New criteria for establishment of Motor cycle Assembling Industry in Nepal

March 22, 2023

Government has brought a new criteria for establishment of Motorcycle Assembling industry. The new criteria was brought on 3rd November 2021, named as 'conditions for the establishment of motorcycle assembling industry by importing CKD'. This rule was brought by the Department of Industry which is under Minstry of Industry, Commerce and Supplies. 

This article intends to provide the information about the new conditions for the establishment of Motorcycle Assembling Industry and to be familiar with the terminology like CKD (completely knocked down) and CBU (Completely build unit).

CKD and CBU 

CKD (completely Knocked Down) means rather producing product in own country, it is delivered in parts and assembled. This terminology was originated in automobile industry where the several parts are delivered from worldwide suppliers and assembled in import country. The term CKD is also used in machine construction and other industry sections. Aside from CKD, there is Semi Knocked down (SKD), Medium Knocked down (MKD) and Partly Knocked Down.

CBU (Completely built unit), is a process where cars and bikes are bought in a ready shape for its sale. High ends cars and bikes are bought in the country as completely built units. Huge amount of products are imported as CBU, due to the size and weight of these units they are brought through sea routes and air routes are not feasible. Therefore, due to these reasons Nepal cannot set forth the idea of completely built unit. So, government has brought new conditions or criteria for establishment of Motorcycle Assembling Industry by importing CKD (completely knocked down).

Conditions for establishment of the Motorcycle Assembling Industry by importing CKD are as follows;

1. A domestic Value addition of at least 10 percent in the first year and at least 30 percent by the end of five years.

2. An employment of at least 50 direct employees in the first year and at least 200 direct employees in the five years.

3. At least 10 percent domestic material content within five years.

4. An examination in regard to environment and safety would be done by the committee including relevant stakeholder agencies such as the department of environment, department of transport management, and department of industry , etc.

SADA Associates provides expert services in the field of Business Taxation in Nepal, Foreign Direct Investment (FDI) in Nepal,  Intellectual Property Registration in Nepal, Employment and Immigration in Nepal, Dispute Resolution and Arbitration in Nepal, and Corporate and Commercial compliance and regulatory matters in Nepal. For more information Contact us. 

Please note that this guide is published for general information only and should not be considered legal advice. You are requested to seek legal advice for specific factual situations. Please note that copyrights for this article vests on Sada Associates.