MoInd to approve FDI up to Rs. 5 bn

Kathmandu, June 4: The government is making a provision according to which the Department of Industry will approve the Foreign Direct Investment (FDI) up to Rs. 5 billion – about 48.8 million US dollars.

The new Foreign Investment (Amendment and Integration) Bill, 2017 which was endorsed by the Cabinet on Saturday, has proposed to entrust the department with a right to approve the FDI worth Rs. 5 billion.

Currently, the department has been approving the FDI up to Rs. 2 billion while foreign investment from Rs. 2 billion to Rs. 10 billion is approved by the Industry and Investment Promotion Board, and investment larger than Rs. 10 million is endorsed by the Investment Board Nepal (IBN).

“Industry and Investment Promotion Board will work as a policy entity. We are conscious of reducing the time that takes while getting approval for FDI,” said Minister for Industry Nabindra Raj Joshi.

The new legal instrument will replace the prevailing Foreign Investment and Technology Transfer Act, 1992.

It has proposed the removal of the cap on foreign investment.

 Although it has proposed to set the minimum amount of foreign investment through the bylaws, there will be no maximum limit for investment in the country.

Through the Bill, the Ministry of Industry (MoI) has proposed allowing the foreign investors or Non-Resident Nepali to buy the securities of the companies listed at the Nepal Stock Exchange (NEPSE).

Likewise, a foreign investor can make an investment in securities or equity in any Nepalese public limited company, or buy an industry that is in operation.

 “Apart from the investing in securities, foreign investors can invest up 100 per cent in any companies. But, the government can impose cap on service industry which won’t be less than Nepal’s commitment to the World Trade Organisation,” read the Bill.

The proposed legal framework on the foreign investment has made a clear provision on the ‘exit policy’.

Foreign investors can leave the country after clearing their liabilities following the government approval for the same.