 |
Economy
Foreign Investment & Export
Export Policy
- The production and quality of exportable products will be raised to make them competitive in the international
market.
- Necessary efforts will be made to increase and diversify exports of goods and services with the objective of
increasing foreign exchange earnings.
- Exports will be promoted by raising the production and quality of traditional as well as new products.
Similarly, more emphasis will be placed on the export of profitable but processed and finished products. For the
export promotion of these products, new markets will be identified.
- Foreign exchange earnings will be increased and opportunities for gainful employment will be created by
identifying and increasing the production of new products.
- Service-oriented activities will be promoted to increase foreign exchange earnings.
- Encouragement will be given to the export of skilled manpower in an organized way.
- Appropriate monetary, foreign exchange and fiscal policies will be formulated and necessary changes will be
made in the administrative procedures to make them liberal, simple and dynamic in order to implement above policies
on an efficient, smooth and transparent basis.
- Export Strategy:
- Licenses will not be required for the export of products other than banned of quantitatively restricted items
as listed. In case of quantitatively restricted products, arrangement for issuance of export license will be made
in consultations with the private sector. Quantitative restrictions in the export of such products will gradually
be removed through appropriate taxation measures.
- For export promotion, improvements will made in the existing transit transport network and its infrastructure.
Administrative procedures will also be made transparent, smooth and efficient.
- For the promotion of exports, container service will be introduced and the existing bonded warehousing system
will be further expanded and improved.
- The duty drawback scheme for the refund of import duty paid on the importation of raw materials and
intermediate goods required for the production of exportable products will be effectively implemented. In this
context, duty on import of raw materials will be fully exempted taking into consideration the needs, or the bonded
warehousing system will be introduced for the storage of such materials.
- Exports will be free from all charges except the service charge. However, the provisions of para 1 above will
be applicable in respect of the export of essential products.
- For the promotion of exports, Export Promotion Zone (EPZ) will be established. No duty will be levied on the
raw materials and auxiliary imports used by industries established in such EPZ. Industries exporting more than 90%
of their production will be granted similar facilities as given to the industries established in EPZ.
- As a preparatory step towards full convertibility of the Nepalese currency in trade and services, exporters
will have to sell in the stipulated percentage the amount of foreign exchange earned through exports of goods and
services to commercial banks at a rate remaining balance to Nepal Rastra Bank at an exchange rate fixed by the
Government. No license will be required and no quantitative restriction will be imposed on the imports of raw
materials (except stipulated) required for the export-oriented and import-substituting industries. But for the
import of such materials, foreign exchange will be made available by the commercial banks at the rate fixed by
market mechanism. Exporters will be allowed to open a foreign exchange account in the banks for the purpose of
spending certain percentage of one's foreign exchange earnings in trade promotion activities.
- Export Valuation System will gradually be abolished after the fully convertibility of the Nepalese Currency.
- Quality will be tested from time to time in order to improve the standard of exportable products and necessary
information will be made available for this purpose.
- Simple and convenient procedures relating to pre- and post-shipment credits will be adopted on priority basis.
- Income tax on income from exports will be fully exempted, and income earned from exports to India on the basis
of letter of credit or agreed banking document will also be free from income tax.
- Emphasis will be given on the development of packaging technology to maintain the quality standard of export
products.
- Nepalese mission abroad will be geared up towards export promotion activities, and trade missions will be
opened and institutionalized on the basis of feasibility.
- No quantitative restrictions will be imposed on the exportable products carried by tourists while returning
from Nepal.
- Exports procedures and documentation, thus be formulated, will be short and simple.
- An annual indicative export plan and program on the basis of feasibility will be formulated with the
co-operation of private sector to promote exports.
- Necessary information and training relating to technology, marketing and export procedures required for export
promotion will be provided on an institutionalized basis and arrangements will also be made for the participation
in national and international trade fairs for market promotion.
- Regular monitoring will be made to avoid distortions in exports and imports. Strong actions will be taken in
case of misuse of facilities.
- Export promotion, research and development, and training schemes will be developed, on institutional basis, for
developing new exportable products, and for raising the quality and production of the traditional exportable
products.
