Foreign Direct Investment is a category of cross-border investment in which an investor resident in one country establishes a lasting interest in a significant degree of influence over an enterprise resident in another country. FDI has made it easier to transfer technology across borders.&nbsp; FDI in Nepal is governed by The Foreign Investment and Technology Transfer Act, 2019, requires preliminary approval from the&nbsp;<a href="https://doind.gov.np/">Department of Industry</a> /&nbsp;<a href="https://ibn.gov.np/">Investment Board Nepal</a> followed by final approval by Nepal Rastra Bank.&nbsp;Being a foreign investor you are interested in investing in Nepal through technology transfer but do not know the process of bringing FDI in Nepal then this blog will guide you through. This blog will be mainly focused on bringing FDI via technology transfer.&nbsp;&nbsp;If you are interested in the overall process of FDI in Nepal you can read our blog on “<a href="https://www.biznestbazaar.com/blog/process-of-foreign-direct-investment-fdi-in-nepal">Process of Foreign Direct Investment (FDI) in Nepal</a>”.&nbsp;&nbsp;We also have a blog on bringing&nbsp;<a href="https://www.biznestbazaar.com/blog/foreign-direct-investment-via-loan">Foreign Direct Investment via loan</a> and through the&nbsp;<a href="https://www.biznestbazaar.com/blog/how-to-bring-fdi-in-nepal-through-the-purchase-of-share">purchase of shares</a>, which you can read if you are interested.&nbsp;<h2>Governing Authority</h2>&nbsp;Department of Industry:&nbsp; Foreign Investment not exceeding Six Billion Rupees. (NRP 6 Arba)&nbsp;Investment Board: Foreign Investment exceeding Six Billion Rupees. (NRP more than 6 Arba)&nbsp;Nepal Rastra Bank (Foreign Exchange Management Department)&nbsp;<h2>Governing Laws</h2>&nbsp;The Foreign Investment and Technology Transfer Act, 2075 (2019) (<a href="https://www.lawcommission.gov.np/en/wp-content/uploads/2019/09/The-Foreign-Investment-and-Technology-Transfer-Act-2019-2075.pdf">FITTA</a>)&nbsp;Foreign Investment and Technology Transfer Regulation, 2077 (<a href="https://pkf.trunco.com.np/files/publications/1657093161_FITTA%20Report%202021%20JAN_20210122122451.pdf">FITTR</a>)&nbsp;Public Private Partnership and Investment Act, 2019 (<a href="https://ibn.gov.np/uploads/documents/public-private-partnership-and-investment-act-ppp-and-investment-act-2019pdf-1483-330-1657605913.pdf">PPPIA</a>)&nbsp;Nepal Rastra Bank Foreign Investment and Loan Management by Laws 2078 (<a href="https://www.nrb.org.np/contents/uploads/2022/01/FXMD-Circular19_2078.79_NRB-Foreign-Investment-and-Loan-Mgt-Bylaw-2078-amend.pdf">NRB FILM</a>)&nbsp;Industrial Enterprise Act, 2076 (<a href="https://nwedcpl.com/wp-content/uploads/2021/04/Industrial-Enterprises-Act-2020.pdf">IEA</a>)&nbsp;Also read:&nbsp;<a href="https://www.biznestbazaar.com/blog/industry-registration-process-in-nepal">Industry Registration Process In Nepal</a><h2>&nbsp;</h2><h2>Process of Foreign Direct Investment</h2><h2>&nbsp;</h2><h3>Step 1 :Register the user Name in IMIS</h3>&nbsp;To create a new user name, visit the link&nbsp;<a href="https://imis.doind.gov.np/#/auth/register">Department Of Industry</a>&nbsp; to register the user’s name.&nbsp; After you go through the link, you will view the following page:<figure class="image"><img src="https://api-v1.biznestbazaar.com/public/blog_media/1_otcg572.png"></figure>You have to make sure to use your phone number and email address. After you fill in all the information you will get an email in your email follow all the instructions as given in the email and change password. After the change of password, login again.&nbsp;<h2>&nbsp;</h2><h3>Step 2: Fill the details and upload the documents</h3><figure class="image"><img src="https://api-v1.biznestbazaar.com/public/blog_media/2_2ApxXy2.png"></figure>&nbsp;You need to click on the icon of Technology Transfer Agreement (प्रविधि हस्तान्तरण सम्झौता), then click on the green icon of (नयाँ प्रविधी हस्तान्तरण)&nbsp;on the right side of the screen and fill the detail.