Investment by non-resident Nepali in Nepal

Non-resident Nepalis can invest in a variety of businesses because the environment is favorable. Non-resident Nepali is defined as a foreign citizen of Nepalese origin in Section 2 (a) of the Nepal Non-resident Act 2064, and this term also includes a Nepalese citizen residing abroad.

Section 2 (b) “Foreign citizen of Nepali origin” refers to a person who was a citizen of Nepal at any time or whose father, mother, grandfather, or grandmother was a citizen of Nepal and has since acquired the citizenship of any other foreign country that is not a member of the South Asian Association of Regional Cooperation (SAARC).

Non-Resident Nepalis have the following appropriate and advantageous investment grounds in Nepal:

Privileges as a Nepali

According to Section 13 of the Non-Resident Act 2064, a foreigner born in Nepal may operate a business or industry as a Nepali citizen.

A foreign citizen of Nepali origin who has made an investment in accordance with the law has the same rights as a Nepali citizen in any industry or business. Unlike other foreigners, there are no restrictions.

1. Right to open a convertible foreign currency account: Section 6 of the Non-resident Nepali Act 2064 states that a non-resident Nepali who has obtained an identity card may open and operate an account in any commercial bank or financial institution licensed by the Nepal Rastra Bank to carry on financial transactions.
2. Money can be repatriated: According to Section 9 of the Non-resident Nepali Act 2064, “a non-resident Nepali may repatriate the investment and the amount equivalent to the profit earned therefrom in convertible foreign currency in the manner prescribed, notwithstanding anything contained in prevailing law.”
3. It is simple to buy a house or land: Foreign citizens of Nepali origin who want to invest in Nepal are offered incentives by the government.

You can build a house and start a business after purchasing land in Nepal

Section 10 provides that foreign citizens of Nepalese origin are entitled to the following services and concessions:

1. Notwithstanding anything in the prevailing law, a foreign citizen of Nepalese origin may, subject to certain conditions, purchase the prescribed land or other property in order to reside in Nepal for himself/herself or his/her own family.
2. Subject to applicable law, a foreign citizen of Nepalese origin may assign (transfer) the property purchased under subsection (1) to anyone.
3. If a foreign citizen of Nepali origin dies with property in Nepal, such property shall pass to his/her heir who is a foreign citizen of Nepalese origin with an identity card, and in the absence of such heir, the property shall be decided in accordance with the prevailing law.

Easy Visa

The government issues visas to foreigners of Nepali origin who want to invest in Nepal.

Section 11 of the Non-resident Nepali Act 2064 contains provisions concerning visas.

1. Regardless of what is stated in the law, a non-residential visa may be issued for a period not exceeding ten years to a foreign citizen of Nepalese origin or his/her family who has resided or invested in Nepal and has obtained an identity card.
2. The validity period of a visa issued under Subsection (1) may be extended if necessary.

No Capital Gains Tax

The Nepali government levies a tax on the capital brought in by foreigners. However, the Nepali government has enacted legislation exempting foreigners of Nepali origin from paying capital gains tax. According to Section 9 of the Non-resident Nepali Act of 2064:

 No tax will be levied: Regardless of what is contained in the prevailing law, the following shall be in relation to the following: –

1. No tax shall be levied on the capital amount invested by a non-resident Nepali;
2. No tax shall be levied at the time of receipt on any amount sent by a nonresident Nepali to a close relative who is a Nepalese citizen for personal use in an amount not exceeding Fifteen Million Rupees in a fiscal year through any commercial bank or financial institution licensed by the Nepal Rastra Bank (central Bank of Nepal) for financial transactions.
3. No tax shall be levied at the time of receipt on any amount sent by a non-resident Nepali through any commercial bank or financial institution licensed by the Nepal Rastra Bank to any social religious, academic, cultural, charitable, sporting, or natural calamity rescue related institution established without a profit motive (central bank of Nepal). Foreign direct investments have become increasingly important as a source of capital for domestic businesses. Foreigners of Nepali origin, unlike other foreigners, can easily invest in Nepal. Non-Nepalis are welcome to invest in Nepal. In that case, the Department of Industry must be consulted.

Recommended Reading: Foreign direct investment in Cement Factory

NEPAL’S APPROVAL PROCESS FOR FOREIGN DIRECT INVESTMENTS IS BASED ON A FOREIGN INVESTMENT PROPOSAL.

Submission of a proposal

If the NRN wishes to invest in Nepal, it must submit an application to the Department of Industrial Policy with all required information.

Proposals are reviewed within one week, and if necessary, additional information/clarifications are requested.

The Competent Authority is required to make a decision within one week of receiving all required information.