NRN Property Law in Nepal

Can NRN Own Property in Nepal?

Non-Resident Nepalis (NRNs) have certain rights to own property in Nepal, subject to specific regulations. The Non-Resident Nepali Act, 2064 (2008) and its associated Rules provide the legal framework for NRN property ownership.

Foreign citizens of Nepali origin, who fall under the NRN category, are permitted to purchase and own immovable property in Nepal for residential purposes. This right extends to the NRN and their immediate family members. However, there are restrictions on the amount of land that can be purchased.

NRNs who previously held Nepali citizenship and acquired it while being a Nepali citizen are not subject to the land ownership limits imposed on other NRNs. They can retain ownership of property acquired during their time as Nepali citizens.

Additionally, NRNs can inherit ancestral property in Nepal without requiring government approval. This applies to property inherited from both Nepali citizens and foreign citizens of Nepali origin. To claim inherited property, an NRN must possess a valid NRN identity card.

Can NRN Buy Land in Nepal?

Yes, Non-Resident Nepalis (NRNs) can buy land in Nepal, but the process is subject to certain conditions and limitations. The Non-Resident Nepali Act, 2064 (2008) and its Rules provide the legal basis for NRNs to purchase land in Nepal.

Foreign citizens of Nepali origin, who are categorized as NRNs, are allowed to purchase land in Nepal for residential purposes. This right is extended to the NRN and their immediate family members. However, there are specific restrictions on the amount of land that can be bought.

The land purchase must be made with the intention of residing in Nepal, either for the NRN themselves or for their family members. It’s crucial to note that the land acquired under this provision cannot be used for commercial purposes without obtaining the necessary approvals and complying with relevant laws.

NRNs must follow a specific process to purchase land, which includes obtaining permission from the Secretary of the Ministry of Foreign Affairs. This ensures that the land acquisition complies with the legal requirements and restrictions set for NRNs.

What is the process of Purchasing Land in Nepal?

Step 1: Submit an Application to MOFA

Step 2: Receive Permission from MOFA

Step 3: Registration of Land at the Land Registration Office

Step 4: Execution of Deed for Transfer of Ownership

Step 5: Issuance of the Certification

The process of purchasing land in Nepal for Non-Resident Nepalis (NRNs) is as follows:

1. Application Submission: The NRN must submit an application to the Secretary of the Ministry of Foreign Affairs (MOFA). This application should provide details about the location, area, and price of the land they intend to purchase.
2. Permission from MOFA: After receiving the application, the Secretary of MOFA will review it and conduct necessary inquiries. If everything is in order and complies with the Act and Rules, permission will be granted to purchase the land.
3. Land Registration: Once permission is obtained from MOFA, the NRN can proceed with the land registration process. This is done at the concerned Land Registration Office.
4. Deed Execution: A deed of sale/transfer of ownership must be executed and filed with the relevant Land Revenue Office. This formalizes the transfer of land ownership from the seller to the NRN buyer.
5. Certificate Issuance: After the registration is complete, a blue-colored landowner certificate is issued to the NRN. This certificate serves as proof of ownership of the purchased land.

Throughout this process, it’s crucial for NRNs to ensure they’re adhering to the land ownership limits set by law. These limits vary depending on the location of the land, with different restrictions for areas within Kathmandu Valley, municipalities in the Terai district, and other regions of Nepal.

What are the documents required to purchase land in Nepal?

When purchasing land in Nepal, Non-Resident Nepalis (NRNs) need to prepare and submit several documents, which are as follows:

1. NRN Identity Card: A valid NRN identity card issued by the Ministry of Foreign Affairs or Nepali missions abroad is essential. This card proves the individual’s status as an NRN.
2. Passport: A copy of the NRN’s current valid passport is required.
3. Application Form: A duly filled application form requesting permission to purchase land in Nepal. This form should be submitted to the Secretary of the Ministry of Foreign Affairs.
4. Land Details: Documents detailing the location, area, and price of the land to be purchased. This may include a land survey certificate and a recent land ownership certificate of the seller.
5. Citizenship Documents: For foreign citizens of Nepali origin, documents proving their or their ancestors’ previous Nepali citizenship may be required. This could include citizenship certificates of parents or grandparents.
6. Seller’s Documents: The current landowner (seller) needs to provide their citizenship certificate, land ownership certificate, and other relevant documents.
7. Tax Clearance: Proof of tax clearance from the relevant authorities may be required.
8. Photographs: Recent passport-sized photographs of the NRN buyer.
9. Power of Attorney: If the NRN is not personally present for the transaction, a notarized power of attorney authorizing a representative to act on their behalf is necessary.
10. Bank Documents: If the purchase involves a transfer of funds from abroad, documents showing the source of funds and bank transfer details may be required.

How can NRN Inherit Property in Nepal?