- Deemed Export:
If any product earns foreign exchange by selling one's own products to projects run under bilateral or multilateral
aid or if such finished of semi-finished products are sold to EPZ, such sales will be granted facilities at par
with exports. Customs duty, sales tax and excise duty levied on such sales will be refunded and the income
generated from such sales tax and excise duty levied on such sales will be refunded and the income generated from
such sales will be exempted from income tax. In addition, foreign exchange earned from such sales will be refunded
and the income generated from such sales will be exempted from income tax. In addition, foreign exchange earned
from such sales can be sold at the rate fixed by the market mechanism after submitting the stipulated percentage
amount to Nepal Rastra Bank at the rate fixed by the Government.
- Export Procedure & Documentation
Only a registered firm or company is eligible to export the goods. The following documents are required for Export
to third country by airfreight.
- Custom Declaration Form
- Commercial invoice
- Certificate of origin from local chamber of commerce
- GSP form 'A' if applicable
- Copy of letter of credit or advance payment statement received from the bank.
- Foreign Exchange Declaration Form of Nepal Rastra Bank
- Packing List
- Copy of Firm/company Registration Certificate
- Copy of income tax registration certificate
- Airway bill
- Letter of authority to clear the consignment
- Photosanitary certificate for agricultural products/plants
- Certificate from Department of Archaeology for the export of statues, Thankas, Wood carving of
archaeological value etc.
- Visa authorization certificate from garment visa office of National Productivity and Development Centre
for the export of garments to USA and Canada.
- CITES Certificate from the Department of National Parks and wild life conservation for the export of
bone and horn products.
- Certificate on invoice from the Handicrafts Association of Nepal for handicraft goods and silver
products.
All the above documents except of No. 10 and additional following documents are required for export to third
country by sea freight.
- Transport manifesto, one copy per truck
- Custom transit declarations
- Transit declaration invoice for goods in transit via India/Bangladesh to third country destination.
- Export Banned and Quantitatively Restricted Products
- Products Banned for Exports:
- Articles of Archaeological and Religious Importance
- National and foreign coins of archaeological value
- Idols of gods and goddesses, palm leaf inscription (Tad Patra), plant leaf inscription
(Bhojpatra)
- Scroll (Thanka paintings) of historical importance
- Cows & Oxen
- Conserved Wildlife and Related Articles
- Wild animals
- Bile and any part of wild animals
- Musk
- Snake skin, lizard skin
- Drugs
- Marijuana, opium, hashish (as defined in the Single Convention on Narcotics, 1961)
- Metals and Jewelleries
- Valuable metals and Jewelleries (except permitted under bag and baggage regulations and
products manufactured by Nepalese Industry except of diamond)
- Articles of Industrial Importance
- Explosive materials and the related fuse or materials needed for fuse
- Materials used in the production of arms and ammunition
- Industrial Raw Materials
- Raw hides and skin (including dry salted)
- Raw Wool
- All the imported raw materials, spare parts and capital goods.
- Other Products
- Products under Quantitative Restrictions:
- Rice
- Maize
- Wheat
- Arahar
- Gram
- Lentil
- Black Peas
- Mustard
- Rapeseed
- Poppy Seeds
- Raw Silk exceeding 100 Kg. without L/C
Products as notified by His Majesty's Government in the Nepal Gazette from time to time.
- Products allowed for Free Exports:
All products other than banned ones and which are under quantitative restrictions.
Notes:
- The Ministry of Industry, Commerce & Supplies will decide from time to time the goods to be included under
the category of quantitative restrictions and volume of their exports.
- The Ministry of Industry, Commerce & Supplies will interpret as to which of the products listed above will
be permitted to export.
- Products Banned For Imports
- Products injurious to health
- Narcotic drugs like, opium and morphine
- Liquor containing more than 60 percent alcohol
- Arms and ammunitions and explosives (except under import license of His Majesty's Government)
- Materials used in production of arms and ammunition
- Guns and cartridges
- Capes without paper
- Arms and ammunitions, and other explosives
- Communication equipment: wireless, walkie-talkie, and similar other audio communication equipment's
(except under import license of His Majesty's Government)
- Valuable Metals and Jewelleries (except permitted under baggage rules)
- Beef and beef products
- Any other product notified by His Majesty's Government in the Nepal Gazette.
