Executive Summary of Foreign Investment and Technology Transfer Regulation, 2021 (2077)

Executive Summary of Foreign Investment and Technology Transfer Regulation, 2021 (2077)

The Government of Nepal exercising the rights granted by Section 51 of the Foreign Investment and Technology Transfer Act, 2019 (2075) made this regulation. The major highlights are:

  1. Who are eligible to make foreign investments in Nepal? Any foreign individual, firm, company, Non-resident Nepali or foreign government or international agency or other corporate body of similar nature.
  2. What are the types of Foreign Investment?
    – Share investment in foreign currency
    – Re-investment in an industry of dividends derived from foreign currency or shares
    – Lease investment
    – Investment made in venture capital fund
    – Investment made in listed securities through secondary securities market
    – Investment made by purchasing shares or assets of a company incorporated in Nepal
    – Investment received through the banking channel after issuing securities in a foreign capital market by an – Industry or company incorporated in Nepal
    – Investment made through technology transfer
    – Investment maintained by establishing and expanding an industry in Nepal.
  3. How to make Foreign Investment in Nepal? The Foreign Investor may make foreign investments by purchasing assets or 100 percent shares of the industry established in Nepal except the restricted industry. The Foreign Investor may make lease investment in the aircraft, ship, machinery, appliances, construction equipment or other similar.
  1. What are the industries or businesses restricted for foreign investments?
Industries Restricted for Foreign Investment
S.N. Types of Industry

1

Poultry farming, fisheries, bee-keeping, fruits, vegetables, oil seeds, pulse seeds, milk industry and other sectors of primary agro-production

2

Cottage and small industries

3

Personal service business (hair cutting, tailoring, driving etc.)
4 Industries manufacturing arms, ammunition, bullets and shell, gunpowder or explosives, and nuclear, biological and chemical (N.B.C.) weapons; industries producing atomic energy and radio-active materials

5

Real estate business (excluding construction industries), retail business, internal courier service, local catering service, moneychanger, remittance service

6

Travel agency, guide involved in tourism, trekking and mountaineering guide, rural tourism including home stay

7

Business of mass communication media (newspaper, radio, television and online news) and motion picture of national language

8

Management, account, engineering, legal consultancy service and language training, music training, computer training

9

Consultancy services having foreign investment of more than fifty-one percent
  1. Royalty Amount: The royalty amount or other fees related to the technology transfer for the preparation of the industry’s operation shall be based upon the agreement entered in between two parties.
  2. How to establish a Branch Industry? If any industry established in a foreign country is willing to establish or expand its branch industry in Nepal, then it has to be approved as a foreign investment and it shall be registered or extended as a branch industry by incorporating an industry.
  3. How to make an application? Any foreign investor willing to invest in any industry shall submit an application before the authority approving the foreign investment. Electronic submission may be made.
  4. What are the documents required? The following details and the documents are required:
S.N. Documents Copies

1

Project Proposal including Action Plan of the investment 2 copies

2

In case of more than one investor, a joint investment agreement between them 2 copies

3

Where the foreign investor is a natural person, a copy of passport and personal details (Biodata) of that person 1 copy

4

Where the foreign investor is a company, a certificate of registration of incorporation that company in the related country, Memorandum of Association, Articles of Association, documents that reflects Director and Shareholders, company’s profile and the decision of the Board of Directors of the company regarding the investment in Nepal 1 copy

5

Where the foreign investor is a firm, then the certificate of registration of incorporation of that firm and in the case of partnership, the document reflecting partnership details and the decision of the partners regarding the investment in Nepal and profile of the firm 1 copy

6

Where the foreign investor is a foreign citizen of Nepali Origin or Nepali citizen residing in a foreign country, the document proving the same. 1 copy

7

Where the foreign investor is an international organization, a constitution of the  organization, document revealing the identity of the directors, profile of the organization and an organizational decision regarding the investment in Nepal 1 copy

8

If the foreign investor is not able to attend, a copy of power of attorney given by them and the document revealing the identity of an Attorney 1 copy

