NRNs Get New Route to Invest in Nepal’s Stock Market: 1,000 Shares Minimum, Up to 85% Issue

Nepal has opened the legal framework for companies to issue shares in foreign currency targeting Non-Resident Nepalis (NRNs). The government has introduced the “Securities Registration and Issuance (Eighth Amendment) Regulations, 2083,” allowing eligible companies to issue shares specifically under this arrangement.

Under the amended rules, eligible companies can issue between 10% and 85% of their issued capital. The shares cannot be issued by adding a premium, while the trading system will be determined by the SEBON. The minimum trading unit for such shares has been fixed at 1,000 shares.

An official of the Securities Board of Nepal (SEBON) said companies seeking approval for such share issues can now move ahead as the legal provision has come into effect. The new rules were registered at the Ministry of Law, Justice and Parliamentary Affairs.

According to Anil Raj Bhattarai, CEO of NRN Nepal Development Fund, the provision is aimed at bringing foreign currency investment from Nepalis living abroad into Nepal. He said the minimum 1,000 share requirement is intended to make overseas investment practical by reducing the relative cost of sending smaller amounts of money.

The arrangement is expected to allow NRNs and Nepali origin foreign citizens to invest in Nepal in foreign currency and, subject to the required system and rules, take returns abroad in foreign currency. Bhattarai said work is also underway on the account and investment systems needed to support such transactions, involving Nepal Rastra Bank, SEBON, NEPSE and CDS and Clearing. The new provision could also allow companies established through joint investment between NRNs and the Government of Nepal to issue such shares.