198 companies have applied for a license to conduct real estate transactions. The government had issued a notification in the gazette on 27 Ashoja, stipulating that companies conducting real estate transactions worth more than 30 million rupees at a time would have to obtain a license.

Companies dealing in real estate were required to apply for a license by 27 Mangsir. The Department of Land Management and Records had issued a notice on 13 Kartik asking them to submit applications within 30 days. Immediately, an additional 15 days were added on 13 Mangsir. 198 companies applied during that period. 

‘198 companies have applied for a license,’ said Ganesh Prasad Bhatta, spokesperson for the Ministry of Land Management. ‘The Director General of the Land Department has completed the necessary process and the government has made an arrangement to immediately obtain a license when buying and selling real estate worth more than 30 million rupees at a time through companies in metropolitan and sub-metropolitan cities across the country.’ 

The gazette states that the government has published a notice for the purposes of ‘a’ and ‘b’ of Section 26 of the Land Revenue Act. Section 26 of ‘a’ of the Land Revenue Act states that a license is required to be obtained to conduct real estate-related transactions. The section states that a license must be obtained for real estate transactions exceeding the area or amount specified in the notification published by the government in the same gazette.

Section 26 (b) of the Act states that an application for a license must be submitted. Sub-section 1 of Section 26 (b) states that a person who wishes to obtain a license to conduct real estate transactions must submit an application to an officer designated by the Government of Nepal by publishing a notification in the Nepal Gazette, along with the specified details, documents and fees. The Director General of the Department of Land Management has been designated as such an officer.

Sub-section 3 of the same section states that if the application received is found to be reasonable, the concerned officer must issue a license to the applicant to conduct real estate transactions, stating the conditions as specified. The term of the license is for five years, as stated in Sub-section 4 of Section 26 (b). According to Sub-section ‘J’ of Section 23 of the Land Revenue Regulations, 2036, a person who wants to obtain a license to conduct real estate transactions between natural and legal persons or legal persons must apply to the designated authority.

While submitting the application, a copy of the company or firm registration certificate with the intention of conducting real estate transactions, a copy of the company’s articles of association and a copy of the updated share register must be submitted. The regulations stipulate that a copy of the permanent account number registration certificate, a copy of the company or firm’s tax payment certificate for the last fiscal year, and a detailed business plan of the company or firm must be submitted along with the application.

The regulations stipulate that a copy of the decision of the company or firm’s board of directors and the company or firm’s website, email and contact person number must be submitted to obtain a license for real estate transactions. Bhatta said that after receiving the application, the Director General of the Department will investigate whether the documents have been submitted according to the required criteria and will make the person pay the revenue after ‘qualifying’. Once the license is granted, the regulations state that the firm or company will have to pay a fee of Rs 500,000 for transactions up to Rs 50 million at a time and Rs 1 million for transactions of any amount less than or equal to Rs 50 million at a time.

Bishnu Ghimire, President of the Nepal Real Estate and Housing Development Federation, said that the application for the license was submitted because the government has introduced a license system to regulate real estate transactions. “Since the government has introduced a license system to regulate real estate transactions, it was necessary to obtain a license,” he said. “The government should bring individuals as well as companies involved in real estate transactions under the scope of the license.”

Real estate entrepreneurs have expressed dissatisfaction saying that the government is trying to regulate only transactions through companies without doing anything to individuals involved in real estate transactions. Ghimire, President of the Federation, expressed dissatisfaction saying that a license is mandatory for those dealing through companies but not for individuals. "We were also happy that the real estate transaction would be transparent and organized after the license," he said, "but the system was different than we expected."