nepal begins with acquiring approval from the Department of Industries (DoI) to allow foreign investment. The business is thereafter required to be registered with the DoI within 35 days from the date of approval. During the registration process, the company needs to set
out the nature, classification of the industry, place where the industry is to be situated, machinery to be employed by the industry, raw materials, auxiliary raw materials, chemicals, packaging goods and the name of the industrialist. The registered company will be issued a registration certificate within 21 days from the date of application for registration. The company also needs to be registered at the Inland Revenue Office to get a Permanent Account Number (PAN).
Doing Business in Nepal
3.5 Visa Requirements Non Tourist Visa: Non tourist visas are issued to potential foreign investors who wish to make preliminary visits to Nepal. Foreigners who have obtained permission from the Government of Nepal to work on remuneration basis in any firm, company, association, industry or enterprise within Nepal are also required to get a non tourist visa. This type of visa is issued for a period not exceeding one year at a time and its term may be extended as per necessity. The charge for this category of visa is as follows:
• If issued at the port of entry, USD 30 for a month. • If issued elsewhere, USD 60 per month. Business Visa: Business visa is provided for a maximum period of five years to foreign investors once foreign investors obtain the license to invest from the Department of Industries. Various parameters such as investment level, financial performance, employment generation, income tax paid and area of investment will be analyzed prior to recommending the visa. The charges for this category are as follows.
• For a period of less than one year & multiple entry: USD 10 to USD 30 per month. • For a period of one year & multiple entry: USD 100 to USD 300. • For a period of up to five years & multiple entry: USD 250 to USD 1000. Residential Visa: Residential visa is provided to investors and their dependant family till the time investment equivalent to USD 100,000 is retained in Nepal. The charges for this category are as follows. • Fees equivalent to USD 200 for the first year, thereafter 100 USD per year.
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4. LEGAL FRAMEWORK Foreign nationals are not permitted to own land in their individual names. They can however purchase land in the name of the company after it is incorporated at Company Registrar’s Office.
4.1 Intellectual Property Patent: Individuals can register a patent in their name if either they are the inventor or if they have acquired rights over the original inventor. The DoI will permit registration if it does not adversely affect the public health, conduct, morality or the national interest. Patents registered under the Patent Trademark Act are published in the Official Gazette for the information of the public. In case anyone desires to copy the particulars, maps or drawings of the patent, it can do so by paying a certain fee to the department. The title of the patentee will only be valid for 7 years from the date of registration unless renewed. Misuse of registered patents will lead to a fine of up to NPR 250,000 (USD
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3,200 ) and confiscation of goods related to the offence.
(USD 1,280) and confiscation of goods related to the offence.
Design: The title of the person whose name a design has been registered in will only remain valid for 5 years unless renewed. Misuse of designs will lead to a fine of up to NPR 50,000 (USD 640) and confiscation of goods related to the offence.
4.2 Registering Property
Trademark: The title of the person whose name a trade-mark has been registered in will remain valid for 7 years, unless renewed. If the trademark is not used within one year from registration, the department may conduct necessary inquiries and cancel such a trademark. The punishment for illegal use of a registered trademark stands at a fine of up to NPR 100,000
Foreign nationals are not permitted to own land in their individual names. They can however purchase land in the name of the company after it is incorporated at Company Registrar’s Office. Services of local real estate dealers can be used for acquiring land. After identifying the land, it has to be registered at local office of the land revenue department. Foreign nationals are now allowed to purchase houses or apartments amounting to USD 200,000 or more. They however cannot sell such houses or apartments for five years from the date of purchase.
