Ease Investment

On Sunday, Nepal's 3rd Investment Summit started in Kathmandu, pulling together scores of global investors desirous of pouring their money in untapped areas of development. Poised to achieve rapid economic growth, the nation has created environment conducive to the domestic and foreign investment. Prime Minister Pushpa Kamal Dahal Prachanda, while inaugurating the two-day Summit, underscored that Nepal has emerged as a premier investment destination, providing boundless opportunities for foreign investors. The Prime Minister observed that our unwavering commitment to liberal economic policies lays the foundation for a vibrant and investor-friendly business environment. No doubt, the summit has put the country in the global limelight, inspiring investors to explore potential for investment here.

With the adoption of liberal economic policy since 1990, Nepal, located between two economic giants, offers huge opportunities for the potential investors. Of late, the government has amended eight different laws governing business and investment regime, thereby facilitating the smooth flow of foreign direct investment (FDI) in the country. It has endorsed the framework of Bilateral Investment Agreement (BIA) to protect and promote bilateral investment. It has provisions of rational and non-discriminatory treatment to all FDIs and guaranteed repatriation in foreign currency.  “We are strongly committed to carry out continuous reforms to facilitate the investors, industrialists, innovators and easing of doing businesses," said the Prime Minister in a bid to boost the investors’ confidence to invest in Nepal.

Although there is a coalition government, the country has experienced stability and policy consistency. The three layers of government have embraced balanced development policy, accentuating the economic transformation. The growth and prosperity is possible when the foreign investors set up their enterprises and business here without any hindrance. Taking the investors' concerns into account, a number of incentives have been introduced to attract them. They include competitive corporate taxation, avoidance of double taxes, effective regulatory framework and protection of intellectual property rights. These legal tools make sure that investors operate their businesses efficiently and face no obstacles to take their profits back home.

There are other upsides that encourage the potential investors to invest here. Around 60 per cent of population belongs to working-age group while the rising middle-class fuels consumer-driven economic growth. It has skilled workforce that is cheaper compared to other developed and developing countries. At one stage, developed nations capitalise on the cheap labour cost that makes products competitive in the market. It has been global trend that multinational companies opt to open their plants in countries where labour cost is fairly low and taxation system is business-friendly. 

Likewise, the country has diverse sectors with huge investment potentials such as hydropower, tourism, ICT, manufacturing, agriculture, readymade garments and infrastructure. Despite huge prospect of electricity generation, the country is able to produce only 3,200 megawatt and around 5,568 MW large scale power projects are under construction based on Public-Private Partnership (PPP) modality. Nepal has reached the electricity trade agreement with India, the cooperation agreement with China and the electricity export agreement with Bangladesh. Works are underway to build cross-border transmission line connecting India and China, which will facilitate energy exchange within the region. The Prime Minister has called on the investors to invest in hydropower sector, which will not only make the country an energy hub but also greatly promote clean energy that can substitute petroleum import, benefit the environment and save billions being spent on fossil fuel imports.