With the aim to facilitate and ease foreign investment approval process, Nepal Rastra Bank (“NRB”) has enacted “Foreign Investment and Foreign Loan management By-Law” (“By-Law”) on 8 June 2021 (25 Jestha 2078) pursuant to Foreign Exchange Regulation Act 1962 and Nepal Rastra Bank Act 2002. By-Law has introduced a number of provisions regarding foreign investment and foreign loan approval. One of noteworthy provision introduced by By-Law is the waiver of approval process to bring in foreign investment amount. Nevertheless, Companies with foreign investment are required to notify NRB in the format specified in the By-Law, submit certain documents to Bank and Financial Institution before bringing in foreign investment amount and to record the foreign investment amount with NRB. Although By-Law has exempted approvals for fresh investment and subsequent capital increment, By-Law still requires foreign investors/companies with foreign investment to obtain prior approval in share purchase transactions. By-Law has become effective from 8 June 2021 (25 Jestha 2078).

You may download the Bylaws here.