Fiscal Nepal
First Business News Portal in English from Nepal
EPF PE VC investment
KATHMANDU: The Government of Nepal is preparing to amend the Employees Provident Fund Act 1962 to enable institutional investments in private equity and venture capital, marking a significant policy shift aimed at deepening the country’s capital markets.
The proposed amendment, led by the Ministry of Finance Nepal, seeks to address three key areas under Section 6(2) of the Legislation Act 2024.
The draft amendment incorporates provisions outlined in the FY 2082/83 budget (Point 330), which calls for allowing major public funds—including the Employees Provident Fund Nepal, Citizen Investment Trust, and Social Security Fund Nepal—to invest in private equity and venture capital funds.
This move is expected to mobilize large-scale domestic savings into high-growth sectors, particularly startups and emerging enterprises.
The amendment also reflects budget provision 350, which introduces a policy framework for investment in housing projects. Under the proposal, EPF would be allowed to:
The objective is to expand access to housing through concessional interest rates and installment-based financing.
The draft law further proposes that EPF can:
Additionally, the fund would be permitted to invest in shares of companies involved in:
These investments could be made in collaboration with the government or government-controlled entities.
A structural change has also been proposed in governance. The draft suggests that the chairperson of the EPF board will be a serving senior government official (gazetted special class) nominated by the Government of Nepal, replacing the existing provision.
According to the ministry, the amendment also aims to update outdated provisions of the existing law and resolve practical issues encountered during the fund’s operations.
If implemented, the reform could significantly transform Nepal’s financial ecosystem by:
The proposed amendment is currently in draft stage and is expected to move forward through legislative procedures in the coming months.
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