Nepal's IT Industry Registrations See Unexpected Surge
साउन ८, २०८२ १५:५६
Kathmandu: Nepal has witnessed an unexpected rise in the number of registered information technology industries. The growing presence of IT companies, already playing a key role in job creation and foreign exchange earnings, has also generated excitement among business leaders.
According to data from the Department of Industries, 185 IT industries were registered in the fiscal year 2081/82, the highest number so far. In earlier years, registrations in this sector had remained in the double digits. The department recorded 6 registrations in 2077/78, 11 in 2078/79, 16 in 2079/80, and 21 in 2080/81.
Over the past five years, the number of employees in the IT industry rose sharply, from 410 to 3,844. The six industries registered in 2077/78 employed 410 people. The 11 industries registered in 2078/79 had 889 employees, while the 16 industries in 2079/80 employed 896.
In 2080/81, 21 registered industries employed 1,492 people. The following year, 2081/82, saw the highest growth, with 185 industries employing 3,844 individuals, according to the department.
The capital investment also increased significantly. The total capital of the six industries registered in 2077/78 was Rs 800 million. In contrast, the capital of the 185 industries registered in 2081/82 exceeded Rs 1.36 billion.
What caused this sudden growth in IT industry registrations?
Santosh Koirala, President of the Nepal Association for Software and IT Services Companies (NAS-IT), credits recent government policies for the surge. He said that many IT companies with foreign direct investment (FDI) have started registering with the Department of Industries in large numbers.
“Ninety percent of Nepal’s IT companies aren’t registered with the Department of Industries; they’re only listed with the Company Registrar’s Office. But now, the number registered as industries is increasing due to new government incentives for the IT sector. FDI requires approval from the Department of Industries, which makes registration there essential,” Koirala said.
The government declared IT-based industries as “special industries” through the federal budget for fiscal year 2082/83, presented in parliament on 15th Jestha. Alongside this recognition, the government also announced various exemptions for these industries.
Deputy Prime Minister and Finance Minister Bishnu Prasad Poudel introduced a plan offering exemptions on income tax and electricity tariffs to IT-based industries. The scheme provides up to 75 percent income tax exemption on earnings from IT service exports. Moreover, only 5 percent of export income is taxed and this is considered final.
Additionally, the budget for 2080/81, presented by then-Finance Minister Barshaman Pun, had set an ambitious target: IT exports worth Rs 300 billion within 10 years. That budget had also declared the beginning of Nepal’s “IT Decade,” aiming to create 500,000 direct and 100,000 indirect jobs in the sector.
These government moves have prompted many companies to register as industries. “Previously, IT companies registered only as companies were paying 25 percent corporate tax annually. Now, by gaining industry status, they can get up to 75 percent exemption on income from IT service exports. That’s why registration under the industry category is necessary,” Koirala told TechPana.
पछिल्लो अध्यावधिक: साउन ८, २०८२ १५:५६
