Nepal’s Foreign Investment Policy and its Implications to Investors

This study evaluates Nepal’s foreign investment policy regime, especially with regards to the draft of the new Foreign Investment Policy recently brought into discussion. It assesses whether or not this policy sets the right tone for Nepal to attract foreign investments into the country.

While the study lauds potential success of the policy, it also raises curiosities on contentious issues under different topics addressed by the newly floated Foreign Investment Policy document such as institutional arrangements, investment threshold, visa and entry permits, rebates and incentives, provisions for employing foreign workers, industrialization, nationalization, repatriation, dispute settlement and strikes. The study does so all the while emphasizing that policies on their own are never enough and do not guarantee implementation- several other political economic factors come into play.

Therefore, the study also includes the policy’s provisions to other factors of macroeconomic significance. Some reference is also made to countries such as Costa Rica, Mauritius and Ghana to highlight the provisions and changes that contributed to FDI inflows in these countries. Finally, it also proposes a few recommendations after having rigorously studied the proposed policy in order to better facilitate Nepal’s foray into globalization.

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