Nepal is working to attract more foreign direct investment through regulatory reforms and investment summits. The 2019 Nepal Investment Summit highlighted opportunities in sectors like energy, tourism, infrastructure, agriculture and industry. Nepal offers incentives like tax exemptions, land access and visa assistance to foreign investors. However, foreign investment also carries some risks and could impact domestic businesses and currency exchange rates. The government's goals include increasing GDP growth through more foreign capital inflows.
2. -First Foreign Investment.
-Nepal Investment Forum & Summit.
History
-Pros.
-Cons.
Impact of FDI in Nepal
- Overview of Nepal
- FDI.
Introduction
-Regulatory Framework
- Survey and results.
Nepal FDI
Nepal Investment Summit 2019
3. Nepal
GDP
US$ 30 bill
Growth Rate
6.3 %
Per Capita
US$ 1004
Area
147181 sq.km
Population
29.1 million
Form of Govt.
Federal Republic
Federalism
Divided into 7
provinces
4. • A foreign direct investment (FDI) is an investment in the form of a controlling ownership in
a business in one country by an entity based in another country
• It includes mergers and acquisitions, building new facilities, reinvesting profits earned from overseas
operations, and intra company loans
5. The first official record of FDI flow to Nepal was in 1951/52 when the Nepal Commercial
Corporation was set up as a joint venture with 67 percent equity participation from Indian
investors (Aryal, 2009).
First Foreign Investment
Nepal Investment Forum & Summit
Nepal Investment Forum was organized in 1992 in Kathmandu, which was a very
successful in attracting the foreign investors (Department of Industry, 2005).
The Government of Nepal organized Nepal Investment Summit on 2-3 March, 2017. This
summit observed the USD 13.74 billion investment commitment to ten sectors from 26
companies of eight countries.
6.
7. Regulatory Framework
Survey and Results
Nepal Foreign Direct Investment
• Legal Framework
• General Regulatory Arrangement
• Institutions
• FDI Approval Procedure
• Nepal Rastra Bank Survey
• Results
8. Nepal include Foreign Investment and Technology Transfer
Act (FITTA), 1992, Foreign Exchange (Regulation) Act, 1962,
Investment Board Act, 2010, Industrial Enterprises Act, 2016,
Company Act, 2017, Investment Board Act, 2011, Contract
Act, 2000, Arbitration Act, 1999, Income Tax Act, 2002, Labor
Act, 2017, and Privatization Act, 1992, Electricity Act, 1992,
Nepal Petroleum Act, 1983, Private Investment in
Infrastructures Act, 2006, Mines and Mineral Resources Act,
1985, Bank and Financial Institutions Act, 2017,
.
Legal Framework
Taxation, Foreign Exchange Arrangement,
Labor Regulation
, Land Regulation, Intellectual Property Law,
Dividend Repatriation
General Regulatory Arrangement
03 02 01
Institutions
Dept. of Industry (DOI),
Investment Board of Nepal (IBN),
Nepal Rastra Bank (NRB)
Regulatory Framework
10. Survey
FDI Position in 2015/16
June,2018 Report
Nepal Rastra Bank
AWESOME
PRESENTATION
Results
11. SURVEY
The FDI survey is one of the surveys conducted by
NRB. The FDI enterprises are categorized into three
groups, large, medium and small based on capital.
Population of survey=252,
Large group =29
Medium group =40
Small group =183.
In terms of equity capital, these three groups
constitute
Large =85%, Medium=7.6 % Small=7.4 %
The selected firms’ capital (Rs. 102.85 billion) is 96.9
percent of total (Rs. 106.17 billion).
12. RESULTSS.N. Countries Agriculture Industry Service Total
1 West Indies - - 62,779.7 62,779.70
2 India 104.4 16,904.9 10,244.8 27,254.10
3 China - 9,200.9 1,643.2 10,844.10
4 Singapore 113.2 6,286.1 735.6 7,134.90
5 Ireland - - 5,805.3 5,805.30
6 Australia - - 3,831.6 3,831.60
7 South Korea 15.9 2,769.5 119.2 2,904.60
8 Bangladesh - - 2,509.9 2,509.90
9 UK - 222.9 2,107.9 2,330.80
10 USA 127.1 784.7 1,415.8 2,327.60
11 Others 34.50 4448.80 5472.70 9955.80
Total 395.2 40,617.7 96,665.5 137,678.40
Rs. MillionAs on Mid- July ,2016RESULTS
13.
14. Synops
is
Inaugurated by
Hon’ble Prime
Minister &
addresses by
prominent leaders
from business
communities.
4 plenary sessions
that discussed on
policies &
prospects of
investments.
6 sectoral parallel
sessions.
36 Bilateral
Meetings with
Hon’ble Prime
Ministers &
Ministers
More than 39 B2G
& more than 30
B2B meetings.
15.
