Print Edition - 2015-08-19 | MONEY
Preliminary expenses to be lumped with FDI
Aug 18, 2015-
Nepal Rastra Bank (NRB) has created a provision allowing foreign investors making cent percent investment in Nepal to bring in up to 1 percent of their paid-up capital to pay registration fees and cover preparation costs.
The central bank said that it would recognize the money coming through banking channels for preliminary expenses as being part of foreign direct investment (FDI). The money can be sent in the name of the company’s local agent.
NRB Director Bashu Adhikari said that the central bank had taken the step to make things easier for investors since they had been facing difficulties in their preparatory tasks as their spending for the purpose was not considered as being FDI.
Currently, the government approves FDI only after the company is registered and approval is obtained from the Department of industry and NRB. “Investors have to spend a certain amount on the preparations, and the new provision will facilitate that,” said Adhikari.
The move is in line with the monetary policy for the fiscal year 2015-16 which states that investors will be allowed to bring a certain amount of money for preparation costs, and it will be counted with their FDI. According to NRB, the auditor has to first confirm that the amount was actually spent on registration and preparation costs.
NRB has told commercial banks that they should include the money in the FDI amount while issuing the FDI certificate. NRB officials said that move would help foreign investors to make the necessary preparations to bring foreign investment into the country.
Published: 19-08-2015 08:03