One Stop Service Centre off to a rough startDespite the government enacting the Foreign Investment and Transfer of technology Act (FITTA) nearly three months ago, the regulation has yet to be enforced.
The government has brought to operation the much hyped One Stop Service Centre, the country’s first mechanism of its type to facilitate investors, but it got off to a rough start. From delays in enforcing new laws to using obsolete computer software, the centre has been hindered in performing its tasks.
Despite the government enacting the Foreign Investment and Transfer of technology Act (FITTA) nearly three months ago, the regulation has yet to be enforced.
Officials at the Department of Industry, which houses the centre, said they have been compelled to carry out their tasks based on the old Industrial Enterprise Act.
“Based on the old law, companies seeking to start their business will have to wait for over a month to receive an operating licence,” said an official at the department, who is not authorised to speak to the media.
The government has targeted to invite a large chunk of foreign investment to plug the resource gap in order to meet development goals.
In order to give the centre a leg up, the government in March held an investment summit along with amending a number of acts and policies including FITTA.
According to the department source, they are also compelled to rely on the old computer software which does not support the full-fledged online documentation process and online payment.
“The full-fledged online system is a must to facilitate foreign companies looking to inject their capital in the country,” said the source.
The current software used by the department only allows companies to register their business in the beginning.
“However, the existing system does not conduct tasks related to increase in capital, transfer of ownership and increase in number of shareholders, among others.”
Three weeks ago, the government revised the minimum threshold for foreign direct investment from Rs5 million to Rs50 million, citing the delay in enforcing the FITTA regulation.
According to the department, the final draft of the regulation has already been prepared but has yet to be enforced due to dilly dallying at various government agencies.
The government brought into operation the One Stop Service Centre on May 16. The centre is designed to cut hassles for investors by providing a range of services at one place and save them the trouble of visiting various government offices to get the paperwork done. The centre provides services ranging from registration of firms to the procedures of exit that involves providing repatriation service to foreign firms from the centre if they wish to close their business in Nepal.
Although the centre was supposed to install dedicated offices of 14 government agencies under one roof, only four are now offering their services via the centre. These include the desks of Nepal Rastra Bank, Inland Revenue Department, Land Management and Ministry of Home Affairs.
In the past one month since opening, 35 companies have taken operating licences through the One Stop Service Centre. Of them, 16 are foreign companies that have pledged to invest Rs252.70 million. Most of the foreign companies are related to service and hospitality businesses.
The remaining 19 operating licences were awarded to domestic companies, with many of them seeking to invest in hydropower projects.