Foreign Employment Share: Clear Information on 10% IPO Quota Reserved Share in Nepal

Foreign Employment Share: Clear Information on 10% IPO Quota Reserved Share in Nepal

In the most recent presentation of the budget for the fiscal year 2079/80, it was stated that any foreign worker who possesses a valid work permit is eligible to apply for an initial public offering (IPO) for the 10% reserve. The purpose of foreign employment share action is to encourage Nepalese workers living and employed in other countries to send money back home in a lawful manner.

Foreign Employment Share

Although it may not be as simple as it first appears to put into action, the government has taken a very positive move in this direction. We hope that they don’t deviate from executing the plan of foreign employment share and that they get things working as soon as feasible. This policy is only applicable to individuals who have been granted work permits by the Government of Nepal; it does not apply to individuals who travel outside of Nepal. For visas to study and other purposes, except visas to work. If Nepalese people living in golf countries send money home through the proper channels, they will reap the most possible benefits from this development.

The Securities Board of Nepal (SEBON) has issued the “Securities Issuance and Allocation (Sixth Amendment) Guidelines, 2022” intending to recruit people who are currently working outside of Nepal into the share market. This was the primary motivation behind the implementation of these guidelines.

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To make it simpler for people working abroad to participate in SEBON’s initial public offering (IPO), the company has provided options for a reservation to those individuals. The rules state that this provision should be considered to be in place as of right now.

This provision was introduced to encourage Nepalese nationals who are currently working outside of the country to send their remittances back to Nepal through the proper channels. If the provisions of offering reservations for IPO to those Nepalis working abroad were put into place, it is anticipated that the amount of money sent back to Nepal through legitimate routes would rise. It is anticipated that this decision will relieve the pressure that has been placed on the country’s diminishing reserves of foreign currency in recent times.

The government decided to implement this policy because the money that was being sent home through remittances was being spent exclusively on the purchase of consumer goods and was therefore being sent back to the country from which it originated. This provision was created by the board at the instigation of the Ministry of Finance in order to make use of the money in the productive sectors and to assist in bolstering the economy of the nation as a whole.

According to the new regulation, the companies that are in the business of issuing initial public offerings (IPOs) are required to allocate 10 percent of the IPOs to Nepalis who have obtained labor permits for employment in foreign countries.

Table of Contents

Benefits of Foreign Employment Share

Foreign Employment Share: Clear Information on 10% IPO Quota Reserved Share in Nepal
  • For those who work outside the home, the upcoming 10% IPO quota of foreign employment share is seen as the most secure option for capital investments.
  • As a result of this foreign employment share policy, individuals who are employed abroad may be encouraged to invest a portion of their income in stocks.
  • Investments made on this primary market are secure and insured.
  • The best investment chances are available to those who are really interested in the stock market.
  • There are excellent possibilities of receiving shares if you apply for an IPO using a remittance account.
  • Implementing this strategy helps to encourage foreign workers to send remittances via legal channels, which benefits the nation’s economy the greatest.
  • It is predicted that if reservation can be made in the IPO for the workers who have left for foreign jobs, remittances through the formal system will rise at a time when the nation’s foreign exchange reserves are diminishing.
  • A total of 3.5 million Nepalese citizens are employed abroad, in accordance with the Nepal Labour Migration Report 2022. Among them, almost 5 lakh individuals—or 15% of all applicants—are submitting IPO applications. This will boost the rate at which IPOs are allocated to foreigners who remit money to Nepal.

A Quick Guide for People Working Abroad on How to Apply for the Foreign Employment Share

During the initial public offering, a quota system was established for Nepalese people who were working outside of the country (IPO). There has been a recent trend in the business world toward the establishment of quotas for employees working overseas. However, due to the unclear application process, many people are confused, even if they have the intention of investing in shares of company stock.

Certain individuals with knowledge of the stock market were operating from locations outside of the country while not making use of any of their quotas. In addition to this, they are interested in learning how the quota can be met. The Securities Board of Singapore (SEBON) reduced the percentage of regular individuals participating in the initial public offering (IPO) and instituted a quota of 10% for individuals who are employed outside of Singapore.

However, the workers who are employed overseas, along with their families, have begun to protest because the relevant agencies have not made the application process sufficiently clear. As a result, we will explain a few things further.

This quota in ordinary shares can only be accessed by Nepalese citizens who have successfully obtained work authorization from the Ministry of Labour. According to SEBON, anyone who wishes to apply for quota shares must first obtain a work permit from the Nepali government for employment in a foreign country. In addition to this, the applicant needs to open a personal remittance account at the bank.

Members who are still in the country but have been granted permission to work in another country can go to a bank and finish the application for a remittance account. The applicant is required to bring along an airline ticket, a passport that has been stamped with a visa, and a work permit.

