Introduction
The approval from the Department of Industry (DOI) under the Board of Investment (BOI) in Nepal is required for foreign investment in most sectors. BOI approval is the first step in legally registering a foreign investment company in Nepal. This guide outlines the entire BOI approval process, including eligibility, steps, and compliance needs. This process is regulated by the Foreign Investment and Technology Transfer Act, 2019 (FITTA).
Legal Definition and Purpose
BOI approval refers to the formal consent granted by the Department of Industry on behalf of the Government of Nepal to allow foreign investment in accordance with FITTA 2019. The primary purpose is to regulate and monitor foreign capital inflow, ensure sectoral compliance, and promote secure foreign investment.
Key Requirements for Registration
- Investment must meet the minimum threshold (currently NPR 20 million).
- The business must be in a sector open to foreign investment.
- The foreign investor must provide necessary documentation including a detailed investment proposal.
- Investor must comply with FITTA and the Industrial Enterprises Act.
Eligibility Criteria for Companies/Investors
Foreign individuals, companies, or legal entities intending to invest in Nepal are eligible if:
- The sector is open for foreign investment.
- The investor has the financial capacity to meet the minimum capital requirement.
- The proposed project aligns with national development goals and industrial policies.
- The investor is not blacklisted by any national or international financial institution.
Step-by-Step Registration Procedure
- Prepare investment proposal and documents.
- Submit application to the Department of Industry.
- Review and verification by the Department.
- BOI approval granted with a letter.
- Proceed to company registration at the Office of Company Registrar (OCR).
- Apply for tax registration (PAN/VAT).
- Open bank account and remit foreign capital.
Documents Required for Registration
- Application form for foreign investment
- Investor’s profile and passport copy
- Investment proposal/business plan
- Joint venture agreement (if applicable)
- Power of attorney
- Company incorporation documents (if corporate investor)
- Project report and financial details
Timeline for Registration Completion
- BOI approval: 7 to 21 working days from submission
- OCR company registration: 3 to 7 working days
- PAN registration and bank account setup: 3 to 5 working days Entire process can be completed within 3 to 4 weeks depending on completeness of documents and review timelines.
Cost and Government Fees Breakdown
- BOI application: No government fee
- Company registration: NPR 1,000 to NPR 16,000 based on authorized capital
- PAN registration: Free
- Translation/Notarization/Professional service charges may apply
- Other incidental costs (legal service fees, liaison support)
Compliance and Document Checklist
- Verified application for foreign investment
- Complete investor documents
- Duly prepared investment plan
- Properly translated and notarized documents (if foreign language)
- Sector-specific licenses if required
- Proof of minimum investment amount
Laws Governing the Process
- Foreign Investment and Technology Transfer Act, 2019 (FITTA)
- Industrial Enterprises Act, 2020
- Companies Act, 2006
- Income Tax Act, 2002
- Foreign Exchange Regulation Act, 1962 These laws govern the entry, operation, repatriation, and compliance of foreign investment.
Authorities Involved in Registration
- Department of Industry (DOI)
- Office of Company Registrar (OCR)
- Nepal Rastra Bank (NRB)
- Inland Revenue Office (IRO)
- Department of Foreign Employment (for work permits, if required)
Annual Filing and Tax Compliance
- Annual tax return filing with IRO
- Audited financial statements submission
- BOI compliance reporting (as per approval conditions)
- Renewal of business licenses (if applicable)
- Value Added Tax (VAT) filing if registered
Post-Registration Formalities
- Injection of foreign capital through formal banking channel
- Filing capital verification documents with DOI and NRB
- Setup of physical office in Nepal
- Hiring of staff (local or foreign)
- Obtaining sector-specific licenses if required
- Start of business operation after fulfillment of all legal formalities
Legal Services Offered for Registration
- Investment proposal drafting
- Document preparation and notarization
- Application submission to DOI
- Coordination with OCR, NRB, IRO
- Translation and legalization of foreign documents
- Legal representation for meetings or clarifications
Benefits and Limitations of Registration
Benefits:
- Access to Nepalese market
- Legal protection of investment
- Repatriation of profits allowed
- Opportunity to expand in regional South Asian markets
Limitations:
- Sectoral restrictions
- Minimum capital requirement
- Compliance and annual filings mandatory
- Approval delays in some sectors
FAQs
What is BOI in Nepal?
BOI in Nepal refers to the Department of Industry that handles foreign investment approvals under FITTA.
Who needs BOI approval?
Any foreign investor planning to invest in sectors listed under FITTA must obtain BOI approval.
How long is the process?
It takes around 7 to 21 working days for BOI approval if documents are complete.
What are the documents needed?
Passport, investment proposal, company documents, and notarized agreements.
Are there charges for BOI approval?
There is no direct fee for BOI approval, but professional and translation costs may apply.
Can BOI reject applications?
Yes, if the proposal does not meet legal or policy requirements.
Is BOI same as FDI?
BOI is the approving body; FDI refers to the investment made by a foreign entity.
Do I need to visit Nepal?
Not mandatory if an authorized representative handles the process.
Does BOI grant work permits?
No, work permits are handled by the Department of Labor.
What’s after BOI approval?
Register the company, remit funds, and start operations legally in Nepal.