Foreign Direct Investmet

FDI
Why to invest in Nepal?

The government is committed to the promotion of foreign investment, has enacted and amended various investment related and sector specific laws to provide a unique opportunity for FDI in Nepal.

Strategic location and geographic advantages

located between two large industrially advanced countries - India and China
Incredibly rich biodiversity, with potential in research in flora and fauna
abundant water resources provide great prospect for hydropower
Contains the Himalayas, which is the highest mountain range on Earth, combined with unique and diverse culture and heritage provides potential for tourism

Market Access

Duty free and open border access to India
Member of WTO
Enjoys various duty and tax free arrangements in the region as a Member of SAARC, and BIMSTEC Free Trade Agreement
Duty free, quota free market access to European Union under EBA arrangements
Zero tariff entry facility for over 8000 products to China
Duty free US market access for 77 items which also include garment products for 10 years (starting from 2016)

Ease of doing business

Foreign investors are allowed 100% ownership of a company in almost all sectors
Importance of the private sector recognized by the Constitution of Nepal (2015)
Repatriation of capital and profits to the investor’s home country is allowed
Arbitration and dispute resolution by independent judiciary.
Various bilateral investment protection and double tax avoidance arrangements are in place and such agreements are expected to increase significantly in the year ahead - BIP

Large pool of capable workers

57.87% of Nepal’s population represents working age group (15-59 years)
Relatively low cost of labour; minimum monthly wage (except for tea enterprises) being NPR 13,450 (approx. USD 122) as of July 2018
Large English speaking population, especially in the major cities including the capital, Kathmandu
High participation of women in the workforce

Investment Opportunities
in Nepal

Nepal encourages foreign investment both as joint venture operations with Nepalese investors or as 100 per cent foreign-owned enterprises.The few sectors that are not open to foreign investment are either reserved for national entrepreneurs in order to promote small local enterprises and protect indigenous skills and expertise or are restricted for national security reasons.

Hydropower

Nepal’s theoretical capacity for producing power from hydropower projects is around 83,290 MW, out of which 42,130 MW is estimated to be economically feasible. However, current installed capacity is only 1044 MW of electricity, despite the fact that peak domestic demand (supressed) is well over 1508 MW

Due to the abundance of water resources, potential of hydropower in Nepal is huge.There are multiple sources of water, including glaciers, snowmelt from the Himalayas, rainfall, groundwater and major rivers like karnali, mahakali, gandaki that produce significant flows.

Tourism

Nepal offers mountains, hills, plains, beautiful lakes, steep rivers and gorges, unique wildlife, historic monuments, impressive fine arts, significant religious sites and exotic cultures attracting a wide array of travelers

Buying shares in tourism-related stocks such as hotels, airlines or restaurants is a passive way to tap this potential.Also, there are lots of open opportunities in terms of infrastructure development to connect the sites, accommodation, travel and other tourist activities

Agriculture

Nepal's economy is largely dependent on agriculture yet the growth of agricultural sector from subsistence to commercial scale is a taking a slow pace.

There are good opportunities in input markets (such as for seeds, fertilizers, agricultural infrastructure and technology).Due to favorable climatic conditions, the focus on high value organic crops is increasing. Opportunities exist in processing, packaging and branding of non-timber forest products (medicinal and aromatic plants) cardamom, ginger, aquaculture, vegetables, floriculture, tea, coffee, honey and other agro products.

Information technology and communication

ICT sector is one of the fastest emerging sectors in Nepal, with huge potential for growth.As there are only two major telecommunications companies holding approximately 80% of the market share there is room for new firms.Opportunies in ITES and BPO services, Internet Service Providers, online payment infrastructures and services, Internet Data Centers, and IT park

All the services related to the ICT sector are open to foreign direct investment, except for media. For telecommunications, up to 80% foreign ownership is allowed

Manufacturing

There are many viable areas for investment such as FMGC, industial goods and consumer goods in manufacturing industries, both in terms of rationoal investment and foreign direct investment.FMCG sector is growing at a remarkable pace.
The garment industry in Nepal has grown significantly in the last decade, with relatively inexpensive labour, the government’s favorable policies, the existence of a domestic market as well as export potential, and incentives for the export of garments attracting investors. Industrial goods including fabricated metal products, non-metallic mineral products, basic metal, plastics and rubber products and textile.

FDIWhy to invest in Nepal?