The government has introduced a provision allowing unregistered industries to complete their registration within a year by paying a certain amount as fine. The Department of Industry has urged such industries to take advantage of this opportunity.

The provision, introduced through an ordinance, applies to all micro, cottage, small, medium, and large industries operating in Nepal without official registration. The ‘Ordinance to Amend Some Nepal Acts Relating to Economic and Business Environment Improvement and Investment Promotion, 2081’ has amended the Industrial Enterprises Act, removing the previous provision that mandated the closure of unregistered industries.

Before the amendment, the Industrial Enterprises Act, 2076 BS, required authorities to shut down industries operating without registration and impose fines. Section 43 of the act stipulated fines ranging from Rs 5,000 to Rs 100,000 based on industry size.

Chandra Prasad Dhakal, president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), stated that the ordinance addresses a long-standing demand of the private sector. "Businesses should operate legally. It is commendable that the government is providing time for industries established and running without registration to formalize their status," he said.

However, the Federation of Nepal Cottage and Small Industries has urged the government to allow registration without fines. Its President, Umesh Prasad Singh, noted that a significant number of industries in Nepal remain unregistered. "Regardless of size, all industries should be given a one-time opportunity to register without penalties," he said.

Singh also highlighted that despite the new provision, many industrialists hesitate to register due to the cumbersome process. "Although the government claims registration is now easier, entrepreneurs still need to visit multiple offices. The process involves obtaining a public bond from the ward office, public hearings, environmental impact assessments, and approvals from seven different agencies," he explained.

According to Singh, the Federation’s data from last year showed that 450,000 industries were operating without registration. Of the 678,000 registered small, micro, and cottage industries, more than 50% have not renewed their registration.

"The government should allow currently unregistered industries, as well as new ones, to register without any fees," Singh suggested. "Entrepreneurs are reluctant to go through a complex process that offers them little immediate benefit." The Federation estimates that about 400,000 entrepreneurs fall under this category.

Fines for Registering Unregistered Industries include Rs 5,000 for small industries, Rs 25,000 for cottage and small industries, Rs 50,000 for medium industries and Rs 100,000 for large industries.