Exclusive: How Nepali Companies have used FDI to whitewash dirty money (with full report)
January 16, 2019 08:28 PM NPT
KATHMANDU, Jan 16: Nepali business people set up companies in Nepal transfer their illegally earned money to offshore companies set up in tax haven countries and repatriate it to Nepal under foreign direct investment (FDI), a months-long investigation has revealed.
In 2017, the International Consortium of Investigative Journalists (ICIJ) published Panama Papers, which revealed that seven Nepalis including Upendra Mahato, the founder of Non Resident Nepalis Association (NRNA), had invested in countries known as “tax haven”. Following the revelations, we requested to the ICIJ to provide us details of Nepalis named in the report. It led to a formal collaboration between the ICIJ and Centre for Investigative Journalism, Nepal (CIJ).
A few interesting details have emerged after we examined documents from Nepal’s government offices, the materials provided by investigative journalists associated with the ICIJ and their investigations. It was found that in order to evade tax in Nepal or to transfer the illegally earned money, the business people laundered money to tax haven countries that offer minimal tax liability to foreign individuals and businesses. Then, the money was repatriated to Nepal under foreign direct investment (FDI).