Doing Business in Nepal
4.3 Taxation 4.3.1 Income Tax The Inland Revenue Department of Nepal charges income tax on four broad categories of net income which are as follows: • Business income. • Employment income. • Investment income and • Windfall gain. 4.3.1.1 Taxes on Business Income/ Corporate Tax: All corporations carrying on trade, profession or business in Nepal and earning profits are liable to pay corporate tax. A tax payer is entitled to deduct from his gross income, all expenditure that is incurred in the production of profits. Accumulated losses can be carried forward for only four fiscal years. Filing of income tax returns is based on a self assessment system where corporations have to calculate advance tax at the start of a fiscal year and pay in three installments on the following dates:
Table 3: Yearly Tax Calendar Installment Due Date
Amount Payable
1st
January 15
40%
2nd
March 15
30%
3rd
July 15
30%
At the end of the fiscal year, the company is audited and tax for the
fiscal year is determined. If the tax already paid is less than the actual tax, the difference has to be paid by 31 October of the next fiscal year. However, if a corporation is unable to pay within this time period, the deadline, with approval from the tax office, can be extended by another three months. If the tax already paid is more than the actual tax, the difference is taken as advance for the next fiscal year. The tax rates for various businesses are as follows:
Table 4: Tax Brackets for Different Institutions Nature of Business
Applicable Tax Rate
Banks and Financial Institutions
30%
Insurance Companies, Tobacco and Alcohol Companies
30%
All Other Businesses
25%
Special businesses such as Build Own Operate Transfer (BOOT) companies, 100% export companies and companies with more than 500 employees pay only 20% tax. 4.3.1.2 Tax on Employment Income / Salary Tax: Salary tax is charged on the income earned by all individuals from any form of employment in Nepal. Income is defined as the sum total of all wages, salary, leave pay, bonus, allowances and all perquisites and facilities including rent paid by the employer.
If a company provides employees with residence in its own buildings, 5% of the basic salary is treated as allowance for rent and is added to the total salary to calculate taxes. If the company provides vehicles to employees then 0.2% of basic salary is taken as prerequisite for providing conveyance and is added to the total salary to calculate taxes. The slab system for the calculation of salary tax is as follows. If the annual income of an individual is greater than NPR 2,500,000 (USD 32,000), then he/she has to pay an additional amount of 40% on the tax paid on the amount exceeding NPR 2,500,000. 4.3.1.3 Other Taxes The following are the applicable tax rates on investment income earned by individuals and corporations. There is no taxation on interest income earned by a foreign investor from foreign loans. 4.3.2 Property Tax Individuals and corporations have to pay tax to the Land Revenue Department on any building or land that they own. This amount is collected by the local Metropolitan City, municipality or Village Development Committee and paid to the Land Revenue Department. The rate varies with each area.
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Legal Framework
The Labor Act and Labor Rules apply mostly to locals whereas few of the provisions along with the Immigration Rules 1994 are applicable to foreign nationals. It also largely gives preference to its citizens.
4.3.3 Value Added Tax VAT is charged at a flat rate of 13%. Certain companies are exempt from VAT; these companies are manufacturers of certain agricultural equipment, newspapers, magazines, medicine and medicinal services, education, books, gold, silver, electricity, banking services etc. 4.3.4 Tax Treaties Nepal has Double Taxation Avoidance Treaties with the following countries: Qatar, China, Austria, India, Korea, Mauritius, Norway, Pakistan, Sri Lanka and Thailand.
4.4 Labor Laws
formed and later merged together leading to unions today. Most of the trade unions are heavily divided on political ideologies else in general federation. Table 5: Tax 4.4.2 Foreign Workers Nepali Nationals are given priority over foreigners. However, in case no skilled Nepali national is available for employment, foreign nationals may
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Married Salary Per Annum Amount in NPR
Unmarried
Tax Rate
Salary Per Annum Amount in NPR
Tax Rate
Up to 200,000
1%
Up to 160,000
1%
Next 100,000
15%
Next 100,000
15%
Remaining Amount
25%
Remaining Amount Amount in NPR
25%
Tax Rate for Individuals (TDS)
Tax Rate for Corporations (TDS)
Interest Income
5% TDS
15% TDS
Dividend
5% TDS
5% TDS
Windfall Gain
15% TDS
15% TDS; corporations have to book as other income for additional tax calculation purposes
5%
10%
Capital Gain
4.4.1 Trade Unions In the past, several trade unions were
Rates for Individuals
Table 6: Applicable Tax Rates for Individuals and Organizations Income
The Labor Act and Labor Rules apply mostly to locals whereas few of the provisions along with the Immigration Rules 1994 are applicable to foreign nationals. It also largely gives preference to its citizens.
