Kathmandu, Oct. 16: The
government is devising a legal framework to grant Most Favoured Nation (MFN)
status to those countries that come to invest here.
The government has proposed new
legal provisions to treat such countries as Most Favoured Nation and provide equal
national treatment to foreign investment in Nepal .
This has come as an effort to
attract more Foreign Direct Investment (FDI) with an aim of generating
employment and enhancing the contribution of the industrial sector to the Gross
Domestic Product of the country.
The New
Draft of the Foreign Investment (Amendment and Integration) Bill has proposed
such special treatment to foreign investment and source countries.
The draft is being prepared to
amend the Foreign Investment and Technology Transfer Act, 1992.
According to the draft, MFN
treatment would be extended to the source countries for their FDI, technology
transfer or profitable intellectual property, foreign buyers of Nepalese
industries, investment management or reinvestment, and establishment of branches
of foreign companies.
However, such companies must
repatriate their profits or income from other sources through legal channels.
It has proposed that foreign
investors can send back the money in the same currency through which they have
made investment in the country.
“Foreign investors can take back
the money earned from the partial or full transaction of shares, profits or
dividend, profits as per the technology transfer agreement, lease rent of lease
investment, and the remaining capital after the liquidation of the company,”
reads the draft.
Likewise, foreign experts,
managers and other workers can take back 75 per cent of their income from
salary and other benefits.
The proposed law has promised
not to nationalise businesses and industries with foreign investment, and if
the government needs to acquire the properties of such investment in greater
public interest, it will provide appropriate compensation as per the existing
law.
In the draft, the government has
proposed allowing foreign investors or Non-Resident Nepalese to buy securities
of those companies listed at the Nepal Stock Exchange.
If the Bill is ratified as it
is, foreign investors can establish a venture capital fund to make equity
investment in Nepalese companies, and they can buy any company in operation
with government approval.
It has proposed the removal of
the cap on foreign investment while investment can be made in convertible
foreign currency or Indian rupees.
The draft has proposed complete
income tax waiver for a specific period for hydroelectricity generation and
transmission project, manufacturing industry, mines, tourism and international
airlines with foreign investment.
Similarly, tax waiver will be
offered to those companies that invest in research and development of
agriculture, minerals and other specified technology sector.
No comments:
Post a Comment