9

Financial Creditability Certificate of a foreign investor issued by the related foreign bank. 1 copy

10

Any other details and documents requested pursuant to a decision by the authority approving the foreign investment 1 copy
  1. What is the required time-limit? Within 7 days. If rejected, rejection notice shall be given no later than 7 days after the date of decision.
  2. Time schedule for Foreign Investment: The foreign investor getting an approval for the foreign investment has to bring in the following foreign investment within one year after the date of such approval:
Category of Foreign Investor Investment Amount Percentage of Investment
Foreign investor Minimum Amount (USD) At least 25% amount
Ordinary Foreign Investor above the minimum required amount and up to 250,000,000 rupees At least 15% amount
Distinguished Foreign Investor above 250,000,000 rupees and up to 1,000,000,000 At least 10% amount
Highly Distinguished Foreign Investor above 1,000,000,000 At least 5% amount
  • The foreign investor shall bring in at least 70% of the approved investment before the commencement of an industrial production or operation of the industry or enterprise of their investment.
  • The remaining 30% shall be invested within 2 years after the commencement of an industrial production or operation of such industry or enterprise.
  • Any foreign investor making an investment by purchasing the shares of any industry in operation shall bring in such foreign investments within a year of the approval of the foreign investment.
  • The industry with an approval of a foreign investment and which is in operation during the enactment of this regulation if unable to bring in investment, shall get an approval and bring in foreign investment within six months.

What happens in case of Share Sale or Transfer of Title to Share? If the property, assets or share or any other financial equipment accumulated out of foreign investments by any company in Nepal, is for sale, transfer of title or change in the ownership or vested ownership of the structure, then in order to maintain record of the details at the authority approving the foreign investment, such company shall submit within 30 days after the date of operation an application along with the following details and documents:-

  1. A copy of an agreement relating to the company’s property or asset or Share Sale and Purchase Agreement and a certified document that reveals the transaction of the above,
  2. A document certified by an Auditor that reveals the share value of the company and a copy of Audit Report,
  3. In the case of repatriation out of Share Sale and Purchase or Transfer of title of the company, any work schedule,
  4. Any evidence showing that the company has paid-up tax and liability to the Government of Nepal as per the prevailing law of Nepal,
  5. Updated Share Log Book of such company situated in Nepal.

Repatriation: Any foreign investor has to submit an application to repatriate their foreign investment with the following documents:-

S.N. Documents

1

The decision of the General Meeting and Board of Directors of the Company relating to the repatriation of the investment by the foreign investors or earnings out of such investments

2

Share Log Book and Directors’ Log Book verified by the Office of the Company Registrar

3

Company’s previous fiscal year Audit Report and Certificate of Tax Clearance

4

Proof showing the foreign investment by the concerned investor

5

In case of the amount received out of Share Sale of the foreign investment, a copy of the approval letter of the Share Sale and a copy of approved Share Sale and Purchase Agreement

6

Profit from the foreign investment or dividend amount,  a decision of the General Meeting of the Company regarding such distribution, a proof of distribution of bonus as per the prevailing law and the Audit Report of that fiscal year

7

In the case of payment of the Lease Investment pursuant to the Lease Agreement, the related documents

8

In the case of payment of damage or compensation amount pursuant to final decision regarding the case filed in Nepal, Arbitration or any other legal proceedings, the related documents

9

In the case of royalty amount, the related documents

10

Proof of the record of the detail of sale of earned property in Nepal or transfer of title

11

Any other essential documents required by the authority approving the foreign investment.

How can you get a Visa Facility?

Types of Visa Eligibility Documents Required
Business Visa The foreign investor or his/her authorized representative and the family members or his/her authorized representative of such investor

·            If the foreign investor having an approval up to or above 100,000,000 rupees has already brought in 25% of the approved investment

1)      A copy of foreign investment approval letter/ Industry Registration Certificate,

2)      A copy of the passport of the person requesting for visa,

3)      In case of an authorized representative, a letter authorizing representation for the foreign investor,

4)      In case of a family member of  the foreign investor,  a certificate of relationship with the dependents issued by an authorized entity of related country, the Embassy of Nepal or diplomatic mission in such country,

5)      In case of Non-tourist visa, a copy of the executive committee and Labor approval as per the prevailing law.