Non-Resident Nepalis (NRNs) have the right to inherit property in Nepal, subject to certain conditions and procedures. The process of inheriting property for NRNs is governed by the Non-Resident Nepali Act, 2064 (2008) and its associated Rules. Foreign citizens of Nepali origin can inherit ancestral property from both Nepali citizens and other foreign citizens of Nepali origin without requiring approval from the Government of Nepal. This is a significant provision that allows NRNs to maintain their connection to their ancestral properties in Nepal. To inherit immovable property in Nepal, an NRN must possess a valid NRN identity card.

The NRN must establish their claim to the property by providing evidence of their relationship to the deceased property owner. The NRN or their representative must follow the legal procedures for property transfer as per Nepali law. Once the inheritance claim is established and accepted, the property needs to be registered in the name of the NRN heir at the local land revenue office. Any applicable inheritance taxes or fees must be paid as per Nepali law.

How can NRN Invest in Nepal?

Non-Resident Nepalis (NRNs) have several avenues for investing in Nepal, as outlined in the Foreign Investment and Technology Transfer Act, 2019 (FITTA) and the Non-Resident Nepali Act, 2064 (2008).

NRNs can make direct investments in Nepali companies by purchasing shares or establishing new businesses. This can be done either individually or through a foreign company where the NRN owns more than 50% of the shares. NRNs can invest in various sectors open to foreign investment, including manufacturing, energy, infrastructure, and services. However, they must ensure that the proposed investment is not listed in the Negative List under FITTA. As per current regulations, there is a minimum investment threshold of NPR 20 million (approximately USD 154,000) for foreign investors, including NRNs.

NRNs need to obtain approval from the Department of Industry (DOI) or the Investment Board Nepal (IBN), depending on the size and nature of the investment. After obtaining investment approval, NRNs need to register their company with the Office of Company Registrar. NRNs are allowed to repatriate their investment and profits in convertible foreign currency, subject to applicable laws and tax obligations. NRNs can also invest through technology transfer agreements, which may include licensing of foreign intellectual property, franchising, or providing technical and management services.

How can NRN invest in the Stock Market of Nepal?

The process of investment typically involves the following steps:

1. Obtaining NRN status and ID card
2. Securing investment approval from DOI/IBN
3. Registering the company or acquiring shares in an existing company
4. Opening a bank account and obtaining necessary registrations (PAN, industry registration, etc.)
5. Injecting the investment amount through proper banking channels
6. Notifying the Ministry of Foreign Affairs about the investment

How can NRN Sell Land in Nepal?

Step 1: Verification of Ownership through Lal Purja

Step 2: Power of Attoney (if not present)

Step 3: Valuation of the Property

Step 4: Agreement for Sales of the Land

Step 5: Registration at the Land Revenue Office

Step 6: Completion of Land Sale

If the NRN is not present in Nepal during the sale process, they need to provide a power of attorney to a representative in Nepal. Once a buyer is found, an agreement to sell (Bainama) should be drafted. This document outlines the terms of the sale, including the price and any conditions. The land needs to be valued for tax purposes. The government offices use a minimum valuation rate, but the actual sale price can be higher. Capital gains tax may be applicable on the profit from the sale. The sale transaction needs to be registered at the local Land Revenue Office. Both the seller (or their representative) and the buyer need to be present for this process. A deed of sale needs to be executed and registered. This officially transfers the ownership from the NRN to the buyer.

NRN Donation and Gift Law in Nepal

Non-Resident Nepalis (NRNs) have the right to make donations and gifts in Nepal, including the transfer of property. It is governed by the Non-Resident Nepali Act, 2064 (2008) and other relevant laws. NRNs can transfer their property in Nepal by way of donation or gift. This includes both movable and immovable property.

Donation is defined as granting property free of cost to another person for religious, social, public, or community purposes, without the intention of making a profit. Gift is considered as granting property free of cost to another person out of family love or affection. For donations or gifts of immovable property or cash exceeding NPR 100,000 (approximately USD 840), a deed must be executed and registered with the relevant Land Revenue Office.

NRNs can make charitable contributions to not-for-profit entities in Nepal. These can be in the form of money, non-cash items, or in-kind donations.The recipient of the donation or gift may need to meet certain criteria, especially if the property was originally acquired under NRN provisions. For donations made in foreign currency, proper channels should be used, and relevant foreign exchange regulations must be followed.

NRNs can also establish and contribute to charitable organizations in Nepal, subject to compliance with relevant laws and regulations.

What is the Limits of Land purchasable by NRN?

Area	Maximum Land Holding
Kathmandu Valley	2 Ropani
Municipalities in Terai Districts	8 Katha
Other Municipalities (excluding Kathmandu Valley and Terai)	4 Ropani
Village Development Committees in Terai Districts	1 Bigha
Other Areas	10 Ropani

These limits apply to land purchased for residential purposes by the NRN or their family members. The limits are cumulative, meaning thatthe limits are cumulative, meaning an NRN cannot purchase multiple plots of land that exceed these limits in total.