- Major Trading Partners Exports
| F.Y. 1998/99 to 2000/01 |
Value in '000 Rs. |
| S.N. |
Countries |
FY 1998/99 (2055/56) |
FY 1999/2000 (2056/57) |
FY 2000/2001 (2057/58) |
| 1. |
India |
12,530,700 |
21,220,700 |
27,304,100 |
| 2. |
U.S.A |
9,520,305 |
13,677,746 |
14,973,727 |
| 3. |
Germany |
7,820,698 |
7,510,563 |
6,178,557 |
| 4. |
Japan |
NR |
705,048 |
1,341,086 |
| 5. |
U.K. |
521,820 |
1,192,438 |
980,666 |
| 6. |
France |
479,240 |
735,513 |
676,031 |
| 7. |
Italy |
385,024 |
NR |
675,156 |
| 8. |
Switzerland |
281,482 |
418,497 |
580,024 |
| 9. |
Bangladesh |
1,296,282 |
NR |
520,703 |
| 10. |
Belgium |
283,336 |
812,105 |
392,079 |
| 11. |
Hong Kong* |
NR |
504,276 |
NR |
| 12. |
Spain |
NR |
301,318 |
NR |
| 13. |
Austria |
330,900 |
NR |
NR |
| Sub Total |
33,449,787 |
47,078,204 |
53,622,129 |
| Other Countries** |
1,819,485 |
2,482,824 |
2,897,671 |
| Grand Total |
35,269,272 |
49,561,028 |
56,519,800 |
Note: Trade with India for the F.Y. 1998/99 and 1999/2000 is revised and 2000/2001 is provisional.
* Special Administrative Region of China
** Including exports to Tibet, Autonomous Region of People's Republic of China.
NR Not in the rank in that particular year.
Source: Nepal Rastra Bank Trade Promotion Centre
- Percentage Share of Major Commodities in the Overseas Exports of Nepal
| F.Y. 2000/01 |
Value in '000 Rs. |
| S.N. |
Commodities |
Unit |
Quantity |
Value in '000 Rs. |
Share in % |
| 1. |
Readymade Garments |
Pes. |
43,430,777 |
11,431,246 |
39.8 |
| 2. |
Woolen Carpet |
Sq.m |
2,209,828 |
8,603,721 |
30.0 |
| 3. |
Woolen & Pashmina goods |
|
|
5,5269,548 |
18.4 |
| 4. |
Hides and Goatskin |
Sq.ft. |
14,813,144 |
668,097 |
2.3 |
| 5. |
Pulses (Lentils) |
M.T. |
15,094 |
510,461 |
1.8 |
| 6. |
Towel |
|
|
447,517 |
1.5 |
| 7. |
Handicrafts |
|
|
284,400 |
1.0 |
| 8. |
Nepalese Paper & Paper Products |
|
|
259,805 |
0.9 |
| 9. |
Silverware & Jewellery |
|
|
188,608 |
0.7 |
| 10. |
Micro Transfer |
|
|
57,769 |
0.2 |
| 11. |
Wooden & Bamboo Goods |
|
|
30,110 |
0.1 |
| 12. |
Tea |
M.T. |
695 |
23,074 |
0.1 |
| 13. |
Miscellaneous |
|
|
28,690,299 |
100.0 |
| Total |
|
|
28,690,299 |
100.0 |
- List of Exportable and Potential Export Products of Nepal
- Animals & Dairy Products
| Hs. |
Sitc |
Products |
| 04.01 |
061.6 |
Milk and Cream |
| 0405.00 |
023.0 |
Ghee |
| 0405.10 |
023.0 |
Butter |
| 0406.10 |
024.0 |
Cheese (fresh) |
| 04.09 |
|
Natural Honey |
- Plants & Cut Flower
| Hs. |
Sitc |
Products |
| 0601.00 |
292.6 |
Plants bulbs, tubers & corms |
| 0602.00 |
292.4 |
Live plants |
| 0603.00 |
292.7 |
Cut flowers |
| 0604.00 |
292.4 |
Foliage & other parts of plants |
- Vegetable, Fruits & Fruit Products
| Hs. |
Sitc |
Products |
| 0701.90 |
054.1 |
Potato |
| 0702.00 |
054.4 |
Tomato |
| 0704.00 |
054.59 |
Fresh vegetables (cabbage, cauliflower, asparagus etc.) |
