Nepal first needs to reform legal barriers like difficult taxation system, unclear policies to encourage foreign investment Kathmandu, December 20 At a time when the government is gearing up to host Nepal Investment Summit next year with a target of attracting $1 billion in foreign investment during the two-day meet, foreign diplomats in Nepal have highlighted the need to first improve the legal and institutional system in the country. Speaking at an event organised by the Ministry of Industry today seeking support from the diplomatic fraternity for the summit, diplomats representing foreign embassies in Nepal said Nepal first needed to reform legal barriers like difficult taxation system and unclear policies to encourage foreign investment in the country. MoI is scheduled to host the Nepal Investment Summit on March 2 and 3 in the capital with an aim to harness investment opportunities in Nepal. “Japanese investment in Nepal is comparatively low despite huge investment potential areas in the country. This is probably because of difficult legal and institutional systems in Nepal,” said Masashi Ogawa, ambassador extraordinary and plenipotentiary of Japan to Nepal, adding that Japanese investors are willing to come to Nepal if such barriers are reformed. Michael Gonzales, deputy chief of mission at the US Embassy in Nepal, said the US was pleased about improving investment climate in the country and would encourage American investors to invest in potential sectors here. “However, investors carry out adequate research before bringing in investment. Thus, Nepal should be prepared to convey that foreign investment policies in the country are clear, stable and incentivising,” Gonzales said. Gonzales added that Nepal should also introduce labour-friendly acts as the business community tended to examine the country’s labour policies before making investments. Envoys also said that the inability of Investment Board Nepal to hold board meetings on time is discouraging the flow of investment to Nepal. IBN has not been able to hold a single board meeting after the formation of Pushpa Kamal Dahal-led government. As a result, decisions related to major projects have been stalled. Pradeep Shrestha, former president of the Federation of Nepalese Chambers of Commerce and Industry, opined that the government should effectively use honorary consuls representing Nepal in different nations to promote investment in the country. Addressing the event, Minister for Industry Nabindra Raj Joshi said the government wanted to encourage foreign and domestic investment and that domestic and foreign investors would be treated equally in terms of government facilities. “There is strong political will now and parties have also expressed their commitment to work for economic prosperity of the country. Along with this, crucial laws targeting industrial growth in the country have been formulated,” said Joshi, urging envoys and diplomats to encourage investors of their nations to invest in Nepal without fear.