NRNs allowed to invest in Nepal’s stock market

Kathmandu, November 22 — Legal provision has been made for Non-Resident Nepalis (NRNs) to invest in Nepal's stock market. The Securities Board of Nepal (SEBON) has introduced the provision for this through the Securities Issuance and Distribution Directive (Eighth Amendment), 2024.

According to the Directive issued on Friday, NRNs can now invest in the stock market by establishing joint investment companies. These companies can issue a minimum of 10% and a maximum of 49% of their shares to NRNs.

Before issuing shares, the investment companies involving NRNs must register with the Securities Board. Once approved by the board, Initial Public Offerings (IPOs) can be opened for NRNs for a minimum of four days and a maximum of 15 days.

Shares traded through these IPOs must involve at least 1,000 units and can only be traded among NRNs. Moreover, shares obtained through IPOs cannot be sold or traded for one year. Rights shares can also only be transferred among NRNs.

The Directive states that the securities issued under this scheme do not require the appointment of a securities guarantor. Additionally, the Directive clarifies that the new provisions will not affect the existing arrangements made under previous laws allowing NRNs to invest.

Nawaraj Adhikari, Executive Director of the SEBON, stated that the amendments aim to attract Nepalis who have relinquished their Nepali citizenship and acquired foreign citizenship to the capital market. He emphasized that this initiative will help mobilize the capital collected in Nepal.