Industrial Enterprises Act 2020 (2076): A brief Overview and Comparative Analysis

By Mamata Paudel

Industrial Enterprises Act 2020 (2076) (“IEA 2020”) is now the preeminent legislation guiding the registration, establishment, operation and regulation of industries in Nepal. Bringing in some significant changes and repealing the Industrial Enterprises Act 2016 (2073) (“IEA 2016”) just three years after its introduction, IEA 2020 has addressed various new regulatory aspects of industries boosting decentralisation and federalism into the industrial entrepreneurship of the country.

IEA 2020 was expected to make reforms in order to establish an investment friendly environment and promote business growth and doing business in Nepal; especially as the IEA 2016 was heavily criticized for its relegating provisions that backlashed the expectations of business enthusiasts and industrialists.

Having addressed various new issues, IEA 2020 has introduced new concepts, provisions and incentives, which has been welcomed by entrepreneurs across the country albeit with some reservations.

This publication explores the major takeaways from IEA 2020 and the additions made to the previous legislation. To provide the audiences with the overview of the currently guiding industrial law, this write-up studies IEA 2020 from the business perspective. 

• Language: English
• Publisher: KG
• Release date: Apr 15, 2020
• ISBN: 9788835808060

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Executive Summary

Industrial Enterprises Act 2020 (2076) (" IEA 2020) is now the preeminent legislation guiding the registration, establishment, operation and regulation of industries in Nepal. Bringing in some significant changes and repealing the Industrial Enterprises Act 2016 (2073) ( IEA 2016") just three years after its introduction, IEA 2020 has addressed various new regulatory aspects of industries boosting decentralisation and federalism into the industrial entrepreneurship of the country.

IEA 2020 was expected to make reforms in order to establish an investment friendly environment and promote business growth and doing business in Nepal; especially as the IEA 2016 was heavily criticized for its relegating provisions that backlashed the expectations of business enthusiasts and industrialists.

Having addressed various new issues, IEA 2020 has introduced new concepts, provisions and incentives, which has been welcomed by entrepreneurs across the country albeit with some reservations.

This publication explores the major takeaways from IEA 2020 and the additions made to the previous legislation. To provide the audiences with the overview of the currently guiding industrial law, this write-up studies IEA 2020 from the business perspective.

1. Industrial Registration and Regulation

The impact of Federalism

Registering Authority: Power to Provincial Government

With federalism already being implemented, IEA 2020 has also adopted the principles and has de-centralized the registration process by granting authority to provincial levels for registration, renewal and regulation of all industries except for the following:

Industry listed in Schedule-1 of the IEA 2020,

Industry established with Foreign Investment,

Industry based on subject matter stated in schedule-5 of constitution of