16. Why Invest in Nepal ?
Policy Reforms
• Introduction of many legal forms
• Provision of one Stop Service Center
• Introduction of online registration and
payment
Access to Markets
• Market access to India & China
• Access on textile items to US
through TIFA
• Member of WTO, SAARC, BIMSTEC
Few Competitors &
Vibrant Market
• Limited competition due to few
prominent foreign players
• Rapidly growing consumer base.
Infrastructure
Development
• Power sufficiency, New Projects
• SEZs, Cross Border Economic
Zones
• Industrial Districts, Village ,
Corridors, Product Specific Industrial
Area.
Young & Energetic
Human Resources
• Young, energetic, educated & trained
work force
• 61% between ages 15 and 65.
FDI
• 100% ownership in all sectors
• Easy entry , operation, repatriation &
exit of investment.
VISA
• Non-tourist visa of 6 months for R &
D, survey for foreign investors.
• Business visa to foreign investors,
representatives & family members
during investment period.
DTAA & BIPPA
• DTAAs with 11 countries & BIPPAs
with 6 countries.
• Additional Agreement with Potential
Countries in Pipeline.
Trade Connectivity
• Additional Port facility exploration.
• Railways Transportation under
progress.
• Transport transit agreement with
China.
• MOU on BIMSTEC interconnection.
17. Nepal Investment Summit
,2019
SectorsObjective
-To project Nepal as favorable
investment destination.
-Unveiling opportunities for
investment in various sectors.
-To unfold policy reforms to
attract investors.
-To provide platform for Global
Investors to deepen their
understanding of investment.
-Energy
-Info Communication &
Tech(ICT)
-Tourism
-Industry
-Transport Infrastructure
-Agriculture
Target Audience
-Investors (Foreign , NRN,
Domestic)
-Development Partners
-Diplomatic Missions.
-Government Representatives
-National & Intl. Media
-Experts
-Other relevant stakeholders
18. ENERGY
ICT
Areas for Investment
• Hydropower
• Solar Energy
• Wind Energy
• Biomass
• Geothermal
Areas for Investment
• ITE’s & BPO
Services
• Software
Development
• Mobile Application
• Digital Content
Development
• ISP
• Online Payment
Services &
Infrastructure
Ongoing Government Projects:
• National ID System.
• Government Cloud.
• Digital Education System.
• Smart Cities.
• Optical Fiber.
• Single window system for Trade Facilitation.
Some important facilities:
• Sole or JV Investment.
• Nominal Royalty to be paid to Govt.
• Guaranteed water rights.
• Lease arrangement for public land.
• VAT exemption & 1% custom duty on import of construction
equipment.
• Exemption of 100% income tax for first 10 years and 50% for
next 5 years.
19. TOURISM
INDUSTRY
Areas for Investment
• SpiritualReligious:
• Recreation:
• Education, sports &
health
• Civil Aviation:
• Mice Tourism
Recent Developments:
• Upgradation of Airports – International & Domestic.
• Upgradation of Highways.
• Development of Ramayan & Asian Buddhist Circuit
pilgrimage sites connecting India & Nepal.
Areas for Investment :
• FMCG’s
• Garments
• Cement
• Pharmaceuticals
• Metal & metal products
Tax Incentives ( Industry )
• 100% (1st 10 Years) & 50% (next 5 Years): Energy Industry,
Inside SEZ ( Mountain & Hilly areas).
• 100% (1st 5 Years) & 50% (next 3 Years) : Mining ,Tourism &
Aviation, Inside SEZ (other areas), Industries with Capital 1
Billion & Employment 500 persons.
20. TRANSPORT
AGRICULTU
RE
Areas for Investment
• Roads
• Railways
• Waterways & Cable Cars
• Aviation
• Mass- Transport
Potential Projects:
• North –South Corridors ( Road- 8 Projects)
• Kathmandu – Terai Fast Track
• Biratnagar, Dhangadi, Nijgadh International Airport
• Koshi, Gandaki & Karnali rivers connecting India
• Cable Cars- Jomsom, Muktinath, Annapurna-Sikle, Khaptad
etc.
Areas for Investment
• Fertilizer industry
• Infrastructure
• Agricultural Machines,
Tools and Technology
• Agricultural Financing
• Seed production
• Processing industry
• Organic Farming
Incentives :
• 40% tax exemption for fruit based brandy, wine,cider-
producing industries at under developed areas for 1st 10
year
• VAT Exemption facility for agro-based storages
• 50% Vat square off facility for mustard oil and Vanaspati
ghee producing industry, dairy industries & tea producing
industry
• 70% VAT Square off facility for sugar producing
industries
• Exemption in income tax and dividends for industries
established in SEZ’s.
27. IMPACT OF FDI IN NEPAL
PROS
Makes international
trade easier to
complete.
Foreign income can increase
Improves human resources. Provides a foreign company
with needed experience.
Creates new
opportunities for
workers
Provides local
economic benefits in
multiple locations.
