Foreign Investment (FDI) in Hydropower of Nepal
Published on: May 21, 2024
Category: Uncategorized
Foreign Investment (FDI) in Nepal's hydropower sector catalyzes sustainable development by tapping into the country's abundant water resources. It fuels growth, harnessing global capital and expertise to unlock Nepal's hydroelectric potential, providing clean energy and driving economic prosperity.
Description
Foreign Investment in Hydropower Sector of Nepal
Foreign Direct Investment (FDI) has been defined as a cross border investment done by foreign companies in a host country. Nepal has good investment prospects in hydropower, tourism and information technology.
Acts Governing Foreign Investment in Hydropower Sectors of Nepal
· Foreign Investment and Technology Transfer Act 2019 (FITTA)
· Public Foreign Exchange (Regulation) Act 1962 (2019) (“FERA’’)
· Public Private Partnership and Investment Act, 2019( 2075).
Approval to be taken from?
· For capacities less than 200 MW, approval from Department of Electricity Development and the DOI is required.
· For capacity of more than 200 MW or an investment of more than $6 billion , approval from the Nepal Investment Board is required.
Issuance of Shares
There is no any compulsion to issue shares to local people i.e. foreign investors can invest 100%.
Procedures for approval of foreign investment in hydropower sector of Nepal
Step 1: Receive in-principle Approval of Foreign Investment
In principle approval is to be received from DOI/Investment Board (depending on the capacities) for foreign investment in Nepal.This may take approximately 30 days. A refundable amount of approx.. Rs 20,000 is to be deposited .
Step 2:Incorporation of a Company
A company should be incorporated after receiving prior approval for foreign investment as per the prevailing law.Company should be registered in Office of Company Registrar (OCR).
Step 3: Industry Registration
Industry registration is to be done in DOI after company registration.
Step 4:PAN /VAT registration
Company should be registered in PAN /VAT depending upon the transaction in Inland Revenue Department. No fee is applicable for such registration.
Step 4: Business Registration at Local Level
After PAN/ VAT registration, business should be registered in ward office where the registered office is located. Different rates of fee may be applicable depending on the different ward offices.
Step 5:Approval from NRB
To inject the foreign investment amount in Nepal,approval from NRB is to be taken.
Step 6: Hydropower Survey License
An application should be made to Department of Electricity Development to receive the hydropower survey license. For such license different rates of government fee is applicable depending on the capacity of the hydropower project.
Step 7: License to be obtained for generation/ transmission and distribution of electricity from Department of Electricity Development.
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Rabin Dhakal and Associates, Chartered Accountants
Kathmandu, Nepal.
rabindhakalassociates@gmail.com
rdhakalassociates.com
Whatsapp / Viber: +977-9851232718