be employed on a contract basis. The term for which they are employed cannot exceed two years at a time
Contractual Fees
1.5% if VAT registered; or else 15%
Same rate as individuals
Doing Business in Nepal
Table 7: Employment Hours for Women and Minors Category
Maximum Employment Hours
Employment between 6:00pm and 6:00 am
Women
8 hours a day or 48 hours a week
Only through mutual agreements between such women workers and general manager
Minors
6 hours a day or 36 hours a week
only through mutual agreements between such minors and general manager
once they obtain approval of the Labor Department on the recommendation of the concerned Labor Office. 4.4.3 Summary of general regulations 4.4.3.1 Wages As per the Labor Act, a Minimum Remuneration Committee prescribes the remuneration rates to the Government which is then published in the Nepal Rajpatra (Official Gazette). The statutory minimum wage legislation is NPR 6,200 (USD 80) per month. 4.4.3.2 Hours: Employees can be engaged to work for a maximum time of eight hours a day or 48 hours a week. Every worker shall be given one day’s leave each week. However, there is stipulated number of working hours and conditions for women and minors as shown in Table 7 above. 4.4.3.3 Benefits – Vacations After completing a year of service in the establishment, the employees are entitled to annual leave as per the discretion of the employer.
4.4.3.4 Benefits – Provident Fund All establishments are required to deduct 10% from the monthly basic salary of a permanent worker and deposit it into the Provident Fund established under the 1962 Employees Provident Fund Act. The employer must also make a matching contribution to it. 4.4.3.5 Benefits – Gratuity Each establishment is required to set up a separate gratuity fund to deposit amounts of gratuity payable to workers. An employee is entitled to receive gratuity once he/she completes three years or more of service and retires thereafter. Gratuity shall be entitled to the worker in a lump sum at the following rates:
Table 8: Gratuity Based on Years of Service Years of Service
4.4.3.6 Benefits – Workmen’s Compensation Organizations are free to determine the amount and type of bonuses and other benefits to which a worker or employee is entitled to. Medical insurance is not compulsory, however most organizations do provide such a facility. 4.4.4 Social Security Nepal has no social security system. 4.4.5 Leaves
Table 9: Applicable Leaves Maximum No. of Days
Remarks
Public Holiday
13
Fully paid leave
Home Leave
1 day’s leave for 20 day’s work
Fully paid leave
Maternity Leave
52
Fully paid leave; can be claimed before or after delivery
Sickness Leave
15
Leave with half pay, after completion of one year of service
Mourning Leave
13
Leave with full pay, after completion of one year of service
Special Leave
30
Leave without pay, for a maximum period of 6 months during entire period of service
Category
Gratuity Amount
3 to 7 years
Half of the current monthly salary for every year of service rendered
7 to 15 years
Two third of the current monthly salary for every year of service rendered
Over 25 years
Total of the current monthly salary for every year of service rendered
4.4.6 Form of contract In Nepal, all employees are issued a letter of appointment or a contract of employment which states the post, remuneration, and service conditions of the concerned worker or employee.
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Legal framework
4.7 Insolvency The Insolvency Act, 2006 of Nepal governs corporate insolvency, whereas the Companies Act deals with solvent liquidation and deregistration. The Insolvency Act presides over all entities with limited liability. The act deems a company to be in a financially difficult situation when it is likely to be insolvent immediately or in near future. Such a company can either opt for reorganization or liquidation. A simple majority of creditors however have the power to accept or reject the reorganization program and to decide to liquidate the company.
4.5 Dealing with Breach of Contracts In the event that one party breaches the terms of a contract, the other party is not liable to complete the contract and can cancel it by furnishing a notice. The aggrieved party can realize from the defaulter, the actual loss or damage suffered by him/her a result of such breach of contract. In case the cash compensation paid to the aggrieved party is not adequate, the aggrieved party has the right to demand the completion of the contract instead of making compensation.
