Nepal’s parliament on Tuesday passed a bill on Special Economic Zone (SEZ) to attract more foreign investment.

The bill, endorsed on Monday, has made provision of full income tax exemption for five years for the industries operating inside the SEZ, Xinhua news agency reported.

The industries that use at least 60 per cent domestic raw materials will get 50 per cent tax exemption for additional 10 years while others will get additional five-year tax exemption.

The bill will take a form of law after President Bidya Devi Bhandari puts a stamp on it.

The tax on dividends distributed by the company inside SEZ will be exempted for five years, according to the bill.

Value added tax (VAT) of the companies in the SEZ will be fully exempted if goods are exported. They will get discount in customs duty for industrial raw materials imports, according to the bill.

The bill has also banned workers from holding all forms of protests that could affect the production of the factories in the zone.