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Facilities & Incentives

Industries established with foreign investment in the form of joint venture or wholly foreign owned units are entitled to get all the facilities and incentives stated in the IEA and the FITTA, the details of which is given in Appendix- 20. The FITTA provides for the various repatriation facilities as mentioned in the earlier chapter..

The facilities and incentives available to the industries have been spelt out in the Section 15 of the Industrial Enterprises Act, 1992. Cottage industries are exempt from sales tax, excise duty and income tax. Moreover, the government can also grant additional facilities to the national priority industries. The procedure for obtaining facilities and incentives stipulated in said Acts are discussed below:

  • Income Tax Exemption
    • Corporate tax shall not exceed 20 percent of profit for industries other than industries manufacturing cigarettes, bidi, cigar, tobacco, alcohol and beer.

      There is a 5% income tax on dividends earned out of investment in any industry. And, export earnings are taxed at 40% of the income tax imposed on other industries. However, the tax amount shall not exceed 0.5% of the total export amount.

  • Income Tax Deduction
    • The Industrial Enterprises Act provides for income tax rebate of 30, 25 and 20 percent for the industries other than cigarette, bidi, alcohol and beer established and operating in remote, undeveloped, underdeveloped areas of the country respectively. In order to enjoy this facility, the concerned industry must submit a certificate showing that it was operational in that particular area during the period.

  • Concessional Rate of Custom Duty
    • Manufacturing industries importing plant, machinery and equipment required for direct production process falling under the chapter 84 of the harmonised custom classification with the duty rate of 5 percent are given 80 percent rebate on the custom duty and full exemption from any sales tax.

  • Excise Duty Rebate and Refund
    • Industries established and operating in the remote, undeveloped and underdeveloped areas, as mentioned in the Appendix-23, are entitled to 35, 25 and 15 percent rebate in the excise duty respectively for a period of ten years from the date of operation. For getting this facility the concerned industry should produce a certificate stating that the industry is operating in the said area during the period.

  • Duty Draw-back
    • Any duty or taxes levied on the raw materials, auxiliary raw materials etc. used for producing goods for export are entitled to get refund of these duty and taxes based on the quantity of export.

  • Bonded warehouse facility
    • The duty drawback facility is available to the industries on the quantities of raw materials imported and used for the production of goods for export. Export oriented industries may obtain the facility of bonded warehouse. The raw materials can be imported just by entering into a passbook without paying any custom duty or sales tax. Those raw materials are deducted from the passbook upon export of finished product. However, the industry must also submit a bank guarantee, which must be sufficient to cover the duties.

  • Opening of Foreign Currency Account
    • Foreigners and companies can open and operate foreign currency account in any of the commercial banks in Nepal. Export oriented industrial companies can also open Foreign Currency Account. Industries incorporated as 100 percent foreign owned or as a joint venture may also open a foreign currency account to deposit the equity share of the foreign party in convertible currency. This can be used only to import equipment and plants as well as other fixed assets necessary for the industry.

Required DocumentsThe application for Duty Draw-back must be submitted within a year of the export date. The application must include the completed form, given in Appendix – 25, along with all the original documents relating to

  • a) Custom declaration form for the import of raw materials (Aayaat Pragyapan Patra)
  • b) Receipt of the duty payment
  • c) Calculation of the raw material uses
  • d) Sales invoice
  • e) Certificate of receipt of payment
  • f) Copy of the agreement with the buyer

The duty draw-back facility is also available if the industry sales its products within Nepal in convertible foreign currency. The duty draw-back facility will not be available if the industry does not apply for the same within a year of the date of export or deemed export.

The industry in order to avail Bonded warehouse facility must apply to the Department of Custom along with the following documents:

  • a) Company registration certificate
  • b) Memorandum and Articles of Association
  • c) Industry registration certificate
  • d) L/C copy for input of raw materials
  • e) Lease contract if the building for industry is on rent and land registration certificate if company owns the land.
  • f) Recommendation from Garment Association if the industry is a garment unit.
  • g) Bank guarantee
 

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Post Registration Requirements

उद्योगको स्थीर पूँजी/क्षमता वृद्धि/उद्देश्य थप

  • अनुसूची दरखास्त फाराम 'ख'
  • उत्पादन विवरण
  • स्वीकृत, तथा थप हुने क्षमता र पूँजीको तुलनात्मक विवरण

विद्युत शक्ति वृद्धि

  • जडित विद्युत शक्तिको प्रमाण स्वीकृत मेशिनरी विवरण
  • जडित विधुत शक्तिको प्रमाण
  • स्वीकृत माशिनेरी विवरण
  • प्रस्ताबित उदेश्य थप विधुत शक्ति

उद्योगको ठाउँसारी

  • निवेदन
  • कम्पनीको साधारण सभाको निर्णय
  • वातावरणीय परिक्षण गर्नु पर्ने उद्योगको हकमा प्रतिवेदन (आवश्यकतानुसार IEE वा EIA)
  • उद्योगको जग्गा, भवन भए सोको प्रमाण पत्र / करारमा लिएको भए करार सम्झौता

उद्योग संचालनको म्याद थप

  • निवेदन
  • उद्योग स्थापना तर्फ भएको प्रगति विवरण र भावी कार्य योजना
  • उद्योग संचालनको पूर्व स्वीकृति पत्र
  • हालसम्म उद्योगमा भएको विवरण

नामसारी

  • विक्री नामा कागजात
  • सनाखत

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Industry Registration

After obtaining approval for foreign investment, the industry is required to be registered with the DOI within 35 days. If the registration cannot be done within the stipulated time, the investor will have to apply for the extension of the validity period.