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4.6 Dispute Settlement If any dispute arises between a foreign investor and a national investor or the concerned industry, the concerned parties shall be required to settle the dispute by mutual consultations in the presence of the Department of Industries. If however the dispute cannot be settled in the above manner, it shall be settled by arbitration in accordance with the prevailing arbitration Rules of the United Nations commission on International Trade Law (UNCITRAL). The arbitration shall be held in Kathmandu. The laws of Nepal shall be applicable in the arbitration.
The petition for insolvency is filed in the District Court. Creditors, shareholders, debenture holders, liquidators and regulators of the business can initiate the insolvency proceedings. However, these stakeholders need to represent a certain percentage of total stakeholders in order to be able to file for insolvency which is as follows. Creditors are given the right to accept or reject the petition when filed by debtors. All creditors have to oppose the petition for it to be halted. If rejected, debtors will be provided with additional time to repay the debt. If they fail to agree on the time, the court may stipulate the time period not exceeding 10 years. Creditors however cannot reject the petition if it is filed by the debtors successor. No distinction is made on the basis of nationality of creditors.
Doing Business in Nepal
The Labor Act and Labor Rules apply mostly to locals whereas few of the provisions along with the Immigration Rules 1994 are applicable to foreign nationals. It also largely gives preference to its citizens. Table 10: Existing requirements to File for Insolvency Stakeholders
Minimum Percentage of Total Stake
Shareholders
5%
Debenture holders
5%
period of one year if they make false statements about creditors, loss of business and bankruptcy estate. The penalty is as follows.
Table 11: Applicable Penalty Charges Offense Dues Not Settled
Creditors
10%
If some of the creditors have opposed the petition it will not be stopped. All assets forming part of the estate will be realized and distributed among the creditors. The assets set aside for creditors opposing the petition will be handed over to the debtor. The bankrupt debtor is restricted from sale of any of the assets forming part of the bankruptcy estate. If any asset is mortgaged before the bankruptcy petition, it is treated as exempt property. Debtors are liable to fine penalty and/ or jail imprisonment for a maximum
Loss not Supported by Document
Penalty Jail imprisonment for maximum one year, NPR 25 deducted from unsettled amount for every day of jail term 15% of the value of hidden loss
Concealed Creditor/Loan
10% of undisclosed amount
Concealed Property/Asset
5% of undisclosed amount
Once the proceeds are distributed to the creditors the debtor would be discharged from all his debt liabilities. However if there are undisclosed assets, then the creditors have 10 years to recover their dues from such assets.
4.8 Repatriation If an industry is closed down after fulfilling the formalities as prescribed in
the existing laws, information thereof shall have to be provided to the concerned department within seven days from the date of closing down. A foreign investor shall be allowed to repatriate the following amounts. • The amount received by the sale of the share of foreign investment as a whole or any part thereof. • The amount received as profit or divided in lieu of the foreign investment. • The amount received as the payment of the principal of and interest on any foreign loan. • The amount received under an agreement for the transfer of technology in such currency as set forth in the concerned agreement. • 75% of the salaries and allowances to expatriates. Repatriation can be made in foreign currency, after approval from the NRB. TDS will be charged where ever applicable.
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5. Investor’s First Step for Investing in Nepal Application for Investment approval from the Department of Industry with the following documents:
1
• Submit a Share Purchase Agreement (SPA).
4
• If the foreign investor is an individual ownerprovision of home country bank details, passport photocopy, Bio data and photocopy of citizenship certificate of local party.
• If the Fixed capital is greater than NPR 2 billion (USD 23.36 million), it needs to be approved by the Industrial Promotion Board, or approved by the Director General.
• Registration fee. • All documents used for obtaining foreign investment permission letter at the Department of Industry must be submitted to Company Registration Office.
• Submit a business plan or project report.
• If the foreign investor is a company - provision of a Certificate of Incorportation, including Company Profile, Memorandum of Association, Ariticle of Association, Financial Credibility Certificate (FCC) of the foreign investor provided by the home country bank of domiciled country bank, Joint Venture Agreement with local partner, photocopy of certificate of incorporation of local party company, authority letters from companies concerned.
• Company registration from Company Registration Office (www.cro.gov.np).
5
• Registration of Industry at the Department of Industry. • Application Form. • All documents used for obtaining foreign investment permission letter must be submitted at the Department of Industry. • Registsration with Tax Office.
