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Social Welfare Council (the “Council”) is the main regulatory body responsible for regulating INGOs in Nepal. The Council was established under the Social Welfare Act 1992 (the “Act”); Social Welfare Rules 1992 (the “Rules”) is the subsidiary legislation to the Act. Besides the Act and the Rules, the Council adopts various guidelines to regulate INGOs effectively. These guidelines are updated periodically. At present, the Guidelines for General Agreement, Service and Facilitation, Guidelines for Project Appraisal, Guideline for NGO Approval, Guidelines for NGO Affiliation, Guidelines for Monitoring and Evaluation, and Guidelines for Project Advisory Committees, are the key guidelines regulating the establishment and activities of INGOs in Nepal. The INGOs are required to take approval as well enter into agreements with the Council to carry out their functions.
Is it mandatory to obtain approval from the Council?
Yes, it is mandatory for INGOs desirous of conducting developmental, social or welfare activities in Nepal to obtain approval from the Council.
What are the approval requirements?
Following are the requirements to be met by the INGO to obtain the approval:
Is it also mandatory to obtain approval for providing financial assistance only?
INGO is not required to obtain the approval to provide financial assistance. However, the receiving NGO must obtain the approval from the Council in order to receive such assistance.
What is the General Agreement?
The General Agreement is a bilateral agreement which generally serves as a main agreement forming the basis for the presence and operation of the INGO in Nepal and outlines the areas in which the INGO can support in Nepal, minimum amount it has to fund annually in Nepal, provisions for establishing its office in Nepal and filing and reporting requirement, etc. The most recent template of the General Agreement at be found at [insert link].
What is the procedure (and the documents required) to enter into the General Agreement?
An application, along with the following documents, is required:
If the charter documents of the INGO are not in English, English notarized translated versions notarization are required.
What is the term of General Agreement?
The General Agreement is entered only for a certain period of year (minimum 3 years and maximum 5 years) and is subject to the renewal requirement thereafter.
Can the General Agreement be terminated before the expiry date? If yes, how?
Yes, the General Agreement can be terminated. The agreement can be terminated by the either party by giving a six months advance notice.
What are the procedures to renew the General Agreement?
In order to renew the General Agreement for a next term, following information/documents shall be provided:
Is it mandatory for an INGO to open an office in Nepal?
Yes. It is mandatory to open an office in Nepal.
What will be the legal status of the local office?
The local office established under the General Agreement will not have independent legal status or corporate personality separate from the INGO incorporated and existing under the laws of foreign jurisdiction. It will also not have authority to implement any project in Nepal directly without the involvement of local NGOs. The local office of the INGO will also have to be registered with the tax authority of Nepal and obtain permanent account number.
What is Project Agreement?
Project Agreement is a tripartite agreement between the INGO, NGO (as the local partner), and the Council which outlines the areas of activities in which the INGO will assist the local NGOs, annual funding the INGO shall make in implementing the projects, the areas within Nepal where the projects will be implemented, role and responsibilities of each party to the Project Agreement.
What will happen when there are multiple local partners?
In such case, the Project Agreement will be concluded between the INGO and the Council.
Is it possible to carry out the project without a local partner?
No. INGO cannot implement its projects directly in Nepal without the involvement of local entities as partner organizations.
When shall the the Project Agreement be entered into?
The Project Agreement shall be entered into within three (3) months from the date of the signing of the General Agreement.
What is the term of Project Agreement?
The term of the Project Agreement will be linked to the duration of the project to be implemented under the Project Agreement.
What are the consequences of failing to enter into the Project Agreement?
Failure to enter into the Project Agreement even after the considered period of three months, provided by the Council after initially failing to enter into the same within the initial period of three months, will cause the invalidation of the General Agreement and may also lead to the cancellation of the work permit and visa of the INGOs representatives.
How many Project Agreements can be concluded under one General Agreement?
More than one Project Agreement can be concluded under one General Agreement. The number is not fixed.
What are the filing and reporting compliances to be met by the INGO?
The INGO is required to:
What are the consequences for non-compliance of the General and Project Agreements?
The non-compliance of the General and Project Agreements may result in the following consequences:
Is there any requirement on the allocation of the budget?
Yes. The budget shall be allocated in such a way that the administrative cost does not exceed twenty (20) percent of the budget.
Is it mandatory to open a bank account in a commercial bank in Nepal?
Yes. It is mandatory to have a bank account in one of the commercial banks of Nepal. Also, the INGO will have to deposit the amount of the Financial Commitment as committed under the General Agreement for the implementation of the project.
Disclaimer: This Pioneer Law Briefing may not necessarily deal with every important aspect of the subject matter. This Briefing is intended for general information only and not to be construed as legal or other advice.