NRNs who previously held Nepali citizenship and acquired property while being Nepali citizens are not subject to these limits for property acquired during that time. The land purchased under these provisions is primarily intended for residential use. Using it for commercial purposes may require additional approvals and compliance with relevant laws.

Property Rights of NRN in Nepal

The Property Rights of NRN in Nepal are:

1. Right to Purchase Property
2. Inheritance
3. Right to Sell Property
4. Donation and Gifts
5. Investment in Property
6. Bank Accounts
7. Repatriation

Right to Purchase Property

Non-Resident Nepalis (NRNs) have the right to purchase immovable property in Nepal for residential purposes. This right extends not only to the NRN but also to their immediate family members. However, it’s important to note that there are specific limits on the amount of land that can be purchased, and these limits vary depending on the location.

Inheritance Rights

NRNs can inherit ancestral property in Nepal without requiring government approval. This applies to property inherited from both Nepali citizens and foreign citizens of Nepali origin. To claim inherited property, a valid NRN identity card is required.

Right to Sell Property

NRNs have the right to sell property they own in Nepal, provided they follow the proper legal procedures. The sale process is similar to that for resident Nepalis, although there may be some additional considerations for NRNs.

Donation and Gift Rights

NRNs can transfer property in Nepal by way of donation or gift. For significant transfers, such as immovable property or cash over NPR 100,000, a deed must be executed and registered.

Investment in Property

NRNs can invest in real estate projects in Nepal, subject to foreign investment laws. However, it’s worth noting that direct ownership of real estate for commercial purposes may be restricted.

Bank Accounts and Repatriation

NRNs can open and operate bank accounts in convertible foreign currency in Nepal. They also have the right to repatriate their investment and profits in convertible foreign currency, subject to applicable laws.

Also Read: Non-Resident Nepali NRN Laws in Nepal

Legal Services for NRNs in Nepal

Prime Law Associates is a renowned leading NRN legal service provider in Nepal with lengthy connection with the Non-Resident Nepali Community:

Property Transactions

Our firm provides assistance in buying, selling, and transferring property for Non-Resident Nepalis (NRNs). We conduct thorough due diligence on property titles and ownership to ensure the security of your investments. Our services include drafting and reviewing sale agreements and other legal documents related to property transactions.

Investment Advisory

We offer legal advice on investment opportunities in Nepal, tailored to the unique needs of NRNs. Our team assists with foreign investment approvals and registrations, ensuring a smooth process for our clients. We provide guidance on compliance with the Foreign Investment and Technology Transfer Act (FITTA) and other relevant laws.

Company Formation and Corporate Law

Our firm assists NRNs in registering companies in Nepal, providing expert advice on corporate governance and compliance. We draft shareholder agreements and other corporate documents to protect your interests. Our team also offers guidance on mergers, acquisitions, and joint ventures, ensuring that your business operations in Nepal are legally sound and compliant with local regulations.

Immigration and Visa Matters:

We provide assistance with NRN visa applications and renewals, ensuring that our clients maintain their NRN status and related benefits. Our team offers advice on citizenship issues and guidance on the reacquisition of Nepali citizenship for those who wish to pursue this option.

Inheritance and Estate Planning:

Our firm assists NRNs in claiming inherited property in Nepal. We provide advice on estate planning for NRNs with assets in Nepal, helping to protect your interests and ensure the smooth transfer of assets to your beneficiaries. Our services include drafting wills and other succession documents tailored to your specific needs.

Dispute Resolution:

Our firm provides representation in property disputes and other legal conflicts that may arise for NRNs in Nepal. We assist with arbitration and mediation processes, offering alternative dispute resolution options. Our team also provides guidance on navigating the Nepali court system, should legal action become necessary.

Regulatory Compliance:

We offer advice on compliance with various Nepali laws and regulations relevant to NRNs. Our team assists with obtaining necessary licenses and permits for your activities in Nepal. We also provide guidance on foreign exchange regulations and the repatriation of funds.

Charitable and Non-Profit Activities

For NRNs interested in giving back to their home country, we provide assistance in establishing and operating non-profit organizations in Nepal. Our team offers advice on the legal aspects of charitable contributions and activities, ensuring compliance with local regulations.

Contract Law:

Our firm offers services in drafting and reviewing various types of contracts relevant to NRNs conducting business or personal affairs in Nepal. We provide advice on contract enforcement and dispute resolution, helping to protect your interests in all contractual matters.

Conclusion

The legal framework governing Non-Resident Nepalis (NRNs) in Nepal provides a unique set of rights and responsibilities, particularly in relation to property ownership and investment. While NRNs enjoy certain privileges, such as the ability to purchase land, inherit property, and make investments, they have limitations.

Contact NRN Lawyer in Nepal

Disclaimer: This material is presented solely for informational purposes, without constituting legal advice, counsel, or solicitation, and no liability shall arise from any actions, omissions, or reliance on its contents, directly or indirectly, in any manner whatsoever, irrespective of the jurisdiction or specific circumstances.