| 0709.51 |
054.59 |
Mushroom |
| 0713.40 |
054.2 |
Pulses (lentils, mung, gram, arhar, peas, blackgram etc.) |
| 0710.00 |
054.59 |
Other vegetables like peas, beans etc. |
| 0805.10 |
057.11 |
Orange, mandarin |
| 0804.50 |
057.97 |
Mango, guava |
| 0805.30 |
057.21 |
Lemon & lime |
| 0808.10 |
057.4 |
Appale, appricot |
| 2007.00 |
058.3 |
Fruit jam, jelly |
| 2009.00 |
058.51 |
Fruit juice/squash |
- Tea/Spices
| Hs. |
Sitc |
Products |
| 0901.00 |
071.11 |
Coffee |
| 0902.30 |
074.1 |
Tea |
| 3004.90 |
541.79 |
Herabal tea |
| 0906.00 |
075.22 |
Cinnamon (leaf & bark) |
| 0908.30 |
075.24 |
Large Cardamom |
| 0910.10 |
075.26 |
Ginge (dried or fresh) |
- Cereals & Cereal Preparation
| Hs. |
Sitc |
Products |
| 1005.90 |
044.0 |
Maize |
| 1007.00 |
045.91 |
Millet |
| 1101.00 |
046.01 |
Wheat flour |
- Sugar, Sugar Preparations, Honey
| Hs. |
Sitc |
Products |
| 1703.10 |
1702.00 |
Molasses |
| 1702.00 |
062.6 |
Natural honey |
| 1108.12 |
591.11 |
Maize Starch |
| 1702.40 |
061.9 |
Glucose (aggregates, liquid) |
- Oil Seeds, Oil & Fat
| Hs. |
Sitc |
Products |
| 1204.00 |
223.4 |
Linseed |
| 1206.00 |
222.4 |
Sunflower seed |
| 1207.20 |
222.3 |
Cotton seed |
| 1207.50 |
223.8 |
Mustard seed, salseed |
| 1207.99 |
223.8 |
Niger seed |
| 1209.91 |
223.8 |
Vegetable seed |
| 1515.90 |
424.9 |
Bran oil, salseed oil |
| 1516.20 |
431.2 |
vegetables ghee/hydrogeneted fats,
Sugar and Sugar Confectionery Liquid Glucose |
- Food Preparation
| Hs. |
Sitc |
Products |
| 1902.00 |
048.3 |
Noodles and spaghetti |
| 1905.00 |
048.42 |
Biscuits, Confectioneries |
- Beverages
| Hs. |
Sitc |
Products |
| 2202.01 |
111.01 |
Mineral water |
| 2203.00 |
112.3 |
Beer |
| 2208.30 |
112.41 |
Whisky |
| 2208.40 |
112.49 |
Rum |
| 2208.50 |
112.49 |
Gin |
- Feeding Stuffs, Cake and Meals
| Hs. |
Sitc |
Products |
| 2302.20 |
081.21 |
Rice bran |
| 2302.30 |
081.22 |
Wheat bran |
| 2304.00 |
081.31 |
Soyabean oil & meals |
| 2306.00 |
081.34 |
Oil cakes, meals & extraction |
| 2306.90 |
081.39 |
Other cake, meals & extraction (mustard, wheat/rice bran) |
| 2309.00 |
081.99 |
Animal Feeds |
| 3924.00 |
893.99 |
Plastic Household Articles (Plastic Articles) |
- Tobacco & Tobacco Manufctures
| Hs. |
Sitc |
Products |
| 2401.10 |
121.11 |
Tobacco |
| 2402.20 |
122.2 |
Cigarette, bidi |
- Crude Minerals
| Hs. |
Sitc |
Products |
| 2515.00 |
273.12 |
Marbels |
| 2516.90 |
273.13 |
Stones, boulders |
| 2517.10 |
273.4 |
Gravel, pebbles and aggregates |
| 2519.10 |
278.24 |
Magnesite (DBM) |
| 2526.00 |
278.93 |
Talc, soapstone |
- Animal and Vegetable Products
| Hs. |
Sitc |
Products |
| 0502.10 |
291.92 |
Bristle |
| 1211.00 |
292.4 |
Medicinal herbs (root, bark, flower, leave, seed etc.) |
| 1302.00 |
292.91 |
Herbal and plant extract |
| 1211.90 |
292.5 |
Lynden nut |
| 3805.10 |
292.2 |
Turpentine oil |
| 3806.00 |
