Nepal | August 21, 2019

NRNA concerned over draft investment bill and Nepal’s FDI policy

THT Online

KATHMANDU: Citing that the government has not explicitly addressed various issues pertaining to Foreign Direct Investment (FDI) in its proposed draft Foreign Investment Bill, the Nepal Policy Institute (NPI) has urged authorities to resolve differences and work for creating a conducive investment climate in Nepal.

The NPI, an autonomous think-tank under the Non-Resident Nepali Association (NRNA) said that there are differences in the draft investment bill proposed by the government and the NPI proposal on FDI policy.

“Provisions in the proposed government draft bill lack clarity on allowing 100 per cent ownership of enterprises in all economic sectors to non-Nepali national, Nepali diasporas and people of Nepali origin,” NPI said in a statement.

Moreover, the institute has also argued for same investment rights as Nepali citizens to those individuals of Nepali origin who might have had to renounce their Nepali citizenship because of dual citizenship restrictions.

According to NPI Chairman Khagendra Raj Dhakal, the government should table a clear proposal with provisions that ensure approval of FDI by Investment Board of Nepal (IBN), irrespective of amount, under a one-window policy.

Likewise, the NPI has also called for addressing the environmental standards and compliance issues which it says the government has failed to include in the draft bill.

Similarly, calling it ‘not adequately clear’ in the government table proposal, the institute has asked the government to ensure that no investment would be expropriated or confiscated for administrative purposes and political measures in the operation of foreign national owned enterprises.

According to NPI, government’s bills relating to foreign direct investment are restrictive and are less likely to encourage foreign investors’ participation in economic sectors in Nepal.

“Investors should be allowed to repatriate foreign currency investment, profit from operations, principal of any loan obtained during the course of business operations without going through Nepal Rastra Bank. This authority should be delegated to commercial banks,” NPI Chair Dhakal said.

Commercial banks should be given more freedom to deal with foreign investors once foreign currency account is established for the purpose of businesses. But the government proposal has failed to take it into account, he added.

Moreover, the NPI has also stressed on the need to abolish large list of “the Areas Prohibited for Foreign Investment” from the Foreign Investment Act for attracting external investments in economic subsistence sectors.


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