AN ACT
MADE TO PROVIDE FOR MATTERS RELATING TO FOREIGN
INVESTMENT AND TECHNOLOGY TRANSFER)
Published in Nepal Gazette - 12 Nov. 1992 (049/7/27)
First Amendment Published in Nepal Gazette -
24 Jan. 1996(2052/10/10)
Some Nepal Laws revision Act
Published in Nepal Gazette - 10 Aug. 2000 (2057/4/26)
Preamble:
In the process of industrialization of the country,
it is expedient to promote foreign investment
and technology transfer for making the economy
viable, dynamic and competitive through the
maximum mobilization of the limited capital,
human and the other natural resources.
Be it enacted by Parliament in the twenty first
year of the reign of His Majesty King Birendra
Bir Bikram Shah Dev.
1. Short Title and
Commencement:
a) This Act may be called “The foreign Investment
And Technology Transfer Act, 1992.”
b) It shall come into force at once.
2. Definitions:
Unless the subject or context otherwise requires,
in this Act,
a) “Industry” means any industry as referred
to in Section 3 of the Industrial Enterprises
Act, 1992.
b) “Foreign Investment” means the following
investment made by a foreign investor in any
industry:
1. Investment in Share (Equity)
2. Reinvestment of the earnings derived form
the investment as referred to in sub-section
(1) above,
3. Investment made
in the form of loan or loan facilities.
c) “Technology Transfer” means any transfer
of technology or be made under an agreement
between an industry and a foreign investor on
the following matters:
1. Use of any technological right, specialization,
formula, process, patent or technical know-how
of foreign origin.
2. Use of any trademark of foreign ownership.
3. Acquiring any foreign technical, consultancy,
management and marketing service.
d) “Foreign Investor” means any foreign individual,
firm, company or corporate body involved in
foreign investment or technology transfer including
foreign government or international agency.
e) “Board” Means the Industrial promotion Board
Constituted under Section 12 of the Industrial
Enterprises Act, 1992.
f) “Department” means the Department of Industries
or Department of cottage and Small industries
of Government of Nepal or any other department,
office or agency as specified by Government
of Nepal.
g) “Prescribed” or “ As prescribed” means prescribed
or as prescribed in rules made under this Act
or in and order issued by Government of Nepal
by notification published in the Nepal Gazette.
3. Permission to
be Obtained:
1) Permission of the Department shall be required
to be obtained for foreign investment of technology
transfer.
2) A person desiring to avail the foreign investment
or technology transfer shall be required to
make and application to the Department in the
prescribed form along with the prescribed particulars
for obtaining permission in that behalf.
*3) If an application is made pursuant to sub-section
(2) above, the Department shall, in the case
of an industry with fixed assets up to five
hundred million rupees, itself, and in the case
of an industry with fixed assets in excess thereof,
in accordance with the decision of the Board,
grant permission within thirty days from the
date of application. The Department shall communicate
the decision made in regard to such permission
to the applicant. (*Amended by the First Amendment)
*4) Not withstanding anything contained. In
subsection (1) and (2) above, no permission
shall be granted for making foreign investment
in the industries set forth in the Annex.
Provided that permission may be granted for
the transfer or technology in such industries.
(*Amended by the First Amendment)
4.(Deleted by some Nepal
laws Revision Act)
5. Facilities and
Concessions:
#1) …………………………. (#Deleted by some Nepal laws
Revision Act)
@1a) A foreign investor shall be levied income
tax at rate of fifteen percent only, on the
income earned form foreign technical as well
as management service fees and royalty. (@ Inserted
by the First Amendment)
2) A foreign investor making investment in foreign
currency shall be entitled to repatriate the
following amount outside the Kingdom of Nepal:-
a) The amount received by the sale of the share
of foreign investment as a whole or any part
thereof.
b) The amount received as profit or dividend
in lieu of the foreign investment,
c) The amount received as the payment of the
principal of and interest on any foreign loan.
3) A foreign investor shall be entitled to repatriate
outside the Kingdom of Nepal the amount received
under an agreement for the transfer or technology
in such currency as set forth in the concerned
agreement.
6. Provisions Relating
to Visa:
1) A foreign national visiting the Kingdom of
Nepal in connection with undertaking any study
or carrying out any research with the objective
of making investment in the Kingdom of Nepal
shall be provided a non-tourist visa for up
to six month.
*2) A foreign investor or dependent family or
authorized representative of such a foreign
investor and dependent family of such authorized
representative shall for the purpose of stay
in the Kingdom of Nepal be provided a business
visa until the foreign investment is retained.
Provided that a foreign investor who, at a time,
makes investment in an amount no less than one
hundred thousand United States dollar or in
convertible foreign currency equivalent thereto,
and his dependent family shall be granted a
residential visa until such investment is retained.
(*Amended by the First Amendment)
7. Settlement of
Disputes:
1) If any dispute arises between a foreign investor,
national investor or the concerned industry,
the concerned parties shall be required to settle
the dispute by mutual consultations in the presence
of the Department.
2) If the dispute could not be settled in the
manner as referred to in sub-section (1) above,
it shall be settled by arbitration in accordance
with the prevailing arbitration rules of the
United Nations Commission on International Trade
Law (UNCITRAL).
3) The arbitration shall be held in Katmandu,
The laws of Nepal shall be application in the
arbitration.
@4) Notwithstanding anything contained in subsections
(1),(2)and (3)above , disputes arising in regard
to foreign investment made in the industries
with investment as prescribed may be settled
as mentioned in the foreign investment agreement.
(@ Inserted by the First Amendment)
8. Power to Frame
Rules:
Government of Nepal may frame necessary rules
for carrying out the objectives of this Act.
9. This Act to Prevail:
Not withstanding anything contained in the existing
laws, matters stipulated under this Act and
rules made there under shall be dealt accordingly.
@9A. Power to Make Alternation or Amendment
in Annex:
Government may, by notification in the Nepal
Gazette, make necessary alterations or amendments
in Part (B) of the annex.
10. Repeal and Savings:
1) The Foreign Investment and Technology Act,
1981 is hereby repealed.
2) All acts performed or action taken under
the Foreign Investment and Technology Act, 1981
shall be deemed to have been performed or taken
under this Act.
Annex
(Relating to sub-section (4) of section (3)
Industries not to be granted permission for
making foreign investment)
Part (A)
1. Cottage Industries.
2. Personal Service Business (Business such
as Hair Cutting, Beauty Parlors, Tailoring,
Driving Training. Etc.)
3. Arms and Ammunition Industries.
4. Explosives, Gunpowder.
5. Industries related to Radio- active Materials.
6. Real Estate Business (Excluding Construction
Industries)
7. Motion Picture Business (produced in national
languages and the language of the nation).
8. Security Printing.
9. Currencies and Coinage Business.
Part (B)
1. Retail Business.
2. Travel Agency.
3. Trekking Agency.
4. Water Rafting.
5. Pony Trekking.
6. Horse Riding.
7. Cigarette, Bidri (Tobacco), Alcohol (excluding
those exporting more than 90%)
8. Internal Courier Service.
9. Atomic Energy.
10. Tourist Lodging.
11. Poultry Farming.
12. Fisheries.
13. Bee-Keeping.
14. Consultancy Services such as Management,
Accounting, Engineering and Legal Services.
