Now, any investment in designated industries can be approved through the automatic route.
What you should know
The limit on foreign direct investment (FDI) approved through the automatic route has been removed. With the publication of a notification in the Gazette on Falgun 4, the limit on FDI approved through the automatic route in specified areas has now been removed. Earlier, FDI was approved only up to a total capital of Rs 500 million through the automatic route.
The Cabinet meeting held on 28th Magh had decided to remove the upper limit on foreign investment through the automatic route. The Cabinet decision states that the upper limit on foreign investment through the automatic route will be removed in the specified industry and business sectors. However, it could not be implemented as the notice was not published in the Gazette.
On 4th Falgun, Information Officer of the Department of Industries Suresh Dahal said that this provision has been implemented as the notice was published in the Gazette. 'Earlier, only up to Rs 500 million could be approved through the automatic route, but that limit has been removed. Now, any amount of investment can be approved in the specified industries through the automatic route,' he said.
Industry and business sectors have also been specified under energy-based industries, agriculture and forest products-based industries, infrastructure industries, tourism industries, information technology-based industries, service-based industries, and manufacturing industries. Only in those industries The Department of Industry has stated that the limit has been removed when approving investment through the automatic route.
On 15 Asho 2080, a notification was published in the Gazette stating that the upper limit for foreign investment approval through the automatic route would be up to Rs 500 million. The Gazette also states that the Ministry's notification was revoked. The upper limit and industrial and business sectors for foreign investment through the automatic route were specified by exercising the authority granted by Sub-section 2 of Section 42 of the Foreign Investment and Technology Transfer Act 2075.
Sub-section 2 of Section 42 of the said Act states that the government may, by publishing a notification in the Gazette, provide services such as company registration, industry registration, foreign investment approval through the automatic route in accordance with the Act and prevailing laws to simplify and facilitate the foreign investment process.
Rule 8 'A' of the Foreign Investment and Technology Transfer (First Amendment) Regulations 2077 was added to provide services through the automatic route. The Ministry of Industry, Commerce and Supplies inaugurated the electronic system prepared by the Department of Industry on the occasion of the Third Investment Summit and implemented it.
It had stated that foreign investors who wish to establish a new company with 100 percent share ownership or joint investment with a total capital of up to Rs 500 million through the automatic route or those who are established and operating with foreign investment can apply for capital increase in such a company and automatically receive approval by submitting an application through the automatic route.
It had stated that foreign investors who wish to approve foreign investment can apply through the automatic route and receive a letter of approval for foreign investment via email immediately after submitting the application and can register the company on the same basis. Investments will be made in energy-based industries, agriculture and forest products-based industries, infrastructure industries, tourism industries, information technology-based industries, service-based industries, and manufacturing industries.
The government, on the occasion of the third investment conference held in Baisakh 2081, has amended Section 17 of the Foreign Investment and Technology Transfer Act 2075 and has given the responsibility of FDI approval to the Department of Industry. Earlier, the department approved only FDI of less than Rs 6 billion. Investments exceeding Rs 6 billion were made by the Investment Board. Now, the department is approving FDI of any amount. That is why the investment commitment is continuously increasing, according to the employee.
Foreign investors who want to obtain foreign investment approval through the automated route will have to log in to the electronic system operated by the department imis.doind.gov.np and enter the details and documents requested by the system in such a system. After entering the necessary details and documents for foreign investment approval in the electronic system, the details and documents entered by the concerned foreign investor can be checked and corrected if necessary before submitting them in the electronic system for such investment approval.
After the foreign investor checks the details and documents entered and corrects them as necessary, they can submit them to the department's electronic system for foreign investment approval. After receiving an application for foreign investment approval in the department's electronic system, the foreign investor will be provided with confirmation (confirmation) of his investment approval along with the application number to the email address entered by him. In addition to such information, the foreign investor can also receive a letter of investment approval from the department's electronic system. The department has stated that after providing information about foreign investment approval, his foreign investment is automatically considered approved in accordance with the Act and Regulations.
