Nepal is a country with a deep connection to its diaspora, especially Non-Resident Nepali (NRN) citizens. Many NRNs, who live abroad, often consider investing in property in Nepal to stay connected to their roots, generate passive income, or prepare for a future return to the country. However, the legal framework surrounding property ownership for NRNs in Nepal is often unclear, leading to confusion among potential investors.
In this blog, we will explore the legalities surrounding property ownership for NRNs, the types of property they can purchase, and the necessary steps to ensure that the process is smooth and hassle-free.
What is an NRN?
A Non-Resident Nepali (NRN) is a Nepali citizen who lives outside of Nepal for employment, business, or other purposes but still retains their Nepali citizenship. In 1997, the Nepalese government formally recognized the NRN community, and the Non-Resident Nepali Act was passed to protect their interests and ensure they could continue contributing to Nepal’s development.
Can NRNs Buy Property in Nepal?
Yes, NRNs are allowed to buy property in Nepal. However, there are certain conditions and restrictions that apply to property ownership for NRNs, which are different from those that apply to Nepali citizens living within Nepal. Here’s a breakdown of the key points:
1. Types of Properties NRNs Can Buy
NRNs can purchase both residential and commercial properties in Nepal. The property can be:
- Residential Property: Houses, apartments, or land for residential purposes.
- Commercial Property: Land or buildings for business, rental, or investment purposes.
- Agricultural Land: NRNs are allowed to buy agricultural land, but this is subject to certain restrictions.
2. Restrictions on Agricultural Land
Under the Foreign Investment and Technology Transfer Act of Nepal, NRNs are restricted from purchasing agricultural land if they are not directly involved in farming or agriculture-related businesses. The rationale behind this is to prevent non-Nepali entities or individuals from owning large chunks of agricultural land, which could affect the country’s food security and economy.
However, NRNs can buy agricultural land for commercial purposes, provided they meet specific requirements such as involving in agriculture-related business ventures (e.g., organic farming or agribusiness).
What are the Legal Requirements for NRNs Buying Property in Nepal?
While NRNs can legally purchase property in Nepal, they must follow the necessary legal procedures. Here are the key steps NRNs must follow to buy property in Nepal:
1. Obtain a Citizenship Certificate or NRN ID Card
NRNs must possess either a Nepali Citizenship Certificate or an NRN ID card. The NRN ID card is issued by the Non-Resident Nepali Association (NRNA) and acts as proof of their non-resident status. This card is essential for all legal transactions related to property, including buying or selling land or buildings.
2. Verify the Property’s Ownership
Before purchasing property, NRNs must verify the ownership status of the property. It’s essential to ensure that the property is not encumbered by legal disputes, debts, or mortgages. The Lalpurja (land ownership certificate) is a crucial document that verifies the ownership of the property. NRNs should verify the Lalpurja at the local Malpot Office (Land Revenue Office) to ensure the property is free of disputes.
3. Complete the Registration Process
The final step in purchasing property is to officially register the land or house with the government. This process involves submitting the necessary documentation, including the following:
- Property ownership documents (e.g., Lalpurja or Title Deed)
- Tax clearance certificates proving that the land’s taxes are up to date
- Citizenship certificate or NRN ID card
- No Objection Certificate (NOC) from the Ministry of Land Reform and Management (if applicable)
Once all documents are submitted and verified, the Land Revenue Office will process the registration. The property transfer will be recorded in the land registry under the new owner’s name.
Documents Required for NRNs to Buy Property in Nepal
When NRNs buy property in Nepal, they must ensure they have the following documentation:
For Individuals:
- NRN ID Card or Nepali Citizenship Certificate.
- Copies of the Property Ownership Certificate (Lalpurja).
- Tax Clearance Certificates: Proof that the property taxes are up to date.
- Property Valuation Certificate: A document that shows the estimated value of the property.
- No-Objection Certificate (NOC): This is especially required when purchasing land, particularly agricultural land, from the Ministry of Land Reform and Management.
- Power of Attorney (if someone else is representing the NRN): If the NRN cannot be present in person for the transaction, a Power of Attorney letter is required to authorize someone to complete the property transaction on their behalf.
For Companies (If Buying Property via an NRN-Owned Business):
- Company Registration Documents.
- Board Resolution Authorizing the Purchase.
- Tax Clearance Certificates of the Company.
- NRN’s Citizenship or NRN ID Card.
- Land Ownership Documents of the Property.
Special Considerations for NRNs Buying Property in Nepal
1. Currency Exchange and Payment Process
NRNs are allowed to purchase property in Nepal using foreign currency, but it must be converted into Nepali Rupees (NPR) for the transaction. The exchange process must be conducted at a licensed bank or financial institution. When paying for the property, the exchange must be transparent, and proper records must be kept to avoid future legal issues.
2. Inheritance Rights
NRNs can also inherit property in Nepal. If an NRN inherits land from a relative, the property transfer follows the same process as a standard purchase. The inheritance must be legally documented, and a legal heir certificate is required to facilitate the transfer of ownership.
Can NRNs Sell Property in Nepal?
Yes, NRNs can sell property in Nepal, subject to the same legal requirements as for purchasing property. If they sell the property, they must follow the proper procedure of registering the sale with the Malpot Office and ensuring all taxes and fees are paid before transferring the property title to the buyer.
Conclusion
Investing in property in Nepal offers NRNs the opportunity to stay connected with their homeland while also securing a stable asset for the future. With the right legal steps, NRNs can enjoy the benefits of property ownership in Nepal, whether it’s for personal use, rental income, or long-term investment.
However, it’s crucial to ensure that all legal requirements are met before purchasing property. From verifying ownership to completing the registration process and adhering to regulations on agricultural land, NRNs need to be well-informed to avoid any future complications.
If you’re an NRN interested in buying property in Nepal, it’s advisable to consult with a local real estate expert or lawyer to ensure that the entire process runs smoothly and that all necessary legal procedures are followed.
