Invest in Nepal
Attraction:
Nepal’s potential for investment and trade has been steadily increasing over the years. The country’s diverse geography, abundant natural resources, and young labour force make it an attractive destination for investment in various sectors, including manufacturing, agro-processing, energy, tourism, and other service sectors. In addition, Nepal’s growing middle class population and advantageous location between two rapidly growing economies, India and China, also provides investors with access to a large domestic market and preferential access to neighboring markets.
Institutional Arrangement:
Nepal has a clear investment framework to facilitate investment in the country. Two agencies are dedicated to facilitate investments, including foreign direct investment. The Department of Industry (DOI), under the Ministry of Industry, Commerce and Supplies (MOICS), is responsible for approval of investments up to NPR. 6 billion, while the Investment Board Nepal (IBN), chaired by the Prime Minister, is responsible for investments above this amount.
Policy and Legal Environment:
Nepal government has been working to improve the investment environment by providing incentives and a hassle-free business environment. Nepal has enacted policies and laws to encourage foreign investment and facilitate the transfer of technology, innovation, and managerial capabilities. Nepal has implemented various new policies and laws and revised existing ones to encourage investment.
Key Laws that govern investment in Nepal
The Foreign Investment and Technology Transfer Act, 2019 (2075)
Date of Authentication March 27, 2019 (2075.12.13)
The Industrial Enterprises Act, 2076 (2020)
Date of Authentication: 2076.10.28 (11 Feb. 2020 A.D.
The Company Act, 2006
Date of Authentication November 3 2006 (2063.7.7)
Public Private Partnership and Investment Act, 2019
Date of Authentication: March 27,2019
Income Tax Act, 2002(along with each year financial acts amendments)
Date of Authentication: April 18,2002
Date of Authentication: 11 October,2019
Date Of Authentication: 15 June 2020
(Note: English texts of most laws and regulations related to trade, investment, and business can be downloaded from https://lawcommission.gov.np/en/ )
By enacting policies and laws that facilitate foreign investment and providing incentives and a hassle-free business environment, Nepal is well-positioned to become a hub for production and trade in the region.
Nepal welcome investment in a wide range of sectors:
Nepal allows various categories of FDI, including Greenfield and brownfield investments, and provides incentives such as tax and non-tax concessions to specific industries and sectors. The country has also signed bilateral investment agreements and double taxation avoidance treaties with several countries, demonstrating its commitment to creating a favourable investment environment. FDI is permitted in Nepal for both Greenfield and brownfield projects, subject to the necessary approvals required for new industries. The following categories of FDI are allowed in Nepal:
Procedures involved to FDI approval
Note: Most of these services can now be availed from the OSSC at DOI through online application system: imis.doing.gov.np
To find out more, please visit the links below:
