Investment Board Act, 2068 (2010)


Published: 2010

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Investment Board Act, 2068

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Investment Board Act, 2068 (2010)
Date of Authentication and Publication
2068.05.23 (9 Sept. 2010)

Act Number 7 of the year 2068 B.S.
An Act made to provide for provisions on Investment Board

Preamble: Whereas, it is expedient to constitute a high powered Investment
Board to mobilize the investment of public-private partnership, co-operative
and national as well as foreign private sector for economic development, to
accelerate the process of industrialization in systematic manner, to develop
strong, dynamic and competitive economy by constructing infrastructures and
to make meaningful contribution for poverty alleviation by creating
opportunity of employment.
Now, therefore, be it enacted by the Constituent Assembly in the
capacity of Legislature Parliament pursuant to Article 83 of the Interim
Constitution of Nepal, 2063.
1. Short Title and Commencement: (1) This Act may be called
"Investment Board Act, 2068".
(2) This Act shall come into force immediately.
2. Definition: Unless the subject or context requires otherwise, in the Act,
(a) "Board" means the Board constituted pursuant to Section 3.
(b) "Member" means member of the Board and this term also
includes the chairperson of the Board.
(c) "Office" means the office of the Board established pursuant to
Section 6.
(d) "Investment" means project investment made pursuant Section 9.


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(f) "Prescribed” or “as Prescribed" means prescribed or as prescribed
in the Rules framed under this Act.
3. Formation of the Board: The following investment Board shall be
constituted to create environment for investment in infrastructure
development and in other sectors and to mobilize and manage the
investment of public private partnership, co-operative and national as
well as foreign private sector.
(a) Prime Minister - Chairperson
(b) A minister designated by the
Prime Minister - Vice-chairperson
(c) Finance Minister - Member
(d) Industry Minister - Member
(e) Forest Minister - Member
(f) Vice-chairperson of the National
Planning Commission - Member
(g) Governor of Nepal Rastra Bank - Member
(h) Chief-Secretary of the
Government of Nepal - Member
(i) Four persons with at least a
woman from among the experts in
the field of industry, tourism,
infrastructure development,
commercial law and financial
sector - Member
(k) Executive Chief of the office -Member-secretay
4. Procedure relating to the meeting of the Board: (1) A meeting of
the Board shall be held in such date, place and time as specified by the
chairperson.


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(2) The chairperson shall chair a meeting of the Board and in his
or her absence; the vice-chairperson shall chair a meeting.
(3) The Board may invite the concerned line minister, the
secretary of the concerned ministry, any officer of the Government of
Nepal or a national or foreign expert in a meeting of the Board.
(4) The Member-Secretary shall authenticate and maintain the
record of the decision of the Board.
(5) Other procedure relating to the meeting of the Board shall be
as specified by the Board itself.
5. Functions, duties and powers of the Board: The functions, duties
and powers of the Board shall be as follow;
(a) To formulate or cause to formulate investment policy.
(b) To select or cause to select competitive or priority sector from the
sectors of investment as referred to in Section 9.
(c) To select the project for possible investment, to cause to invite
proposal for investment in the selected project , o cause to
make evaluation of the received proposal, to cause to make
negotiation with the investor, to grant approval for the
investment and to cause to conclude an agreement with
proposer.
(d) To monitor or cause to monitor whether the construction,
implementation or operation of the project is running as per the
agreement related to the investment.
(e) To specify economic or non-economic facility and to pr vide the
specified facilities accordingly.
Provided that, the specified facility shall be provided as
per the set criteria and the procedure.
(f) To cause to prepare criteria relating to the analysis of the project,
to specify terms and conditions for the investment and to cause to
make an agreement with the investor.


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(g) To provide necessary land pursuant to the prevailing aw for
approved investment.
(h) To co-ordinate or cause to co-ordinate between various ministries
as well as government and local bodies for the promotion of
investment.
(i) To take prompt decision and to promptly address the problem of
the project.
(j) To mobilize Nepali Missions situated abroad for the promotion of
investment.
(k) To perform or cause to perform other act as specified or the
promotion of investment.
6. Office of the Board: (1) There shall be an office of Investment Board
to make inquiry in to the project investment to be granted approval by
the Board and to recommend to the Board for approval.
(2) The Executive chief, to work as a full time holder, shall be the
chief official of the office.
(3) The office may, on the approval of the Board, form a team of
advisors or Nepali experts as it deems necessary.
Provided that, the service of a foreign expert may be
availed in the condition of unavailability of Nepali expert.
(4) The office may, as it deems necessary, invite the concerned
expert, entrepreneur, businessperson, investor or any officer or
employee of the government of Nepal or any employee of a corporate
body owned by the government in a meeting of the office.
(5) The procedure relating to inquiry and evaluation of a project
investment shall be as specified by the Board.
7. Functions, duties and powers of the office: The office shall have
the following functions, duties and powers.


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(a) To invite proposals of investment for competition in the project
approved by Board.
(b) To evaluate as well as analyze the investment proposal submitted
by investors and to submit it to the Board accordingly.
(c) To negotiate and conclude agreement with an investor on the
basis of terms and conditions approved by the Board.
(d) To motivate an investor for implementing the project as per the
agreement.
(e) To monitor the implementation of the project and to recommend
to the Board for cancelation of the license where it is found that
the project is not implemented as per the time frame.
(f) To solve the problems seen in the course of the imple entation
of the project.
(g) To admonish the investor for not implementing the approved
project within time frame and to recommend to the Board for
action where the project is not implemented despite of
admonition.
(h) To manage for providing specified economic or non-economic
facility to the investors.
(i) To submit suggestions to the Board for reform where investors
are not motivated for making investment due to insufficient
facility provided in a sector or for any other reason.
(j) To submit suggestions to the Board where it is necessary to give
special priority to a sector or sub-sector of specific investment.
(k) To carry out administrative and other function specifi d by the
Board.
8. Expert committee or taskforce: (1) The office may, on the approval
of the Board, form expert committee or task force in order give
suggestion to the Board by making study or analysis of particular
technical aspect of the project investment.


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(2) The expert committee or taskforce shall submit its report
within specified time upon making study in the matters specified by the
office.
(3) The procedure relating to the acts and activities of the expert
committee or taskforce shall be as determined by the office.
9. Project investment: (1) Notwithstanding anything contained in the
prevailing law, the investment necessary for the imple entation of the
following project shall be implemented under this Act;
(a) Investment to be made in fast track road, tunnel,
railway, rope way, trolley bus as specified by the
Government of Nepal,
(b) Investment to be made in the construction of
international as well as regional level airport and i
modernization and management of the running
airport,
(c) Investment to be made in the management and
refinement plant of dump,
(d) Investment to be made in chemical fertilizer
production factory,
(e) Investment to be made in the plant of petroleum
refinery,
(f) Investment to be made in the construction of big
bridge specified by the Government of Nepal,
(g) Investment to be made in Bank and financial
institution to be established in foreign investment
having more than fifty one percent or in the
establishment or operation of insurance or
reinsurance company,


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(h) Investment to be made in medical college as well as
hospital or nursing home having more than three
hundred beds,
(i) Investment to be made in hydro power project
having the capacity of Five hundred or more than
five hundred megawatt,
(j) Investment to be made in the establishment of
special economic zone, export promotion or
refinement zone, special industrial zone or
information technology park,
(k) Investment to be made in any infrastructure or
service industry having fixed capital of Ten
hundred million rupees or having more than Ten
hundred million rupees project cost,
Explanation: For the purpose of this clause
infrastructure or service industry shall mean
construction industry, mine industry, tourism
industry or air industry.
(l) Investment to be made in any productive industry
having fixed capital of Ten Hundred Million
Rupees or having more than Ten Hundred Million
Rupees project cost.
(m) Investment to be made in priority sector having the
nature as referred to in from Clause (a) to (m)
specified by the Government of Nepal.
(2) Notwithstanding anything contained in Sub-section (1) ,in
case, an investor submits a complaint to the Board stating that he/she
faces any obstacle, difficulty or discourage in the process of investment
made pursuant to the prevailing law, the Board shall m ke a decision as
may be required and give direction to the concerned bo y to abide by
such decision.


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10. An application to be submitted to the Board: (1) A person,
whoever, intends to make investment in a project as mentioned in
Section 9 shall submit an application to the Board in the prescribed
format with the proposal of investment and the fee as prescribed.
(2) Upon the receipt of the application pursuant to Sub-section
(1) the Executive chief shall make preliminary asses ment of the
application, and in case, the proposed investment project is found to be
appropriate he/she shall initiate the process of the inquiring and
evaluation of the financial, environmental, technical and social aspect of
the project within seven days.
(3) Upon the receipt of the application pursuant to Sub-section
(1) the office shall make necessary evaluation of the application within
Thirty days and shall submit recommendation to the Board whether to
give or not to give approval to the concerned project investment.
Provided that, in case, recommendation cannot be submitted
within the aforesaid period due to a reasonable cause, the Board may
extend the time as may be required.
(4) In case, any study, appraisal or inquiry is to be required in a
technical aspect of the proposed project investments before making
recommendation pursuant to Sub-section(3), the office may cause to
make study, appraisal or inquiry through expert committee or taskforce
pursuant to Section 8.
(5) The Board shall, within Seven days from the date of reception
of the recommendation pursuant to Sub-section (3), make decision
whether to approve the project with or without any condition or not to
approve and shall provide information thereof to the applicant.
(6) In case, negotiation with concerned applicant is to be required
before providing information to the applicant pursuant to Sub-section (5)


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the Board may hold negotiation with concerned applicant through the
office.
(7) In case ,negotiation is to be held before providing
information pursuant to Sub-section (6) the office shall invite the
applicant for holding negotiation by setting out the venue and time of
negotiation within Seven days of the decision of the Board.
(8) After holding negotiation pursuant to Sub-section (6) ,the
Board shall ,on the basis of recommendation of the office, make
decision whether to give approval with or without any condition or not
to give approval to the project and shall provide information of the
decision and shall also provide information of the d cision to the
applicant.
(9) Where the project investment is approved pursuant to Sub-
section (5) and (8), the Board shall issue license i prescribed format
upon collecting prescribed fee to implement the project under prevailing
law.
(10) The applicant shall collect license within Fifteen days from
the date of receiving the notice of the approval grnted pursuant to this
section upon fulfilling required terms and conditions and the investor
shall complete the process of the registration of the project and company
pursuant to prevailing law within Fifteen days.
(11) In case, the investor fails to collect license or fails to
register the company as well as the project pursuant to Sub-section (9)
or (10) due to a reasonable cause, the applicant my request the Board
through the office to extend time for collecting license or for giving
effect to registration, as the case may be, by setting out aforesaid cause
and the Board may extend reasonable time for the said purpose.
Provided that, generally the extension of time period shall not be
more than One month.


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(12) In case, environmental impact study or assessmnt of the
project issued license pursuant to Sub-section (9) is to be carried out
notwithstanding anything contained in the prevailing law, the Board
shall give Three months time for such purpose by considering the nature
of project, and the investor shall complete the study or assessment
within such time frame and shall submit the report thereof to the
prescribed body in such format as prescribed.
(13) In case, the investor fails to make study within e period as
referred to in Sub-section (12) and make request in writing to the Board
to extend the time frame, the Board may extend the tim frame upto
Three months.
(14) The concerned body shall complete study on enviro mental
impact assessment report submitted by the investor and shall make
decision within Twenty one days.
(15) In case, the concerned official fails to make d cision
pursuant to Sub-section (14) except in the circumstances of force
majure, the Board may recommend the Government of Nepal to take
action against such official pursuant to prevailing law.
(16) Notwithstanding anything contained elsewhere in this Act,
the project shall not be constructed only on the ground of approval
obtained pursuant to Sub-section (9) or on the ground of registration
made pursuant to Sub-section (10) where such project r quires
environmental impact assessment pursuant to the prevailing law.
(17) In case, an investor initiates the construction of a project
without fulfilling the process as referred to in this Section, the Board
may take any or all of the following actions;
(a) To prevent construction of the project
(b) To cancel the license of the project


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(c) To take the project in control and to confiscate the
property thereof.
11. To be deemed the fulfillment of the process: (1) Notwithstanding
anything contained in the prevailing law, in case, a project is approved
by the Board pursuant to this Act and the investor obtains license
pursuant to Section 10, such license shall be deemed to have issued by
fulfilling the procedure pursuant to the prevailing law.
(2) No legal, administrative or policy provision having adverse
impact shall be imposed on the terms and conditions f the license
issued pursuant to Sub-section (1) until the license expires and any legal,
administrative or policy provision which causes adverse impact on the
license shall not be valid.
12. Facility pursuant to prevailing law to be obtained: An investment
made after receiving license pursuant to this Act shall be entitled to
obtain all protection, facility, concession and exemption to be obtained
under the prevailing law relating to industrial enterprise and foreign
investment and technology transfer or under any lawincluding the
facility provided by this Act.
13. Executive chief: (1) There shall be an Executive Chief in the Board to
carry out daily administrative business and the functio of the Board.
(2) The Executive Chief shall be chief administrative official as a
full time holder and his/her remuneration and other facilities shall be as
specified by the Government of Nepal.
(3) Any Nepali citizen having the following qualification shall be
eligible to be appointed as an executive chief.
(a) Who holds at least masters degree from recognized
academic institution in Economics, Management
Engineering, Project Analysis or Commercial Law


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and holds at least Ten years experience in the
concerned field and deserves high level expertise.
(b) Who has attained Thirty Five Year of age.
(4) The Government of Nepal shall, for the purpose of
recommending a person to be appointed as an executiv chief to the
Board, constitute a selection committee under the Convener-ship of the
vice-chairperson of the Board in which vice chairperson of National
Planning Commission and one former secretary of the Government of
Nepal shall be the members and the said committee shall, on the basis of
competition, recommend Three persons to the Board for appointing
Executive Chief by fulfilling the prescribed procedure.
(5) The Government of Nepal, cabinet shall appoint a person
from among recommended persons pursuant to Sub-section (4) in the
post of Executive Chief.
(6) The tenure of the office of the Executive Chief shall be Four
years and he/she may be reappointed for another one term.
(7) The office of the Executive Chief shall fall vacant in the
following circumstances.
(a) If he or she tenders esignation to the Board.
(a) If he or she dies.
(c) If the Government of Nepal removes him/her from
his/her post where his/her standing of work
performance is not satisfactory.
(d) If his/her tenure expires.
(8) Before removing the Executive Chief from his/her office
pursuant to Clause (c) of Sub-section (7), he/she sall be given a
reasonable opportunity to defend him/herself.


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14. Functions, duties and powers of the executive chief: (1) In
addition to the functions, duties and powers of the Ex cutive Chief as
provided in this Act, the Executive Chief shall have the following
functions, duties and powers;
(a) To prepare the agenda to be submitted in the
meeting of the Board.
(b) To prepare the list of proposals received by the
Board and to submit it to the Board by making
evaluation.
(c) To implement the decisions and directives made by
the Board.
(d) To prepare annual budget and programmes of the
Board as well as office and to submit it to the Board
for approval.
(e) To monitor and evaluate or to cause to monitor and
evaluate the implementation of the project
approved by the Board for implementation.
(2) Other functions, duties and powers of the Executive Chief
shall be as prescribed.
15. Appointment, tenure and removal of members: (1) The Prime
Minister shall appoint the persons to be nominated pursuant to Clause (i)
of Section 3 as a member of the Board and the tenure of the office of
such member shall be Two years. Such member may be re-appointed.
(2) If a nominated member tenders resignation to the prime-
minister, dies, the Prime Minister removes him/her from his/her office
where the standard of work performance of such number is not
satisfactory or his/her tenures expires, nominated numbers shall be
relieved from his/her office.
(3) In case, a nominated member is relieved from his/her office
pursuant to Sub-section (2), next person shall be appointed as a member
only for the remaining period.


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16. Special provisions relating to the approval of project:
Notwithstanding anything contained elsewhere in this Act, the Board
may provide approval for investment in any sector of investment by
direct negotiation in the following circumstances;
(a) Where the proposal cannot be selected in required number
despite the invitation of proposal for at least Two times.
(b) Where there is no possibility of competition.
(c) Where the investment includes new concept or
technology.
(d) Where the investment cost is more than Twenty Hundred
Million Rupees.
(e) Where it is not appropriate to follow the procedure as
provided in this Act for any reason.
17. Board may provide extra-facility: (1) Notwithstanding anything
contained elsewhere in this Act, in addition to the facilities provided by
Section 12 during the commencement of this Act, the Board may, by
publishing a Notification in Nepal gazette, provide such extra facilities
as prescribed to such project as prescribed.
(2) Notwithstanding anything contained in the prevailing law,
there shall be no bar to consume the facilities provided pursuant to this
Act for the prescribed period.
Provided that, in case, the Board finds that a facility provided
while granting approval has been misused by a project, the Board shall
terminate such facility. Before terminating the facilities, an opportunity
for defense as prescribed shall be provided.
18. Safety and protection of investment: (1) An investment made
pursuant to this Act shall not be nationalized during the period of
license.


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(2) Where an investment received approval in a sector on the
basis of competition, no permission which causes adverse impact on the
said investment shall be granted for a prescribed priod to make any
other investment in the same sector and to make an investment having
same nature.
(3) Save as provided anything in the license, generally the terms
and conditions of the license shall not be altered, upon the issuance of
the license.
19. Difficulty to be removed: In case, any difficulty arises while
implementing this Act, the Government of Nepal may remove such
difficulty by issuing an order in Nepal gazette.
20. To be according to this Act: Matters set forth in this Act shall be
governed by this Act and other matters shall be governed by the
prevailing law.
21. Liaison with the Government of Nepal: The Board shall make
liaison with the government of Nepal through the office of the Prime
Minister and the Council of Ministers.
22. Power to frame Rules: The Board may frame necessary Rules to
implement the objectives of this Act.
23. Dissolution of Board: (1) The Government of Nepal may dissolve the
Board for any reasonable cause.
(2) Upon the dissolution of the Board pursuant to Sub-section (1)
title liability and property of the Board shall be transferred to the
Government of Nepal