Similarly, if one has relocated for work to another country, they may want to consider opening a remittance account. At Nepali Bank, customers also have the option of converting their regular savings account into a remittance account. The option to register for a bank account online is available for those interested in this. It is possible to open an account in a short amount of time by going to the website of the relevant bank and making use of the option to register for an account online.

A direct transfer of funds to the remittance account is possible whenever official channels are utilized. In addition to this, the visa stamp and work permit must be scanned and provided in PDF format. The passport must also be scanned. Some financial institutions will go one step further and inquire about the level of income earned by these customers’ preferred places of employment.

This arrangement, which is also mentioned in the budget for the current fiscal year, only applies to individuals who send remittances from official sources totaling NRs 50,000 or more, and only covers those individuals. When compared to the standard term, interest rates on remittance accounts come with a one percent bonus for holders who open new accounts. The annual percentage yield on remittance accounts that are provided by commercial banks is currently 13.13 percent.

The person who is responsible for the matter must apply for a Demat account making use of the remittance account as the basis. It is possible to acquire a CRN (C-ASBA Registration) number by opening a Demat account in the name of the account holder.

Additionally, individuals will be required to fill out an application form for Mero Share that, once submitted, will provide the candidate with a Mero Share login username and password. CDSC has developed an online platform known as Mero Share (Central Depository System and Clearing Limited). This provides details about the transactions made in their Demat account involving shares. A mobile app version of it is also available to users.

After receiving the information regarding the username and password for the Mero share, the applicant in question can visit the website or use the mobile app to apply for the initial public offering of the reserved quota. According to the reports, more than 150 additional remittance accounts have been added to the system as of this point.

Frequently Asked Questions about the IPO for Foreign Employment Share

1. Which are the companies issuing IPO for Foreign Employment Share

Four businesses are currently conducting IPOs for workers who are located abroad. As follows:

Kalinchowk Darshan Limited

Locals impacted by the project and Nepalese nationals working abroad can purchase stock in Kalinchowk Darshan Limited. opened on Mangsir 14 and will close on Mangsir 28 in the year 2079.

Supermai Hydropower Limited

The Illam District residents impacted by the project and Nepalese nationals working abroad will get IPO shares from Supermai Hydropower Limited. The publication will begin on Mangsir 21 and end on Poush 6, 2079.

Super Madi Hydropower Limited

On 20 Mangsir and 5 Poush, 2079, the Super Madi Hydropower Limited initial public offering (IPO) for residents of Kaski District, Pokhara Metropolitan, and Nepalese nationals working overseas will also begin.

Maya Khola Hydropower Company Limited

This initial public offering (IPO) for residents of the Sankhuwasabha District and Nepalese nationals residing abroad will begin on Monday, September 23.

2. Do I need to reapply for a CRN number to be eligible for Nepali migrant IPO or I’m directly eligible for the issue?

You need to have a new CRN number. To apply for the reserved (Foreign Employment) IPO, you must switch your account scheme to a remittance account.

To apply for the reserved (Foreign Employment) IPO, you have submitted the following documentation for the scheme transfer.

  1. Mail a Handwritten application requesting that the bank transfer the following information from your bank account into the account for the remittance scheme, Account name, account number, Demat number, and signature are all required.
  2. Passport
  3. A valid visa
  4. Work Permit issued by the Nepali government
  5. Documents/proof that you have deposited at least NRs. 50,000 through remittance in your account over the last six months.

3. How to get CRN/ASBA/C-ASBA numbers from abroad?

You should be required to apply for a CRN number if you are a new remittance account holder. You must do that by filling out the online CASBA form from your bank, which is accessible on the official bank website. You must mail supporting documents, such as your VISA and your work permit, with your application. After the bank has verified your paperwork and documentation, you will receive a CRN number through email.

4. How to Open Remittance Saving Account?

You must complete the Remittance Savings Account application accessible on the bank’s official website to open one. If you haven’t done so already, you must first fill out the KYC form, which is accessible on the bank website.

Personal identification, such as a passport or proof of citizenship, and recent passport-size photos of the account user are essential papers.

 A declaration of the nominee with personal identification and a PP-sized photograph

 A copy of the VISA along with the passport or work permit (if the account is to be opened by a remitter) and the remittance received slip or any other documents that prove the account holder is involved in foreign employment (if an account is to be opened by family members of foreign employer).

Source of income or wage statement

5. How to renew a work permit to apply for IPO from abroad?

By purchasing term life insurance and welfare funds, paying for a labor permit online, and working abroad, citizens can renew their work permits. This is useful for tourists and others who are not from Nepal.

