Introduced automatic route for foreign investment approvals up to $ 38 million

On 2 October 2023, the Government of Nepal streamlined the process for approving foreign investments of up to NPR 500 million (~$37.6 million) through the automatic route. Section 42 of the Foreign Investment and Technology Transfer Act, 2019, enables the Government to introduce a simplified system for attracting foreign investment. This policy enables investors from any country to receive initial investment approval online upon submitting their applications. Foreign investors can now apply from abroad to invest up to NPR 500 million and they will automatically receive pre-approval through the online system, provided they invest in one of the following areas: energy production/agriculture and forest production/infrastructure/tourism/information technology-based industries/service/manufacturing. It also clarifies that there is no minimum investment limit for information technology-based industries when investments are made through the automatic route.

• Type:

  • Entry and establishment (Approval and admission)

• Industry:

  • Primary (Agriculture, forestry and fishing)
  • Manufacturing (Manufacture of food products, beverages and tobacco products, Manufacture of chemicals and chemical products, Manufacture of computer, electronic and optical products, and electrical equipment)
  • Services (Electricity, gas, steam and air conditioning supply, Water supply, sewerage, waste management and remediation activities, Construction, Other service activities)

• Sources:

  • lawcommission.gov.np, The Foreign Investment and Technology Transfer Act, 2019 (2075), https://www.lawcommission.gov.np/en/wp-content/uploads/2019/09/The-Foreign-Investment-and-Technology-Transfer-Act-2019-2075.pdf, 27 Mar 2019
  • myrepublica, Govt simplifies process for attracting FDI, https://myrepublica.nagariknetwork.com/news/govt-simplifies-process-for-attracting-fdi/?categoryId=81, 05 Oct 2023
  • onlinekhabar, Govt introduces automated system for foreign investment approvals up to Rs 500 million, https://english.onlinekhabar.com/automatic-foreign-investment-nepal.html, 04 Oct 2023