Required Documents

Required Documents

Once the company is incorporated, the investor has to apply for registration of industry at DOI, filling a prescribed form along with following documents.

  • 1) A copy of the foreign investment approval letter issued by the Foreign Investment Section, DOI.
  • 2) A copy each of the Certificate of Incorporation, Memorandum of Associations, and Article of Association of the company.
  • 3) Environmental Impact Assessment (EIA) Report or Initial Environmental Examination (IEE) Report.

Fees & Deposits

Fees for Registration of Proprietorship Firms

Fixed Capital (in NRs)Fee amount (in NRs)
upto 1,00,000 1000
>1,00,000 and <=3,00,000 3000
>3,00,000 and <=5,00,000 6000
>5,00,000 and <=20,00,000 12000
>20,00,000 and <=1,00,00,000 20000
>1,00,00,000 and <=5,00,00,000 30000
>5,00,00,000 50000

Fees for renewal of proprietorship firms

Fixed Capital (in NRs)Fee amount (in NRs)
upto 1,00,000 600
>1,00,000 and <=3,00,000 1000
>3,00,000 and <=5,00,000 1600
>5,00,000 and <=20,00,000 3000
>20,00,000 and <=1,00,00,000 5000
>1,00,00,000 and <=5,00,00,000 8000
>5,00,00,000 15000

Fees for registration of partnership firms

Fixed Capital (in NRs)Fee amount (in NRs)
upto 1,00,000 600
>1,00,000 and <=3,00,000 2000
>3,00,000 and <=5,00,000 4000
>5,00,000 and <=10,00,000 7000
>10,00,000 and <=50,00,000 10000
>50,00,000 15000

Fees for renewal of partnership firms:

Fixed Capital (in NRs)Fee amount (in NRs)
upto 1,00,000 100
>1,00,000 and <=3,00,000 125
>3,00,000 and <=5,00,000 150
>5,00,000 and <=10,00,000 200
>10,00,000 and <=50,00,000 250
>50,00,000 300

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Required Documents

  • उद्योग दर्ताको लागि आवेदन फाराम “क” (अनुसूची १ मा उल्लेखित नमुना अनुसार)
  • प्रस्तावित उद्योगको परियोजना प्रतिवेदन (स्कीम)

प्रस्तावित उद्योग कम्पनी भएमा

  • कम्पनी दर्ता प्रमाण पत्र,
  • स्वीकृत प्रवन्धपत्र तथा नियमावलीको प्रमाणित प्रतिलिपि ।
  • शेयरधनीहरु नेपाली नागरिक भए नागरिकताको प्रमाणित प्रतिलिपि ।
  • शेयरधनीहरु विदेशी नागरिक भए राहदानीको प्रमाणित प्रतिलिपि र लगानीकर्ताको हालसालैको फोटो सहितको वैयक्तिक विवरण (Bio Data)।
  • विदेशी लगानी भएको उद्योगको हकमा विदेशी लगानी स्वीकृत पत्र, संयुक्त लगानी सम्झौता पत्र (Joint Venture Agreement), Financial Project Proposal र Bank Credibility Letter को प्रमाणित प्रतिलिपि ।

प्रस्तावित उद्योग प्राइभेट फर्म भएमा

  • लगानीकर्ताको नेपाली नागरिकताको प्रमाणित प्रतिलिपि ।
  • अनुसूची ३ मा उल्लेख भए बमोजिम उद्योग दर्ताको लागि तिर्नुपर्ने राजश्व तिरेको सक्कलै रसिद वा बैंक भौचर ।

प्रस्तावित उद्योग साझेदारी फर्म भएमा

  • साझेदारहरुको नेपाली नागरिकताको प्रमाणित प्रतिलिपि ।
  • साझेदारहरु बीच भएको साझेदारी सम्झौता ।
  • उद्योग दर्ताको लागि तिर्नुपर्ने राजश्व तिरेको सक्कलै रसिद वा बैंक भौचर ।
  • अनुमति लिनु पर्ने उद्योगको हकमा सम्बन्धित निकायबाट जारी भएको अनुमति पत्र ।
  • अन्तरराष्ट्रिय सीमारदुरीको पत्र (आवश्यक पर्ने उद्योगको हकमा मात्र) आवश्यकतानुसार कार्य सूची (Terms of Reference), IEE वा EIA प्रतिवेदन र सो का लागि तोकिएका अन्य कागजातहरु ।
  • आवश्यकतानुसार अन्य निकायको सहमतिरस्वीकृति पेश गर्नुपर्नेमा सो को पूर्व स्वीकृति एवं सहमति पत्र ।

जलविद्युत उत्पादन गर्ने उद्योगको हकमा देहाय बमोजिमका थप कागजातहरुः

विद्युत विकास विभागबाट प्राप्त सर्वेक्षण अनुमति पत्र वा विद्युत खरिद सम्झौता (Power Purchase Agreement) वा National Grid Connection Agreement वा विद्युत उत्पादन अनुमति पत्र (Generation License)

Fees for Registration

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Frequently Asked Questions (FAQs)

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