They can renew their Labor Permit online because they initially received it by having the department’s web system scan their eyes and fingerprints. On the department’s website, www.dofe.gov.np, under the online labor permit, you can fill out the forms for re-employment. After completing the form, you must select the branch from which to obtain a renewed labor permit.

The department has been providing work licenses from Tahchal of Kathmandu, Biratnagar, Janakpur, Pokhara, Butwal, Surkhet, and Dhangadhi. The applicant’s mobile number will receive an SMS with the justification if the request is denied for any purpose during the labor permit process. When filling out the form, the department has asked that you include the right email address and mobile number.

6. How to convert a normal bank account into a Remittance account?

While some banks offer the option to convert regular bank accounts into remittance accounts.  To know further details, you must do that by visiting the bank’s official website where you have an account. After that, you can email them about it and submit your documents via the contact us tab.

The processes and procedures for changing a regular bank account into a remittance account vary depending on the bank. Some banks provide a form where you must fill out the necessary information to change the scheme.

7. Is there a locking period in the 10% IPO Quota of foreign employment share?

As of now, there is no locking period. This 10% IPO Quota is for those citizens who are working outside of the country. The locking period is only for those people who apply to share through the normal account. 

8. I have a remittance bank account, is my previous CRN number is still valid? If not, how do I get the CRN number?

You must have a new CRN number for this. If you already have a remittance bank account, you must mail the CASBA registration form to your concerned bank. The form will be mailed to you, and you must print it off and fill it out with the information necessary. After that, you must send the form picture along with the government of Nepal’s labor permit paperwork and the financial record for the money you have sent via remittance.

9. I have opened a savings bank account from abroad. Can I open a remittance account through the same bank?

You are not permitted to open two accounts with the same bank, according to bank policy. You must either open a new remittance account at another bank or convert your savings account to one.

10. Can I sell the IPO from the remittance account after being registered in NEPSE?

If you apply for a share through an IPO and are approved, the share amount is deposited in your DMAT account, and you need a trading account to sell it.

11. Can I fill out an IPO available to the other public after receiving a CRN number for international employment?

You are not permitted to fill the IPO once it has been made available to the general public. Once you receive a new CRN number and become eligible for the 10% IPO Quota.

12. I am in Nepal and processing for going abroad on a working visa. Can I fill out the recently introduced Foreign Employment Share?

 Yes, you can apply for the 10% IPO quota. The application for a remittance account can be filled out at the bank by members who are still in the country but have been granted authorization to work abroad. A work permit, a passport with a visa stamp, and an aircraft ticket must be carried by the applicant.

13. How many Shares can be applied from the Remittance account?

From your remittance account, you can apply for the minimum 10 kitta shares that have been issued for the foreign employment share.

14. How much unit of share would the foreign employees receive?

For instance, if a business launches an initial public offering (IPO) of 20 lakh unit shares to the general public, two lakh unit shares, or 10% of the total, will be set aside for foreign employees. Additionally, only foreign employees would receive these 2 lakh unit shares, raising the IPO allotment rate.

15. How to fill foreign employment share from Abroad?

Nepalis who have taken jobs abroad must apply for the IPO Meroshare is allocating. However, in order to be qualified, you had to obtain a labor visa from the Nepali government and seek a job abroad. No one without a valid labor permit may apply. In a similar vein, you have to have opened a remittance savings account in your name with any Nepalese bank or financial institution. At least Rs 50,000 must have been transferred into this account in the last six months from the nation where you are employed.

In addition, your DEMAT account should be opened. As well as having a C-ASBA registration number, also known as a CRN number, the bank or financial institution must have opened a remittance savings account.

After doing this, persons who chose to pursue abroad employment can apply for the reserved shares in Meroshare by selecting the “Apply for Issue” option. The IPO can now be filled thanks to MyShare because all the aforementioned steps have been completed. Because it is a savings account, the remittance will only be eligible to apply for this IPO if all the necessary steps have been taken. My share will display “RESERVED (FOREIGN EMPLOYMENT)” next to the shares allocated to Nepalis working abroad.

16. Is a remittance account compulsory for foreign employment share?

In order to apply for foreign employment shares, a person who has moved abroad with a work permit but who previously filled out an IPO using a regular savings account must open a remittance savings account. The account’s CRN number should also be included.

To Conclude,

Although implementation is not as simple as it may seem, this is a really positive move on the part of the administration. We hope they will follow through and get things done as quickly as feasible. The policy of foreign employment share only applies to people who have been granted work permits by the government of Nepal; it does not apply to those who travel abroad on visas for studies or other purposes aside from employment. If Nepali citizens who live abroad send remittances in a legal manner, they will profit the most from this.

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