“Investing in Nepal is risk free”

Capacity and Willpower

There are immense opportunities waiting for investment to uplift the living standard of 30 million honest and hardworking people. The Government is stable and remains fully committed to protecting investments with assured profit.Nepal must prosper and it can prosper. The vision for development has found place in over 75 viable projects in different sectors that will be presented to participants during the course of the Summit.

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The promulgation of the democratic and progressive constitution in 2015 and successful holding of elections of all three tiers of the federal setup has effectively ended the protracted political transition, and has fostered a sense of high optimism in Nepali people. An optimism that the long-cherished dream of socio-economic transformation can now become a reality. An optimism that country’s development is possible in this generation, and that [the slogan] ‘Prosperous Nepal, Happy Nepali’ is not a far-fetched fantasy but an attainable vision.

The democratically elected government has both capacity and willpower to steer the development process. The constitution is flexible to accommodate the genuine aspirations of the entire Nepali people. [The Government] has been able to bring a force that until recently remained outside into constitutional fold. In Nepal, there is no place for violence. Any attempt to disrupt law and order will be firmly and resolutely dealt with as per law.

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Nepal has had a history of success in political change and failure in institutionalising it. Now the things have changed. We have institutionalised the achievements and brought stability.Political stability, which is the key prerequisite to economic growth, is absolutely fulfilled now.

Together with political stability policy consistency is ensured. Legal, institutional and procedural reforms that were long overdue has gained speed. The past one-year has been the base year for policy and legal reform. Many new laws have been drafted translating the provisions of the new constitution into legal and institutional framework. The new framework hasalso created conducive environment for foreign direct investment, among others.

Economic Transformation

Political transformation alone cannot be enough and sustainable without economic transformation.If we could successfully steer country’s historic political transformation, there is no reason why we cannot do the same in the economic realm. The central task before us is to undertake rapid economic transformation, and the immediate goal is to graduate from Least Developed Country status and the medium term goal is to become a middle-income country and achieve the Sustainable Development Goals by 2030. 

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PM KP Oli inaugurates the Investment Summit at Hotel Soaltee, Kathmandu, on Friday. Photo: World Bank Nepal / Twitter

To realize this, we need to attain double-digit growth over the next years. A tentative estimation by the National Planning Commission is that the country would require an investment of over 98 trillion Nepali rupees (about USD 88billion) over the next five years. Domestic resources alone will not be sufficient to meet this requirement, and there is a need for huge investment.

The economic policy and its orientation is explicitly spelled out in the Constitution which is premised on the realisation that growth and prosperity is possible only through partnership between and development of public, private and cooperative sectors.

Good Governance and Rule of Law

Investment requires transparent and responsive governance and rule of law. With elected representatives in all levels of our federal set up, governance attributes are improving. There is already healthy competition among the provinces and local governments on incentivising investment and getting more of it.

[The Government] has absolutely zero tolerance on corruption. Good governance is essential for economic development and prosperity. We are committed to promote free and fair competition among private sector stakeholders. We have taken firm stand against cartels and syndicates.     

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In the past few months substantial progress has been made in improving the investment climate in the country. A sound regulatory framework has been established with the enactment of two key legislations: the Foreign Investment and Technology Transfer Act; and the Public-Private Partnership and Investment Act. The latter provides one-stop service for any foreign investment of over NPR 6 billion or a hydropower project of over 200 MW capacity.

The Foreign Investment and Technology Transfer Actensures national treatment for any foreign investment. An automatic route system has been introduced to keep the foreign direct investment related processes simple and predictable, and repatriation is guaranteed on the earning or equity.

Nepal has recently implemented a universal, contribution-based social security scheme that will have a transformative impact on the country’s socio-economic landscape. The scheme, which covers medicare facilities, safe motherhood, and accidental and old-age security of workers, does not only buttress the foundation of a welfare society but also ensure better and healthier industrial relations, which will contribute to conducive environment for investors.

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The reform drive has gone well beyond this regulatory framework, and is marked by the strengthening of institutions, building capacity, streamlining and simplifying processes and procedures.Statutory provisions pertaining to land acquisition, company registration, environmental assessment and infrastructure development have been relaxed and simplified. Online registration and payment systems will soon be upgraded to full automation.

Nepal will actively pursue bilateral investment protection agreement with friendly countries that will further ensure protection for foreign investment. Negotiations will be conducted with interested countries to avoid double taxation so as to provide further incentives.The next reform cycle will involve policies and comprehensive legislation in the field of intellectual property rights commensurate with Nepal’s rights and obligation under various multilateral instruments.

Economic policy

Nepal is one of the most flexible countries when it comes to economic policy and welcoming foreign investment. All sectors, barring a narrow box of sensitive areas, are open for foreign investment. And, 100 percent investment is allowed in almost all areas. There is attractive incentive package in terms of corporate taxation, import duties and export facilitation. Tax rates are predictable and tax holidays are guaranteed by law for those industries that meet established criteria.