6)      Power of Attorney, Identity Card, Contact Number of a person with an authority or an authorized person.

Can you acquire land above the land ceiling? Yes. The energy, manufacturing, infrastructure, and minerals based industries with a foreign investment approval can submit an application for the coordination and facilitation to purchase land or any land above the land ceiling. The following details and documents are required:-

  1. A copy of foreign investment approval letter,
  2. A copy of Industry Registration Certificate,
  3. Approved Project Proposal of the industry,
  4. Areas and Location of the land required for the industry,
  5. In case if approval is required, an approval letter from any other authority,
  6. Commitment letter endorsing all the necessary expenses for land acquisition,
  7. Reasons for the industry being unable to purchase or acquire land.

Validity Period of Foreign Investment Approval: The validity period of the foreign investment approval shall remain in effect except in situations where the foreign investment approval becomes ipso facto ineffective or the foreign investment becomes void.

Investment out of Earned Profit: The industry with the foreign investment may make re-investments in the same industry or in any other industry opened for foreign investment, out of earned profits. In the same industry, the investment shall not be less than 10% of the minimum required investment, and in the case of other industries, it shall not be less than the minimum required investment.

Limitation on Repatriation of Royalty Amount or other Fee

A. Limitation on Royalty Amount or other Fee for all kinds of technology transfer of industry.

Royalty In relation to Quantity Sold within Nepal In relation to Quantity of  Foreign Export
If Lump sum Amount or total sale amount Up to 5% of the total sale amount excluding tax Up to 10% of the total sale amount excluding tax
If Royalty out of net profit Up to  15% of net profit Up to 20% of net profit

 

B. Limitation on Royalty Amount or other fee for the use of trademark

In relation to Quantity Sold within Nepal In relation to Quantity of  Foreign Export
In case of industry relating to the alcohol and tobacco, up to 2% of the total sale amount excluding tax. In case of industry relating to the alcohol and tobacco, up to 5% of the total sale amount excluding tax.
In case of other industry, up to 3% of the total sale amount excluding tax. In case of other industry, up to 6% of the total sale amount excluding tax.

Disclaimer: The information published on this website is for general information purposes only, and shall not be construed as a solicitation or an offer for an attorney-client relationship.  No one should act or rely upon any information or response to a request for information automatically generated as a result of electronic searches on this website. Chintan Law Associates assumes no liability for such use or interpretation of the subject-matter.

Copyright Laws in Nepal – 3 Mins Exclusive Read

Copyright Laws in Nepal – 3 Mins Exclusive Read

Copyright Laws in Nepal/Register Copyright in Nepal

  1. Definition

Copyright is the right that is provided to the original creator for the protection of the expression of their ideas. The governing laws are Copyright Act, 2002 and Copyright Rules, 2004. The rights provided to the original creator or author is economic and moral right.

2. Work and its scope protected under the Copyright Act and Rules

Under copyright law, “Work” means any work presented originally and intellectually in the field of literature, art and science and in any other field, and includes the following work:

  1. Book, Pamphlet, Article, Thesis
  2. Drama, Dramatic Music, Dumb Show or work prepared to perform
  3. Musical Notation with or without words
  4. Audio Visual Works
  5. Architectural Design
  6. Fine Arts, Painting, Work of Sculpture, Work of Woodcarving
  7. Photographic Work
  8. Work of applied Art
  9. Illustration, Map, plan, Three Dimensional Work relating to Geography and Scientific Article, and Work
  10. Computer Program.
  • Any thought, religion, news, method of operation, concept, principle, court judgment, administrative decision, folksong, folktale, proverb and general data are not protected.
  • Registration of Work is not compulsory to acquire any right of protection granted by the law. However, these items can be registered voluntarily by submitting an application to the Nepal Copyright Registrar’s Office.
  • Any joint Work carried out in the initiation or direction of any person, and any Work carried out on the payment of remuneration shall be protected until 50 years from the date of the first publication of such Work or the date in Work is made public (whichever date is earlier)

