January 20: The Ministry of Industry, Commerce and Supplies is preparing to unveil the 'National Startup Enterprise Policy' within the current fiscacl year. The policy has been under discussion for a long time. The ministry is currently discussing the draft of the policy with various stakeholders, including the Ministry of Finance, the National Planning Commission, the Federation of Nepalese Chamber of Commerce, Confederation of Nepalese Industries among others.

Baburam Gautam, joint secretary of the Ministry of Industry, Commerce and Supplies, said that the 'National Startup Enterprise Policy 2079' is under internal discussion. Gautam said that the draft is currently being discussed at various stages in the ministry, and it is ready to be released in this fiscal year.

As there is no other provision regarding the registration of startup enterprises and businesses, startups are placed under micro, domestic and small industries, according to the existing laws.

Entrepreneur Ranjit Acharya, who is representing NYEF of the Federation of Nepalese Industries and Commerce, said he has been present at the ministry for the past 13 months and is working like an employee to draft the policy. 

Acharya said that since the startup policy is now also in the interest of the government, they are trying to implement this policy latest by a month.

“Before making the startup policy, we studied the policies of various countries, including India, China, and America. While making the policy, our main priority with the government is to encourage new entrepreneurs to create a startup-friendly environment, to include in the policy topics such as giving income tax exemptions and providing subsidized loans,'' he said.

Acharya informed that a comprehensive discussion on startup policy will soon be held under the coordination of the Federation of Nepalese Chamber of Commerce and Industry. After the National Startup Enterprise Policy 2079 is approved by the Ministry of Law and implemented, the startups will operate according to the new policy.

The current law of Nepal defines a startup as a venture under seven years of registration, operating professionally for skill development using innovative approach and creative thinking in order to develop, produce, and distribute goods and services. A startup should improve the existing production method through the use of modern systems and technology to remove the existing problems.

Entrepreneurs say that this policy, which has been gathering dust on the table of government for a long time, will be implemented soon.

The draft proses certain criteria for a new company to be considered as a startup venture. They include:

1. The number of full-time workers in the enterprise is not more than 10

2. The total profit of the enterprise from the annual income should not exceed Rs 5 million

3. Fixed capital (excluding the value of the real estate) should not exceed Rs 20 million

4. Paid-up capital should not exceed Rs 3 million

5. The enterprise must not be operating for more than seven years

6. The enterprise should have two or more founders

7. Must have innovative approach for solving problems

8. Use of information technology to produce and distribute goods or services in an efficient, accessible and reliable manner or to expand the existing work in a new way

9. At least 5 per cent of the company's annual expenses are spent on product development, market development, and research and development

10. A patent or design or software of the intellectual property of the enterprise is registered or the patent or design or software is eligible for registration.

Enterprises that meets at least five conditions, including two from points 7 to 10, can start a business as a startup

Businesses not considered start-up ventures (proposed)

- Not registered in Nepal according to existing laws

- The act of importing goods or services from abroad without using information technology and without using the latest technology and research

- Blacklisted by Credit Information Center or operated by such person

- No permanent account number for tax purposes

- As a holding company, an enterprise classified as a medium or large industry according to the Industrial Business Act, 2076

- Other matters prohibited by prevailing laws