292.2 |
Rosin |
| 3203.00 |
292.91 |
Catechu |
- Essential Oils and Perfumery Products
| Hs. |
Sitc |
Products |
| 3301.00 |
551.3 |
Essential oils (Ginger, cinnamon garlic, citronella, palmarosa, lemon grass, mentha etc.) |
| 3304.00 |
553.0 |
Face creame |
| 3306.90 |
553.0 |
Toothpaste (paste & powder) |
| 3307.41 |
553.0 |
Incense stick (agarbatti) |
| 3401.00 |
554.1 |
Soaps |
- Abumin Substances, Modified Starches, Glues, Enzymes
| Hs. |
Sitc |
Products |
| 3506.00 |
|
Synthetic adhesive |
- Miscellaneous Chemical Products
| Hs. |
Sitc |
Products |
| 3808.00 |
591.1 |
Insectisides |
- Plastic and Articles Thereof
| Hs. |
Sitc |
Products |
| 3917.00 |
893.99 |
PVC and Polythene Pipe |
- Leather, Leather Manufatures
| Hs. |
Sitc |
Products |
| 4104.21 |
611.4 |
Leather (buffalo & cow, also including sole, lining etc.) |
| 4106.00 |
611.61 |
Leather (goat, sheep skin) semi-tanned and tanned |
| 4203.00 |
612.1 |
Leather glove & apparels |
| 4403.00 |
851.02 |
Leather footwear |
- Rubber Manufacture
| Hs. |
Sitc |
Products |
| 4011.00 |
625.10 |
Rubber tyre (Including Bicycle) |
| 4013.00 |
625.91 |
Inner ruber tubes |
- Wood Manufactures
| Hs. |
Sitc |
Products |
| 4412.00 |
634.2 |
Plywood |
| 4418.30 |
635.3 |
Wooden parquet |
| 4420.10 |
635.49 |
Wooden statues, articles and ornamental products |
| 4419.00 |
635.42 |
Wooden household and kitchen articles |
| 4427.00 |
635.49 |
Wood works, carving etc. |
| 4602.00 |
899.71 |
Basketworks |
- Pulp and Waste Products
| Hs. |
Sitc |
Products |
| 4701.00 |
251.92 |
Pulp (from bamboo grass, straw, vegetables fibers, waste paper etc.) |
- Papers, Board and Manufactures
| Hs. |
Sitc |
Products |
| 4802.10 |
641.21 |
Handmade Nepali paper |
| 4807.91 |
641.59 |
Straw board |
| 9421.10 |
642.89 |
Paper art works |
- Mineral Products
| Hs. |
Sitc |
Products |
| 6802.00 |
273.12 |
Marbel tiles/slabs |
| 6810.00 |
662.41 |
Bricks/Tiles |
| 6912.00 |
666.5 |
Clay artware (terracotta), Ceramics |
| 7104.00 |
667.3 |
Precious and semi precious stones (garnets, tourmaline, quartz, crystals etc.) |
- Base Metal and Articles of Base Metal
| Hs. |
Sitc |
Products |
| 7210.00 |
|
Corrugated Sheets |
| 7214.00 |
691.10 |
Iron Rod |
| 7217.00 |
691.51 |
GI Wire |
- Metal Manufactures, Including Handicrafts
| Hs. |
Sitc |
Products |
| 7310.00 |
|
Tin Containers (Cans) |
| 7323.93 |
697.41 |
Stainless steel articles (kitchen ware & household articles) |
| 8211.91 |
696.08 |
Gorkha Knives (khukuri) |
| 8306.10 |
697.82 |
Metal figures, statues & sculptors |
| 8306.21 |
697.82 |
Filigree articles (studded art works) |
- Power Generating Sets and Accessories
| Hs. |
Sitc |
Products |
| 8410.11 |
718.81 |
Water turbines |
| 8504.32 |
771.18 |
Micro transformer |
| 8541.40 |
776.3 |
Solar power equipment |
| 8544.00 |
773.1 |
Insulsted Cable |
- Furniture and Parts