3. Economic Rights under Copyright

The following 11 Economic Rights are granted by the laws to the owner of copyright who have the “exclusive right” to carry out the following acts, and such rights may be transferred under a written agreement:

S.N

Economic Rights

1. To reproduce Work
2. To translate Work
3. To revise or amend Work
4. To make arrangement and other transformation in the Work
5. To sell, distribute or rent the original and copy of the Work for the general public
7. To import copies of Work
8. To have public exhibition of the original or copy of the Work
9. To perform the Work in public
10. To broadcast the Work
11. To communicate the Work to the general public.

Note: The economic rights cover the right to derive economic benefit whereas the moral right is granted whether or not the economic right is granted. Moral right is non-transferrable.

4. Owner of the Work having the ‘Economic Right’

Nature of Work

Owner

In case of Single Work Original Author is the first owner of the Economic Right of the Work
In case of Joint Work Co-Author

–          But if the work is carried out in different parts and each author is identified for their case then respective author for their work

Work carried out on the payment of remuneration by any person or organization The person or organization that pays the remuneration
Work carried out in the initiation or direction of any person or organization The person or organization that initiates

5. Grounds to use Copyrighted materials without the authorization of the Author

  1. One can reproduce some portion of the materials for personal use.
  2. Reproduction of some portion for teaching and learning process.
  3. One copy of materials can be used for public Library and Archives.
  4. Reproduction, broadcast, and other communication are allowed for general public information.
  5. One copy of any work can be imported for personal purpose.
  6. One can use for the public display but public display has not to be made without the help of the film, slide, television, image or otherwise using the screen or device.

Note:

  • One can use the copyright materials by citation.
  • One cannot use the materials for the economic benefit.

6. Registration Process of Copyright in Nepal

  • Application to the registrar.
  • Examination of the application and order to the applicant for the further document if necessary.
  • Certificate of Registration within 35 days from the date of application filed if further document is not needed and if further document are ordered then 35 days from the document submitted.

7. Grounds for Infringement and Punishment of Copyright in Nepal

S.N. Grounds for Infringement

Punishment

1. To reproduce copies of a Work and sell and distribute them or publicly communicate or rent them with commercial or any other motive with or without deriving economic benefits without authorization of the author or the copyright owner or by infringing the terms contained in the agreement or license  –          fine of 10,000 upto 100,000 rupees or with imprisonment for a term of not exceeding six months or both.

–          Fine of a 20,000 to 200,000 rupees or with imprisonment for a term not exceeding one year or with both for each instance from the second time.

–          The materials so published or reproduced or distributed or devices used to reproduce such materials shall be seized.

2. To do advertisement or publicize by copying a Work belonging to another person with a motive of taking advantage of the reputation gained by that work,
3. To make Work of another subject or nature by changing the form and language of a work belonging to another person with a motive of deriving economic benefit

Disclaimer: The information published on this website is for general information purposes only, and shall not be construed as a solicitation or an offer for an attorney-client relationship.  No one should act or rely upon any information or response to a request for information automatically generated as a result of electronic searches on this website. Chintan Law Associates assumes no liability for such use or interpretation of the subject-matter.

 

Divorce in Nepal, Partition of Property in Nepal and Child Custody in Nepal – 3 Mins Exclusive Read

Divorce in Nepal, Partition of Property in Nepal and Child Custody in Nepal – 3 Mins Exclusive Read

Divorce in Nepal, Partition of Property/Child Custody in Nepal

Divorce is the legal dissolution of the marriage which is carried out by the court that leads to the separation of husband and wife. Divorce can be carried out at anytime given the willingness of both the husband and wife.

The issue of property right and custody of child occurs during and after the divorce. Hence, the following are the provisions relating to property rights during or after the divorce. 

