NRB Approval Not Mandatory For Bringing Foreign Investment

February 10, 2021 | Investopaper

The approval of Nepal Rastra Bank is no longer required to bring in foreign currency for the registration, feasibility study and pre-operating expenses of companies and industries to be established with foreign investment. NRB has unveiled the draft of ‘Foreign Investment and Foreign Debt Management Regulation 2077’ on Sunday, facilitating the inflow of foreign investment, and has called for necessary suggestions.

As mentioned in the draft, a provision has been made to deposit foreign currency in the bank account of the representative in Nepal for feasibility study and pre-operational expenses. Also, only two percent of the paid-up capital of the company and industry to be established with foreign investment can be sent as pre-operating expenses. This provision is being made to facilitate the inflow of foreign investment.

The approval of NRB will not be mandatory after getting approval from the concerned body to bring in foreign investment. Provision has been made in the draft for the concerned bank to provide the information of the remitted amount to the NRB. Banks and financial institutions will be able to deposit the amount of foreign investment in Nepal in the account of the concerned company and industry. 

NRB has also made some facilitation in foreign exchange to repatriate foreign investment. Once the preliminary draft is passed and implemented by the central bank, the companies approved by the Department of Industry will be able to send foreign loans directly to Nepal.

The draft stipulates that there should be an agreement between the companies, department of industry, and foreign investors to bring foreign loans to Nepal without the approval of the Central Bank. The company bringing the foreign loan to Nepal has to submit the industry registration, tax payment certificate, non-blacklist certificate, and the basis for repaying the loan to the Department of Industry.

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