| Hs. |
Sitc |
Products |
| 9401.00 |
821.22 |
Foam |
| 9403.80 |
821.11 |
Furniture, bamboo & cane products |
- Fibers, Yarns & Textiles
| Hs. |
Sitc |
Products |
| 5002.00 |
261.3 |
Raw silk |
| 5106.00 |
651.2 |
Wollen yarn |
| 5205.00 |
651.3 |
Cotton yarn |
| 5208.00 |
652.14 |
Handloom cloth (cotton) |
| 5402.00 |
651.4 |
Synthetic yarn |
| 5512.00 |
653.15 |
Synthetic textiles |
| 5607.10 |
657.51 |
Jute twine/yarn |
| 5701.10 |
659.21 |
Handknotted carpets (wollen) |
| 5702.31 |
659.42 |
Woolen carpets, floor covering (woven) |
| 5703.00 |
264.00 |
Raw jute (including cuttings, caddies, & waste) |
| 5710.90 |
654.5 |
Jute hassian/fabrics |
| 5802.20 |
652.22 |
Terry Towel |
| 6305.10 |
658.1 |
Jute bags |
- Apparels & Clothing Accessories
| Hs. |
Sitc |
Products |
| 6110.10 |
845.11 |
Knitwear (pullover, cardigan etc.) |
| 6115.00 |
|
Socks |
| 6211.00 |
845.00 |
Readymade garment (all types) |
| 6214.20 |
845.91 |
Wollen/pashmina muffler, scarves & shawls |
| 6505.90 |
848.43 |
Caps, hats |
- Non Apparel Textile Articles
| Hs. |
Sitc |
Products |
| 6302.21 |
658.41 |
Bed sheet, linen (cotton) |
| 6302.40 |
658.44 |
Table linen |
| 6302.60 |
658.98 |
Kitchen linen |
| 6304.00 |
269.01 |
Textile based interior furnishing articles |
| 6305.20 |
658.21 |
Tent & tarpaulins |
- Miscellaneous Manufactured Articles Including Books & Giftware
| Hs. |
Sitc |
Products |
| 4901.00 |
892.11 |
Books, broucher, printed matter |
| 4909.00 |
892.42 |
Picture postcard, greeting cards |
| 4910.00 |
892.84 |
Calenders (of any kinds) |
| 4911.91 |
892.89 |
Pictures, photographs and posters |
| 6405.00 |
851.04 |
Footwear (nepali shoes and sandals) |
| 7113.11 |
897.5 |
Silver jewelry |
| 7117.00 |
897.2 |
Imitation jewelry |
| 9501.00 |
894.23 |
Toys |
| 9502.10 |
894.22 |
Dolls |
| 9603.00 |
893.2 |
Tooth Brush |
| 9608.00 |
852.21 |
Ball Piont Pens |
| 9606.29 |
899.83 |
Button |
| 9701.00 |
896.01 |
Paintings (thanka, maithili arts etc.) |
| 9704.00 |
892.83 |
Postage stamps |
- Nepal's Exports to SAARC Member Countries
| FY 1998/99 and 2000/01 |
Value in '000 Rs. |
| Direction |
F.Y 1998/99 2055/56 |
% in Total |
F.Y 1999/00 2056/57 |
% in Total |
F.Y 2000/01 2057/58 |
% in Total |
| India |
12,530,700 |
90.3 |
21,220,700 |
99.2 |
27,304,100 |
97.9 |
| Bangladesh |
1,296,282 |
9.3 |
127,554 |
0.6 |
520,703 |
1.9 |
| Bhutan |
24,349 |
0.2 |
41,807 |
0.2 |
24,686 |
0.1 |
| Maldives |
- |
0.0 |
225 |
0.0 |
- |
0.0 |
| Pakistan |
21,933 |
0.2 |
5,857 |
0.0 |
20,946 |
0.1 |
| Sri Lanka |
3,187 |
0.0 |
306 |
0.0 |
8 |
0.0 |
| Total |
13,876,450 |
100.0 |
21,396,449 |
100.0 |
27,870,443 |
100.0 |
| Total Exports |
35,269,272 |
|
49,561,028 |
|
56,519,800 |
|
| % in Total Exports |
39.3 |
|
43.2 |
|
49.3 |
Note: - Trade with India for the F.Y.1998/99 and 1999/2000 are revised and 2000/2001 is provisional.
