The Foreign Investment and Technology Transfer Act, 2019 (2075) Date of Authentication

The Foreign Investment and Technology Transfer Act, 2019 (2075) Date of Authentication

March 27, 2019 (2075.12.13)

Act No. 34 of the year 2075 (2018/19)

An Act Made to Amend and Consolidate Laws Relating to Foreign Investment and Technology Transfer

Preamble: Whereas, it is expedient to amend and consolidate the prevailing Nepal laws relating to foreign investment and technology transfer in order to make national economy competitive, strong and employment-oriented through mobilization to the maximum extent of the available means and resources for economic prosperity of the country, and to achieve sustainable economic growth through industrialization while creating investment friendly environment to attract foreign capital, technology and investment in the sectors of import substitution, export promotion, through increase in productivity, and of infrastructure development and production of goods or services;

Now, therefore, be it enacted by the Federal Parliament.

  1. Short Title and Commencement: (1) This Act may be cited as the “Foreign Investment and Technology Transfer Act, 2019 (2075).”

(2) Sections 10 and 11 of this Act shall commence on such a date as appointed by the Government of Nepal by a notification in the Nepal Gazette, and other Sections shall commence forthwith.

  1. Definitions: Unless the subject or the context otherwise requires, in this Act,-

(a)        “Industry” means any industry established in accordance with the prevailing law relating to industrial enterprises.

(b)        “One Stop Service Center” means the One Stop Service Center established in accordance with the prevailing law relating to industrial enterprises.

(c)        “Non-resident Nepali” means a person holding the non-resident Nepali identity card in accordance with the prevailing law relating to non-resident Nepalis.

(d)       “Prescribed” or “as prescribed” means prescribed or as prescribed in the Rules framed under this Act.

(e)        “Securities Board” means the Securities Board of Nepal established in accordance with the prevailing law relating to securities.

(f)        “Technology transfer” means any transfer of technology to be made under an agreement between an industry and a foreign investor on the following matters:

(1)        Patent, design, trademark, goodwill, technological specificity, formula, process,

(2)        User’s license, technological know-how sharing or use of technological knowledge (franchise),

(3)        Provision of foreign technical adviser, management and marketing service or other technological skill or knowledge.

(g)        “Board” means the Industry and Investment Promotion Board referred to in the prevailing law relating to industrial enterprises.

(h)        “Ministry” means the Ministry of Industries, Commerce and Supplies

(i)         “Investment Board” means the Investment Board referred to in the prevailing law relating to the Investment Board.

(j)         “Foreign investment” means the following investment made by a foreign investor in an industry or company:

(1)        Share investment in foreign currency,

(2)        Re-investment in an industry of dividends derived from foreign currency or shares,

(3)        Lease finance made in accordance with Section 6,

(4)        Investment made in venture capital fund in accordance with Section 9,

(5)        Investment made in listed securities through secondary securities market in accordance with Section 10,

(6)        Investment made by purchasing shares or assets of a company incorporated in Nepal,

(7)        Investment received through the banking channel after issuing securities in a foreign capital market by an industry or company incorporated in Nepal in accordance with Section 11,

(8)        Investment made through technology transfer, or

(9)        Investment maintained by establishing and expanding an industry in Nepal.

(k)        “Foreign investor” means any foreign individual, firm, company, Non-resident Nepali or foreign government or international agency or other corporate body of similar nature that makes foreign investment, and also includes, in the case of a foreign investor that is an institutional foreign investor, the ultimate beneficiary of such an institution.

(l)         “Foreign investment approving body” means the body referred to in Section 17.

(m)       “Department” means the Department of Industries.

(n)        “Institutional foreign investor” means a foreign company, corporate body or international institution that makes foreign investment.