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2007 Assessment

Nepal: Integrity Indicators Scorecard

Nepal: Integrity Scorecard Report > Sub-Category: Business Licensing and Regulation
Indicators   Score
67 Are business licenses available to all citizens? 75
68 Are there transparent business regulatory requirements for basic health, environmental, and safety standards? 0
69 Does government effectively enforce basic health, environmental, and safety standards on businesses? 0

Indicator and sub-Indicator Details

67 Are business licenses available to all citizens?
 
  67a: In law, anyone may apply for a business license.
 
Score: YES  NO score
  Comments: Freedom to practice any profession or to carry on any occupation, industry or trade is protected as a citizens' fundamental right in Nepal. No law categorically excludes any citizen or group from practicing a profession of their choice.

References: The Interim Constitution of Nepal, Article 12 (2) (F)

Peer Review Comments: Article 12 (3) ( F) of the Interim Constitution of Nepal, 2007

Peer Review Comments: Citizens have freedom to whatever economic activities they want. The privatization act has encouraged it. After adopting a liberalization process, the de-licensing process can be found effective. It encourages citizens who do productive activities for economic growth and development.

  67b: In law, a complaint mechanism exists if a business license request is denied.
 
Score: YES  NO score
  Comments: So far as the companies are concerned, the Company Board hears the appeal if the Office of the Company Registrar refuses to register a company. Similarly, there are provisions in the prevalent Nepalese laws for other businesses also. Furthermore, citizens may invoke the extra-ordinary jurisdiction of the Supreme Court or the Appellate Courts if no formal mechanism is available.

References: Company Act 2006

  67c: In practice, citizens can obtain any necessary business license (i.e. for a small import business) within a reasonable time period.
 
Score: 100  75  50  25  0  score
  Comments: The laws prescribe the set timeline. A license can be obtained within a reasonable period of time normally. However, some licenses may be delayed depending upon the case.

References: Laws relating to Trade and Industry

  67d: In practice, citizens can obtain any necessary business license (i.e. for a small import business) at a reasonable cost.
 
Score: 100  75  50  25  0  score
  Comments: A formal application, a recommendation from the local authority and prescribed fees, etc. are required in order to obtain the license. The applicant must appear before the concerned office, which may involve extra bit of financial burden.

References: Laws relating to Trade and Industry

Peer Review Comments: Political power may play a role in this process. Those who have strong political influence may get the license quite easily whereas commoners without any political affiliation may face difficulties to obtain the license.

68 Are there transparent business regulatory requirements for basic health, environmental, and safety standards?
 
  68a: In law, basic business regulatory requirements for meeting public health standards are transparent and publicly available.
 
Score: YES  NO score
  Comments:

References: A person seeking a license is required to obtain a recommendation from a local authority, an assessment, feasibility reports and, in some cases, meet certain regulatory requirements, such as health, safety and environmental standards. However, these documents may not be available to the public, or otherwise transparent. A person seeking the license may have to knock on many doors. Most people come to know about the whole process only after they have successfully registered the business.

Peer Review Comments: A minimum business environment is mandatory as a labor right and as a corporate social responsibility. Therefore, a regulatory mechanism is necessary.

  68b: In law, basic business regulatory requirements for meeting public environmental standards are transparent and publicly available.
 
Score: YES  NO score
  Comments: .

References: A person seeking a license is required to obtain a recommendation from a local authority, an assessment, feasibility reports and, in some cases, meet certain regulatory requirements, such as health, safety and environmental standards. However, these documents may not be available to the public, or otherwise transparent. A person seeking the license may have to knock on many doors. Most people come to know about the whole process only after they have successfully registered the business.

  68c: In law, basic business regulatory requirements for meeting public safety standards are transparent and publicly available.
 
Score: YES  NO score
  Comments:

References: A person seeking a license is required to obtain a recommendation from a local authority, an assessment, feasibility reports and, in some cases, meet certain regulatory requirements, such as health, safety and environmental standards. However, these documents may not be available to the public, or otherwise transparent. A person seeking the license may have to knock on many doors. Most people come to know about the whole process only after they have successfully registered the business.

69 Does government effectively enforce basic health, environmental, and safety standards on businesses?
 
  69a: In practice, business inspections by government officials to ensure public health standards are being met are carried out in a uniform and even-handed manner.
 
Score: 100  75  50  25  0  score
  Comments: Businesses are inspected by the government, however, the government significantly lacks a uniform procedure. It largely depends upon the discretion of the inspector, whose approach may be inconsistent and arbitrary at times. Bribes are often offered for favorable treatment.

References: Business regulations; Media reports

Peer Review Comments: It is a legal provision. In practice, it is inconsistent and irregular. The inspection is found totally ignorant because of the ineffective implementation of laws. However, the report is very up-to-date, because the inspectors are corrupt.

  69b: In practice, business inspections by government officials to ensure public environmental standards are being met are carried out in a uniform and even-handed manner.
 
Score: 100  75  50  25  0  score
  Comments:

References: The process is not at all transparent in Nepal.

Peer Review Comments: It is not transparent on the basis of news reports. The inspection is a just provision, but it is not effective in practice. Ridiculously, a positive report is submitted by the inspector.

  69c: In practice, business inspections by government officials to ensure public safety standards are being met are carried out in a uniform and even-handed manner.
 
Score: 100  75  50  25  0  score
  Comments:

References: The process is not at all transparent in Nepal.

Peer Review Comments: Although inspections are done, it is not transparent. The government officials, who is deputed for inspection are mostly bribed and the entire process is non-transparent due to lack of specific mechanism to monitor the inspection.

Peer Review Comments: It is done only for fulfillment of the government provisions.

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