<figure class="image"><img src="https://api-v1.biznestbazaar.com/public/blog_media/3_qXFmwv8.png"></figure><h3>Step 3: FDI Approval in DOI or IBN</h3>&nbsp;To get FDI approval, you must apply along with the necessary documents in the DOI or IBN:&nbsp;<ol><li>Project proposal - 2 copies &nbsp;</li><li>Joint Venture Agreement (in case of more than 1 investor) &nbsp;</li><li><a href="https://notarynepal.com/services/legal-documents-notarization-in-nepal#:~:text=How%20Does%20Online%20Notarization%20Work,%2C%20bank%20transfer%2C%20or%20cash.">Notarized</a> copy of citizenship certificate of local partner or Certificate of Incorporation, Memorandum of Association and Articles if the local party is a company – 1 copy &nbsp;</li><li>Notarized copy of passport of foreign partner or Certificate of Incorporation, Memorandum of Association and Articles of Association, if the foreign party is a company– 1 copy &nbsp;</li><li>Bio data of foreign investor or company profile – 1 copy &nbsp;</li><li>Financial Credibility Certificate issued by a bank of the foreign investor’s country &nbsp;</li><li>Letter of Authorization from the investor (if necessary)</li></ol><h2>&nbsp;</h2><h3>Step 4: FDI Approval from NRB&nbsp;</h3>&nbsp;For the purpose of transferring technology, it should get approval from the NRB before bringing technology to Nepal. Investors must apply in NRB with an application and necessary documents to get the approval to bring FDI to Nepal for loans.<h3>&nbsp;</h3><h4>Application Sample:&nbsp;</h4>&nbsp;<a href="https://drive.google.com/file/d/10U42jFF4GVpo6-O7Wh4yzEeLxESV14P9/view?usp=drive_link">विदेशी मुद्रा भित्र्याउनुपूर्व राष्ट्र बैंकलाई दिइने लिखित जानकार</a>&nbsp;<h3>Step 5:&nbsp; Prior notification to be given to Nepal Rastra Bank before bringing FDI in Nepal</h3>&nbsp;Notification shall be given to NRB before bringing FDI, while notifying you must submit the listed documents listed below:&nbsp;&nbsp;<a href="https://drive.google.com/file/d/1-HBwl7d3cxbHoAu12YgShMirXRplDXpw/view?usp=drive_link">Notification shall be given to NRB before bringing FDI</a>&nbsp;<h4>Application Sample:</h4>&nbsp;<a href="https://drive.google.com/file/d/10U42jFF4GVpo6-O7Wh4yzEeLxESV14P9/view?usp=drive_link">विदेशी मुद्रा भित्र्याउनुपूर्व राष्ट्र बैंकलाई दिइने लिखित जानकार&nbsp;</a>&nbsp;<h3>Step 6: Recording of FDI in NRB after investment or bringing FDI in Nepal</h3>&nbsp;Recording of FDI is must in NRB after bringing FDI or after investment.&nbsp; You must submit the application with the necessary document listed mentioned below:&nbsp;&nbsp;<ol><li>Copy of the decision of the&nbsp;<a href="https://www.investopedia.com/terms/b/boardofdirectors.asp#:~:text=What%20Is%20a%20Board%20of,have%20a%20board%20of%20directors.">Board of Directors</a> or authorised officer regarding investment accounting, or application from the relevant foreign investor/person or institution authorised by them. &nbsp;</li><li>Copy of foreign investment approval. &nbsp;</li><li>Copy of company/industry registration certificate. &nbsp;</li><li>Copy of business operation licence (as required). &nbsp;</li><li>Copy of Permanent Account Number (<a href="https://nepaltradeportal.gov.np/register-pan/vat">PAN</a>) certificate. &nbsp;</li><li>Copy of Memorandum and Articles of Association. &nbsp;</li><li>Copy of the latest audit report. &nbsp;</li><li>Copy of proof of latest tax clearance or tax return submission. &nbsp;</li><li>Copy of updated shareholder registration list from the Office of Company Registrar (for companies listed on the securities market, share register certified by a licensed share registrar from the Securities Board). &nbsp;</li><li>Certificate issued by the relevant bank and financial institution regarding the entry of foreign currency into Nepal as foreign investment, and SWIFT message proof. &nbsp;</li><li>Certified copy of foreign investment agreement and approved share purchase-sale agreement (as needed). &nbsp;</li><li>Proof of approval provided by the central bank to bring in foreign currency for foreign investment, or support-approval of foreign investment, or evidence of prior notification as per rules.