6
• Obtain Income Tax/Value Added Tax (VAT) registration or Permanent Account Number (PAN) as required.
• Approval from concerened country for investment. • Approval for Foreign amount transfer from Nepal Rastra Bank (NRB), The Central Bank. • Approval for Foreign amount transfer from Nepal Rastra Bank (NRB), The Central Bank of Nepal.
• Open a Bank Account.
7
• Foreign investors will need to open a foreign currency account at Nepal Rastra Bank.
2
• Approval for Foreign amount transfer from Nepal Rastra Bank (NRB), The Central Bank of Nepal.
8
• After receipt of Money from foreign investor, inform the Nepal Rastra Bank and the Department of Industry.
3
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• Approval from the related Deparments or Ministries. • Registration with the Local Development Office / Municipality .
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• Commencing of Business.
Doing Business in Nepal
6. About beed
beed is in the business of positive transformation of individuals and organizations. The beed eco-system is anchored by beed management, an international management consulting, and financial advisory services firm. Since 2008, the firm has served more than fifty firms inside and outside Nepal. beed’s domain can be divided into five broad areas. First, it works in the boutique advisory domain, which includes mergers and acquisitions. With a history of successful completion of deals, the high deal flow continues to attract firms and investors. Second, it works in the fund management domain. It has pioneered the concept of private equity fund in Nepal, structured funds, advised Nepal’s largest fund belonging to the Nepal Army Welfare Fund and won a global bid to manage International Finance Corporation (IFC)’s Small and Medium Enterprise (SME) Venture Fund. beed also pioneered the concept of portfolio management in Nepal through beed invest, Nepal’s
first operational portfolio management company, and continues to be seen as a key innovator in the field of raising, structuring and managing funds.
leadership programs through its proprietary thinkshop modules and also provides high-end personal and group coaching services.
Third, beed has created a niche position for itself in the advisory and management consulting domain by working across diverse firms in areas of valuation, diagnostic studies, feasibility studies, operations streamlining and sectoral studies. The clients see value addition in terms of bringing locally contextualized, international class skill set to a specific business environment.
The strength of this eco-system is its people, also referred to as beed, who are fiercely passionate individuals and believe in adopting ethical practices to achieve the next level. The three co-founders have over 50 years of experience between them and strive to take the “solution focus” approach while maintaining a high degree of integrity. beed has been sought after for internship and short term work opportunities by global Nepalis who are in pursuit of academic degrees in prestigious institutions around the world.
Fourth, it operates in the domain of development consulting through its devCon division, in conjunction with the beed promoted not-for-profit, Nepal Economic Forum. It works with a variety of bilaterals, multilaterals, and national and international NGOs in the areas of policy research, economic analysis, value chain analysis, enterprise development, sectoral studies and public private dialogue. Finally, through beed leadership center it works on conducting
After its successful operations in Nepal, the company is pursuing opportunities outside the country and has recently worked on a government sponsored pre-feasibility study of a project in Rwanda. The company strives to operate in South Asia and other pockets in Asia and Africa where niche opportunities exist.
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An international management consulting and financial advisory services firm.
Nepal’s first operational portfolio management company
NEPAL ECONOMIC FORUM A not-for-profit foundation initiated by beed and aimed at becoming Nepal’s premier economic policy, education and research organization.
we help entrepreneurs breathe
A USD 14 million International Finance Corporation (IFC) Small and Medium Enterprises (SME) Venture Fund.
Nepal’s first credit rating agency in joint venture (proposed) with CARE-India
Institutionalizes leadership development including coaching
March 2013 Publisher: beed management private limited www.beed.com.np Email: info@beed.com.np Photo Credits: Pranish Ratna Tuladhar Shayasta Tuladhar P.O Box 7025, Krishna Galli Lalitpur-3, Nepal Phone +977 1 554-8400 Design: Big Stone Medium contact@bigstonemedium.com “Doing Business in Nepal” is an in-house production of beed management private limited © beed management private limited, all rights reserved. The data provided in the publication cannot be replicated without express permission from the above entity.