Nepal has a huge demographic dividend with about 57 percent of population representing the working-age group. The labour cost is competitive and low, and there is a good pool of English-speaking population specially amongst the youngsters. Policies and programmes have been developed to enable Nepali youth to be multi-skilled. Qualified and skilled manpower is available at reasonable cost locally, to make will make your investment less costly.

Sound macroeconomic indicators have been maintained, hence investing in Nepal is risk free.An independent judiciary, capable of adjudicating industrial and investment related disputes on a fast-track basis, has been the mainstay of our legal system.


Building infrastructure is the Government’s priority and the commitment is well reflected in the progress made in the sector of vital infrastructure. Almost round-the-clock electricity supply has been guaranteed for industries and the country will soon witness a power surplus. Road connections within the country and cross-border connectivity have improved substantially. The strategic Kathmandu-Terai Fast Track that was just a dream a few years back is now becoming a reality.   

Nepal’s Special Economic Zones have both infrastructure and other amenities

to set up industries. One such SEZ is already in operation while several others are being developed in different parts of the country. The Special Economic Zone Authority Act has been revised recently to improve conditions for investment and operation of industries. 

With Nepal having established a federal system of governance, the aim is to undertake a balanced development approach so that all the provinces get fair opportunities for the development of their industrial base with foreign investment. Guided by this spirit, the Government has decided to establish at least one industrial estate in each province. Likewise, with a view to promoting small and medium-size enterprises, one industrial village each will be established at the local level.

Location and Connectivity

Investors know better than others, about the importance of location.Nepal’s strategic location between the world's two largest markets with increasing purchasing power, China and India, serves as a compelling incentive for investment. Nepal enjoys access to both markets on preferential terms.

With India, Nepal has duty free arrangements for most of its products, both primary and industrial goods, while China has granted a significant number of tariff lines duty free access to its market. Beyond the neighbourhood, export from Nepal is entitled to various kinds of duty-free and preferential schemes put in operation for the group of least developed countries. The size of the domestic market is also expanding along with the growth of middle class and the people’s purchasing power. 

The connectivity disadvantage Nepal has had is gradually dissipating because of the efforts at connectivity diversification as well as support from our friendly neighbours. Road, rail, waterways, airways and transmission-ways are covered within the framework of multi-dimensional connectivity network with both neighbours.

Port access has improved, with Nepal having started utilising the Vizag Port of India for its trade and transit two years ago. Availability of a modern alternative port has helped reduce hassles at the crowded Kolkata/Haldia port. The Digital Tracking and Transshipment Systems introduced recently has eased the transportation process. A new transit route through use of inland waterways is under progress, which will connect landlocked Nepal to the sea. 

Transit procedures are being simplified through the use of modern technology and this will surely reduce the cost of business. Nepal ahs signed a Transport Transit Agreement with China and a Protocol to the Agreement will be signed soon. This will enable Nepal also to use Chinese territory and port facilities for its international trade and transit.

Hydropower, Tourism and Agriculture

When it comes to investment, hydropower could be a prime choice (for investors). There are other potential areas: agriculture, manufacturing, tourism, infrastructure, information technologies, mines and minerals, to name a few.

The Government’s target is to generate 3000MW power in three years, 5000MW in five years and 15,000MW in ten years. While domestic consumption will gradually increase with the rapidindustrialization drive, the prospect of regional electricity market is also coming to fruition with a positive initiative recently taken by India.

Work is also being done on the infrastructure foundation of cross border transmission lines. A robust master plan for such transmission line requirement is already at hand, which will guide our future course of action. The recently concluded MoU on the BIMSTEC Grid Interconnection has opened up the possibility for cross-border power trade in BIMSTEC region. Meanwhile, Nepal and Bangladesh have also signed the MoU on Power Trade.

These developments make Nepal’s hydropower more and more investment-worthy. Converting water into wealth is, therefore, a not-to-be missed opportunity.

Tourism is another important sector for investment. Nepal has matchless natural beauty and incredible cultural treasures.  Natural and cultural diversity make Nepal a tourist paradise round the year. 2020 is being celebrated as the Visit Nepal Year, and the intention is to attract more than 2 million tourists a year.  Nepal seeks investment for upgrading tourism infrastructure, including hotels and resorts.

Agriculture has huge potentials for development. As Nepal moves from subsistence level to a commercial agriculture through modernisation, huge investment will be required. Nepal wants to enhance productivity of agriculture while reducing people’s dependence on it.  Given Nepal’s topography and climatic setting, Nepal can develop organic farming system with products of high export potential.

National Consensus

The government is not only stable with two-third majority in the Parliament, it is also has clear vision and objective for the development of the country. In devising economic policy, the Government is not moving alone. The private sector has been taken on board as an indispensable partner in the journey to economic transformation.

The development agenda and foreign investment enjoy national consensus in Nepal. All political forces in the Parliament stand together to invite and encourage foreign investment.

Nepal is ready for business and investment. We welcome your investment. Feel secure and seize the moment.  Your investmentwill be protected and your profit will be guaranteed. We do not want any further delay in our journey towards prosperity. Speedy and comprehensive development is the only option and the call of the hour.