</li></ol>&nbsp;<h4>For foreign investor institutions</h4>&nbsp;<ol><li>Certified copy of institution registration certificate. &nbsp;</li><li>Certified copy of the latest audit report (However, audit report is not mandatory for investments less than USD 1 million or equivalent foreign currency. Similarly, if financial statements prepared by the Board of Directors/senior management are attached with proof that the financial statements submitted by the foreign investor do not need to be audited, an audit report is not mandatory). &nbsp;</li><li>Certified copy of documents revealing the identity of the real owner (not required for companies listed on the Securities Board). &nbsp;</li><li>Certified copy of the decision of the Board of Directors or authorised officer regarding foreign investment in Nepal.</li></ol>&nbsp;<h4>For foreign investors who are natural persons</h4>&nbsp;<ol><li>Certified copy of passport.</li></ol>&nbsp;However, for non-resident Nepalis investing in Nepal through an investment company established in joint investment with the Government of Nepal and non-resident Nepalis, a certified copy of the passport is not required if a list of investors is received through such investment company (with self-declaration of full responsibility by the Board of Directors or authorised officer as per the board's decision, unless otherwise stated) including details such as name, passport number, issuing country, address, country from which amount was brought in, etc.&nbsp;Note:&nbsp;'Certified' means notarized. The applicant must be an authorised officer.For foreign investments made through stock market purchase in listed companies/industries as per prevailing laws, if documents proving this are submitted.&nbsp;&nbsp;<h4>Application Sample:</h4>&nbsp;<a href="https://drive.google.com/file/d/10HT0skAgq_qoRk_Qb1Xfb8gqRHK2IZND/view?usp=drive_link">Application to record foreign investmnet.pdf</a>&nbsp;&nbsp;File listed document that needs to be submitted in NRB to record FDI if FDI is brought without prior approval of NRB.<a href="https://drive.google.com/file/d/18irikjBGx1M9xqIY2ECC3VCxE1f4OsHo/view?usp=sharing">approval.pdf</a>&nbsp;<h4>Application Sample:</h4>&nbsp;<a href="https://drive.google.com/file/d/1TD4sKDCOEiOkXOjzW8tPJoda_YZQhb3r/view?usp=drive_link">Application to Ratification-Cum-Record of Foreign Investment.pdf</a>&nbsp;&nbsp;File listed document that needs to be submitted in NRB to record FDI if FDI is brought without prior approval of NRB.&nbsp;<a href="https://drive.google.com/file/d/1OPWDaHXVcbHncdr9xjfZ0_VUFIuwErMo/view?usp=drive_link">brought without prior approval of NRB..pdf</a> &nbsp;<h3>&nbsp;</h3><h4>Application Sample</h4>&nbsp;<a href="https://drive.google.com/file/d/1e2mW1SQ9TxYGSsChkqwXmlCyAlTQ6khj/view?usp=drive_link">Application Sample.pdf</a>&nbsp;<h2>&nbsp;</h2><h3>Step 7:&nbsp;Recording in DOI/ IBN after transfer of technology</h3>&nbsp;The application must be submitted along with the documents in DOI/IBN where you get approval to bring FDI. The list of documents is as follows:&nbsp;<ol><li>Technology Transfer Agreement – 3 copies &nbsp;</li><li>Notarized copies of Certificate of Incorporation, Memorandum of Association and Articles of Association of the domestic company – 1 copy &nbsp;</li><li>Notarized copy of the passport of foreign investor or Certificate of Incorporation, Memorandum of Association and Articles of Association if the foreign party is a company – 1 copy &nbsp;</li><li>Foreign investor’s Bio-Data or company profile &nbsp;</li><li>Minutes of the meeting of Board of Directors from concerned companies for Technology Transfer &nbsp;</li><li>Letter of Authorization from the company &nbsp;</li><li>Notarized copy of current Audit Report and Tax Clearance Certificate of the domestic company</li></ol>&nbsp;Also read:&nbsp; <a href="https://www.biznestbazaar.com/blog/company-registration-process-in-nepal">Company Registration Process in Nepal</a>&nbsp;Disclaimer: The information provided here is for informational purposes only and should not be considered as legal advice. Please consult with a qualified legal expert for professional legal opinions. You can also consult with our&nbsp;<a href="https://www.biznestbazaar.com/hire-professional">professionals</a> for further assistance.

Foreign Direct Investment via Technology Transfer

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