Source: - Nepal Rastra Bank, Trade Promotion Centre, and Export Directory of Nepal 2002 FNCCI
Foreign Investment and One-window Policy 1992
- Objective:
- To build a strong and dynamic economy by generating additional opportunities for income and employment
through expanding productive activities.
- To increase the participation of the private sector in the process of Industrialization.
- To increase productivity by mobilizing internal resources and materials in productive sectors and by
importing foreign capital, modern technology management and technical skills.
- To increase the competitiveness of Nepalese industries in internal markets.
- Forms of Foreign Investment:
- Equity investment made by foreign investors in the form of foreign currencies of capital assets and
reinvestment of the income therefrom.
- Loans obtained in the form of foreign currencies of capital assets.
- Use of rights, specialization, formulae processes and patents relating to any technology of foreign
origin.
- Use of foreign owned trademarks, goodwill.
- Use of foreign technical, consultancy, management and marketing services.
- Permission for Industries to be established under Foreign Investment:
- Foreign investment in the industries classified as prohibitive shall not be permitted. In case of other
industries, permission for foreign investment should be obtained.
- Foreign investment will be permitted up to 100% in large and medium scale industries.
- Permission may be granted for the transfer of technology in cottage and small industries.
- Provision for Repatriation:
Foreign investors who have received permission to invest in convertible currency can be repatriate the following
amounts outside Nepal at the prevailing rate of exchange.
- The amount received by sale of the whole or any part of the equity investment.
- The amount received as benefits or dividends from foreign investment.
- The amount received as payment of principle and interest on foreign loans.
- The amount received under an agreement for the transfer of technology.
- The amount received as compensation for the acquisition of any property.
- Foreign experts, working in Nepalese Industries with prior approval from countries where convertible
currencies are in circulation, shall be permitted to repatriate in convertible currency up to 75% of the
amount received by them as salaries, allowances, etc.
- Facilities and Concession:
The following facilities will be granted to industries established with foreign investment, without prejudice, to
avail the additional facilities if any, available under the Industrial Enterprises Act.
- Interest income on foreign loans will be taxed at a rate of 15% only.
- Royalties, technical and management fees will be taxed at a rate of 15% only.
- No income tax will be levied on the income earned from exports.
- Industries established with foreign investment are entitled to enjoy all the facilities and incentives
including income tax facilities provided to local investment under the Industrial Enterprises Act.
- Other Facilities:
- Facilities on Electricity-industries will be given priority in the supply of electricity. No fee will
be charged if any industry generates electricity for its own use.
- Relief from Double taxation- For the purpose of avoiding double taxation on incomes of foreign
investors, HMG will take necessary action to conclude agreements for the avoidance of double taxation with
the countries of the concerned foreign investors.
- Custom duty, excise duty and sales taxes levied on raw materials and auxiliary raw materials of export
oriented industries will be reimbursed to the exporters on the basis of the quantum of exports with 60 days
from the receipt of the application for such reimbursement.
- Industries exporting 90% or more of its total production are entitled to enjoy the same facilities
provided to industries established in the Export Processing Zone. The bonded warehouse facilities will also
be continued.