Which property has to be partitioned?

  • Joint property in the name of both husband and wife or in the name of anyone.

What if the husband has not taken the partition of property from his father?

  • If the husband has not taken the partition of property from his father, in that condition the court asks for the inventory of the property from both sides and will do partition of property.
  • If it takes a long time for partition of property then in that condition, on the basis of the property and income of the husband, the wife will get the monthly expenses.

What if the wife is unwilling for the partition of the property?

  • If the wife is willing to have the lump sum amount or annual or monthly amount instead of the property then the court shall decide on the basis of income of the husband.

What if the husband does not have any kind of property?

  • If the husband doesn’t have any property but has an income then in that condition the court will ask the husband to pay expenses on the basis of his income.
  • The income or partition of property is based on mutual written consensus. Provided that, it is inapplicable to the children.

In what conditions the husband is not liable for partition of property or partition of income or both?

  • If the wife conducts remarriage then the husband is not liable for partition of property or partition of income or both.

Child Custody after Divorce

The following are the provisions for the child after the divorce:

Are the children able to get partition of property in case of divorce?

  • Yes, the children have right to receive their part of share from the partition of property.

Are the children born after the divorce considered the child of such previous husband?

  • Children born within 272 days of divorce are only considered as the child of that husband.

Who are responsible to take the responsibility of the children?

  • It is the responsibility of both the parents to look after their children. But in case of divorce:
  • Less than 5 years child- If a women has carried out or not another marriage if she wants to take responsibility
  • Children more than 5 years- Except in the condition that the women has carried out another marriage, responsibility in the mother
  • Except in these two conditions, the responsibility is in the father.
  • If during the time of divorce, if they have made a written consent regarding child then as per that consent paper.
  • If the child has attained the age of 10 years then as per the decision of the child.
  • If one of the partners who take the responsibility dies then the other partner has to take the responsibility of the child. But, in case of child more than 5 years of age then the mother has done remarriage then she is not responsible.

If the consent paper is silent, then it shall be as follows:

  • The responsibility lies in mother in case of a child less than 5 years.
  • The responsibility lies in father in case of a child of age 5 years or more than that but not less than 10 years.
  • The responsibility is as per the decision of the child if the age is more than 10 years.

Disclaimer: The information published on this website is for general information purposes only, and shall not be construed as a solicitation or an offer for an attorney-client relationship.  No one should act or rely upon any information or response to a request for information automatically generated as a result of electronic searches on this website. Chintan Law Associates assumes no liability for such use or interpretation of the subject-matter.

 

 

 

 

 

 

Project Approval Conditions/Requirements – Social Welfare Council – 3 Mins Exclusive Read

Project Approval Conditions/Requirements – Social Welfare Council – 3 Mins Exclusive Read

Project Approval Conditions/Requirements – Social Welfare Council

All the non-profit organizations or NGOs willing to obtain approval from the Social Welfare Council for a project must satisfy the following conditions (requirements). All such organizations must obtain prior approval from the SWC before receiving grants or donations from the foreign donors.

