FOREIGN INVESTMENT AND BUSINESS INCORPORATION

Overview

Nepal has a relatively open but regulated policy relating to foreign investment. Nepal has an approval based regime of foreign investment. Generally foreign investment is permitted in the industrial sectors. Save a few sectors, there is generally no ceiling on the percentage of foreign equity investment. The key legislations regulating foreign investment in Nepal are Foreign Exchange (Regulation) Act, 2019 (1962), Foreign Investment and Technology Transfer Act, 2075 (2019), Public Private Partnership, 2075 (2019), Industrial Enterprise Act, 2076 (2020) and the relevant regulators under the respective legislation are the Nepal Rastra Bank (Central Bank), the Department of Industries/Industrial Promotion Board and the Investment Board Nepal. Under these legislations foreign investments generally include equity investment and loan investment. The relevant legislations also regulate the technology transfer. The Companies Act 2063 (2006) deals with incorporation of a company and registration of the branch office or contact office of foreign companies.

Foreign investment is one of the key strengths of Pioneer Law and Pioneer Law regularly advises foreign investors on their entire investment cycle- from the tax-efficient structuring of their investment and right through their exit. Pioneer Law also advises the foreign investors in joint venture arrangements with local parties.

Our services in this area of practice include- (a) structuring of investment, (b) incorporation of the local joint venture / subsidiary company/branch office, (c) conducting legal due–diligence of the target company, (d) procuring necessary regulatory approvals, (e) documentation and negotiation of transaction documents, (f) advising on compliance issues in relation to the investment, (g) documentation on the technology transfer, and (h) advising on suitable exit strategies. Pioneer Law also represents the clients before the courts and arbitration tribunal on the matter relating to the foreign investment. Pioneer Law has also conducted legal reform projects in the foreign investment laws and companies law. Pioneer Law is also familiar with the other side of the equation as Pioneer Law often represents the target companies operating in a variety of sectors.

Please email us at info@pioneerlaw.com for more information on our work or overview of our Foreign Investment and Business Incorporation practice.