The Government of Nepal has decided to withdraw the proposed 1% share transfer fee included in the draft Companies Act 2083 after facing widespread criticism from investors and capital market stakeholders.

The proposal, introduced by the Ministry of Industry, Commerce and Supplies, was included in the draft bill released for public consultation. However, concerns that the additional charge would increase transaction costs and discourage investment prompted the ministry to reconsider the provision.

Under Section 89 of the draft Companies Act, shareholders transferring or purchasing shares worth Rs. 2.5 million or more would have been required to pay a 1% share transfer fee while recording the ownership change at the Office of the Company Registrar.

The proposed fee triggered strong opposition from investors, stockbrokers, and market participants, who argued that it would effectively impose an additional financial burden on share transactions beyond existing taxes and brokerage fees.

Responding to the criticism, the ministry has now decided to remove the controversial provision from the draft law before it is finalized. The decision has been welcomed by the capital market, with stakeholders saying it will help preserve investor confidence and prevent unnecessary costs in Nepal's secondary stock market.

The withdrawal of the proposal also reflects the government's willingness to revise policy measures based on public feedback, particularly those with significant implications for investment and capital market development.