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Foreign Investment Policy and its implications to investors – Policy Brief

Foreign Investment Policy Brief

Addressing legal and political economy dimensions of foreign investment policies, Samriddhi has come up with a new policy brief that analyses the key features of the Foreign Investment Policy, 2014 proposed by the Ministry of Industry, Government of Nepal. With the promulgation of Foreign Investment and Technology Act, 1981, Nepal opened up avenues for foreign investments in Nepal. Later, the Foreign Investment and Technology Transfer Act (FITTA), 1992 opened foreign investment in any quantity and any sum of investment except in a few limited sectors included in its negative list.

It has been 22 years since the promulgation of FITTA 1992 and current global economic trends require that Nepal embark on a process of introducing a “second generation” of reforms to the existing policy. It is against this background that the Ministry of Industry (MoI), Government of Nepal (GoN) floated a draft of Foreign Investment Policy, 2014.

Foreign Investment and Technology Transfer Act, 2070 was proposed in early 2013 and after receiving mixed feedback on the draft act, a Foreign Investment Policy (FIP), 2014 was proposed recently. In July, 2013 Samriddhi’s publication on Foreign Investment had also highlighted the need for a second generation of reforms. Samriddhi, The Prosperity Foundation has attempted to evaluate the proposed Foreign Investment Policy to assess whether or not this policy sets the right tone for Nepal to lure foreign investments that are required for the overall development of the Nepalese economy in order to place Nepal among developing nations.

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