  • Shall follow the provision mentioned in the Social Welfare Act, Regulation and Directives.
  • Project shall not be operated with the activities prohibited by the prevailing law.
  • Project shall not be operated by receiving fund out of the prescribed amount allocated by the international non-governmental social organization working under the agreement with the Council.
  • While submitting an application for the approval without any Project Approval, the local level’s monitoring/ supervision/ work completion report/ recommendation or action consent letter must be submitted.
  • Foreign Aid shall only be received in a way that is not contrary to the Anti-Money Laundering Act.
  • If any further clarification is required in the Project Proposal submitted to the Council, the planning section shall ask the organization to present the project and proceed with the approval process with necessary modifications.
  • Prior to the expenditure of the funds received by the organization pursuant to Social Welfare Act, it has to be spent only with the approval of the Council.
  • The organization shall have to make and implement regulations relating to administration and finance.
  • The organization shall comply with the institutional and project related court orders, government decisions and suggestions out of the investigation report, if any.
  • The provisions relating to purchase/maintenance of house, land and property shall be incorporated in the Constitution or Regulations of the organization.
  • The physical property purchased with the foreign aid shall not be sold or title be transferred without the approval of the Council. The approved past project shall be monitored and evaluated, and the action plan regarding the implementation of the suggestions mentioned in the report shall be made and submitted.
  • The coordination shall be made with the concerned local body while selecting the target group to be included in the project.
  • Foreign grants received for the project shall be included in the data of the Government of Nepal Ministry of Finance.
  • The project completion certificate shall be obtained from the local body after the completion of the project.
  • The Council is not obliged to approve the proposal received without fulfilling the above mentioned conditions and procedures.
    Disclaimer: The information published on this website is for general information purposes only, and shall not be construed as a solicitation or an offer for an attorney-client relationship.  No one should act or rely upon any information or response to a request for information automatically generated as a result of electronic searches on this website. Chintan Law Associates assumes no liability for such use or interpretation of the subject-matter.

 

 

Divorce Law in Nepal – 3 Mins Exclusive Read

Divorce Law in Nepal – 3 Mins Exclusive Read

Divorce Law in Nepal
Divorce means a legal dissolution of the marriage, and results in the legal separation of husband and wife.
Divorce between the husband and wife, is connected to various legal issues, and shall be considered together.
For instance, matters relating to property rights, and child custody are major legal issues faced by the husband and wife during the termination process.
The laws and procedures relating to a divorce are:
Who may file for divorce:- Husband OR wife OR Both may file the case before the district court of their jurisdiction.
Grounds for a Husband to file a case:-
S.N.
Grounds
1.    
If the wife lives separately without the consent of husband for 3 consecutive years or more than that.
2.    
 If the wife didn’t provide basic needs to the husband and abandons him from home.
3. 
 If the wife does any work or do any conspiracy that may cause grievous hurt or any other physical or mental harm to the husband.
4.    
If it is proved that the wife is engaged in sexual activities with other people.
Grounds for a Wife to file a case:-
S.N.
Grounds
1.    
If the husband lives separately without the consent of husband for 3 consecutive years or more than that.
2.  
If the husband didn’t provide basic needs to the husband and abandons him from home.
3.    
 If the husband does any work or do any conspiracy that may cause grievous hurt or any other physical or mental harm to the wife.
4.    
If the husband solemnizes another marriage.
5.   
 If it is proved that the husband is engaged in sexual activities with another woman..
6.    
 Marital rape.
Time Required for divorce: The court has to finalize the case of divorce within one year of the application filed.
Procedure that needs to be followed for divorce:
1.     The party who wants to have divorce has to file an application in the district court.
2.     The court through the help of their officials gives notice of application to the other party.
3.     The other party replies the court about his/her decision.
4.     The court then convinces both the parties for mediation.
5.     If mediation fails, the court will rule on divorce.
Things that need to be carried out before divorce:-
  • Partition of property: Partition of common property in the joint name, or any one’s name among husband and wife is to be done, and if it is found that the partition of the property takes long time then the husband has to provide monthly expenses to the wife as per his property and income.
  • However, if the divorce happens due to wife, the husband is not obliged for that.
Condition in which the wife can get lump sum amount rather than Partition of property
The court can order the husband to provide lump sum amount or annually or monthly expenses on the basis of his income if the wife desired so but if the wife conducts another marriage then the husband is not liable to pay.
Documents Required for divorce: The following documents are required along with application for the divorce:
  • Marriage Registration Certificate
  • Notarized copy of citizenship
  • Witnesses
  • Other evidences/documents, if any.
Learn more: https://lawchintan.com/contact-us/
Disclaimer: The information published on this website is for general information purposes only, and shall not be construed as a solicitation or an offer for an attorney-client relationship.
No one should act or rely upon any information or response to a request for information automatically generated as a result of electronic searches on this site.
Chintan Law Associates assumes no liability for such use or interpretation of the subject-matter.