March 8: The government has amended the Industrial Enterprises Act 2076 to make it easier for non-resident Nepali (NRNs) to invest in Nepal. As per the new provision, the investment company itself can approve the investment in the name of the investor.

NRNs are willing to invest in Nepal and have been demanding legal and procedural reforms for that. In the budget statement of the current fiscal year, the government mentioned that 'foreign investment laws and procedures will be improved to attract foreign investment in manufacturing and export industries and bring in investment'.

Baburam Gautam, joint secretary of the Ministry of Industry, Commerce and Supplies, informed that the conditions for the establishment of companies have been revised to attract and promote the investment of NRNs. According to him, the monitoring of such a company and the monitoring of investors' investment were not clear previously.

Gautam said, “Now, arrangements have been made for the Department of Industry to monitor the investment.” After establishing the investment company under the previous arrangement, the investor had to come and complete other procedures from industry registration. After the amendment, foreign investment will be accepted even if the investor is not present in person.

The company itself will be able to approve the foreign investment in the name of the investor with the documents of the investors in the 'Investment Company' which will be established as a joint investment between the Government of Nepal and NRNs. In the case of other investment companies, there is a provision that the approval of such foreign investment should be obtained from the government body responsible for industry registration.

Foreign investment and technology transfer rules and regulations of Nepal Rastra Bank (NRB) must be followed when foreign investment is brought in and sent out. However, in the case of a joint company of Nepalese government and NRNs, the government has made a separate decision. Similarly, when NRNs invest in Nepal, the limit that they can invest in a project should not be less than Rs 10 million.

The minimum investment of the investment companies, except those established as the joint investment of the government and NRNs, should be Rs 1 billion.

The government arranged that such companies can only invest in the form of share capital in Nepal and cannot invest through loans, credit facilities, bonds and debentures. Joint investment companies with the government will be allowed to invest in bonds and debentures of infrastructure projects.