- In case an industry sells its product within the country in foreign currency, the excise duty levied on
the quantity of sold and the custom duty, excise and sales taxes levied on the raw materials used in such
products shall be reimbursed to such industry within 60 days upon the receipt of application for such
reimbursement.
- Custom duty, excise tax and sales tax levied on the production of intermediate goods used in the
production of exportable goods and sales tax levied on the production shall be reimbursed to the exporter
on the basis of the quantity of goods exported within 60 days from the receipt of the application for such
reimbursement.
- Priority will be given to arrange infrastructure facilities required for the establishment of
industries.
- Government land and land within the Industrial districts will be made available to industries for the
establishment of industries on a priority basis.
- No intervention will be made in fixing prices of the products of any industry.
- No taxes will be levied on machinery and equipment, raw materials and finished exportable products of
industries established within the Export Processing Zone.
- Visa arrangement:
- A non-profit visa will be granted to a foreigner investor or his authorized representative as well as
their dependents to stay in Nepal for the period during which a foreign investor maintains his/her
investment.
- A non-tourist visa up to six months will be granted to any foreign investor who has come to Nepal to
undertake research and study with the purpose of investing in Nepal.
- If any foreign investor makes a lump sum investment equivalent to more than US$ 200,000 in convertible
currency, the investor and his/her dependents will be granted permanent resident visa for the period he/she
maintains his/her investment in the industry.
- Industries not to be nationalized:
No industries will be nationalized.
- Arbitration:
- If the foreign investor, the concerned industry and the Department of industry fail to settle among
themselves any disputes concerning foreign investment, it will be settled by arbitration.
- Arbitration will be held according to the prevalent arbitration rules of the United Nations Commission
for International Trade Law (UNICITRAL).
- The arbitration will be held in Kathmandu.
- Arrangements relating to the One-window System:
The following arrangements will be made to provide services through a one-window system to the industries operating
under foreign investment.
- Permission and Registration- In order to provide in quick effective way the approval, facilities and
other administrative service to be established under foreign investment or technology transfer agreements
and in order to establish effective co-ordination among various agencies, the Department of Industry will
be designated as one window servicing agency with the Industrial Promotion Board as a focal point as a
spelt out in the Industrial Enterprises Act.
- A one-window committee will be formed to provide infrastructure facilities such as registration, land,
electricity, water and facilities on taxation, etc. under a one-window system for industries to be
established with foreign investment.
- The Department of Industry will inform the applicant of the decision of the Board on a foreign
investment project within 30 days form the receipt of the application.
- The facilities and concession to which the industry is entitled to will be specified in the letter
granting approval.
- Application for the registration of an industry should be submitted to the Department of Industry
within 35 days from the date of receipt of approval for foreign investment. The industry will be registered
within 21 days from the date of receipt of the application.
- Other Arrangements:
Industries established under this policy will continue to enjoy all time bound facilities to which they are
entitled even in any subsequent change in this policy.
Industries prohibited for grant of approval under foreign investment.
- Defense related industries which produce items like military armaments, ammunition and explosives.
- Cigarettes and Bidi.
- Alcohol (Excluding 100% export oriented)
- List Of Industries Not To Be Granted Permission For Making Foreign Investment
- Clause (a)
- Cottage industries
- Personal service (such as hair-cutting, beauty parlour, tailoring and driving training etc.)
- Arms and Ammunition industries.
- Explosive, gunpowder.
- Industries related to Radio active materials.
- Real Estate business (except construction industries).
- Motion picture business (produced in national languages and the languages of the nation).
- Security printing.
- Currencies and coinage business.
- Clause (b)
- Retail business.
- Travel agency.
- Trekking agency.
- Water rafting.
- Pony trekking.
- Horse-riding.
- Cigarette, bidi (tobacco), Alcohol (excluding those exporting more than 90% percent).
- Internal courier service.
- Atomic energy.
- Tourist lodging.
- 11. Poultry farming.
- Fisheries.
- Bee-keeping.
- Consultancy services, such as management, accounting engineering and legal services.
Source: Export Directory of Nepal
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