The US Department of State has reported a gamut of investment barriers in Nepal.
The department’s ‘2019 Investment Climate Statements: Nepal’ has critisised Nepal’s business climate claiming various institutional and procedural impediments. “Nepal offers opportunities for investors willing to accept inherent risks and the unpredictability of doing business in the country,” the report reads, adding, “Significant investment barriers remain, while Nepal has established some investment-friendly laws and regulations.”
Questioning the government’s capacity to implement reforms including newly enacted laws including the Foreign Investment and Technology Transfer Act, Industrial Enterprise Act, Special Economic Zone Act intended to attract increased foreign investment, the report has expressed serious doubt over the delivery.
The government has lined up around 3 dozen Acts and Policies in parliament to amend them to encourage and attract investment but the private sector has been confused as the amendmends are more regressive than progressive according to the recent business environment.
The domestic investors have also blamed that the laws pose impediments and restrictions to foreign investment, despite the amendments to attract foreign investment. The government, in a move to discourage the petty foreign investment and attract bigger ones, reduced the minimum threshold on foreign investment but failed to minimise business risk.
“Three laws directly impacting foreign investment were hurriedly revised and passed by Parliament ahead of the 2019 Investment Summit,” the report reads, adding that it left little time for consultations or transparency in the process. “The ‘petty bureaucracy’ based hindrances have impeded smooth conduct of business and the issues remain unaddressed in the absence of pay-offs or personal interventions with cabinet-level officials.”
Rather than systematic and routine processes, many foreign investors note that Nepal’s regulatory system is based largely on personal relationships with government officials, the report further reads, quoting a World Bank official as saying that corruption in Nepal was 'endemic, institutionalised, and driven from the top'. “Corruption takes many forms but is pervasive in the awarding of licences, government procurement, and revenue management,” it adds.
The department’s ‘2019 Investment Climate Statements: Nepal’ has critisised Nepal’s business climate claiming various institutional and procedural impediments. “Nepal offers opportunities for investors willing to accept inherent risks and the unpredictability of doing business in the country,” the report reads, adding, “Significant investment barriers remain, while Nepal has established some investment-friendly laws and regulations.”
Questioning the government’s capacity to implement reforms including newly enacted laws including the Foreign Investment and Technology Transfer Act, Industrial Enterprise Act, Special Economic Zone Act intended to attract increased foreign investment, the report has expressed serious doubt over the delivery.
The government has lined up around 3 dozen Acts and Policies in parliament to amend them to encourage and attract investment but the private sector has been confused as the amendmends are more regressive than progressive according to the recent business environment.
The domestic investors have also blamed that the laws pose impediments and restrictions to foreign investment, despite the amendments to attract foreign investment. The government, in a move to discourage the petty foreign investment and attract bigger ones, reduced the minimum threshold on foreign investment but failed to minimise business risk.
“Three laws directly impacting foreign investment were hurriedly revised and passed by Parliament ahead of the 2019 Investment Summit,” the report reads, adding that it left little time for consultations or transparency in the process. “The ‘petty bureaucracy’ based hindrances have impeded smooth conduct of business and the issues remain unaddressed in the absence of pay-offs or personal interventions with cabinet-level officials.”
Rather than systematic and routine processes, many foreign investors note that Nepal’s regulatory system is based largely on personal relationships with government officials, the report further reads, quoting a World Bank official as saying that corruption in Nepal was 'endemic, institutionalised, and driven from the top'. “Corruption takes many forms but is pervasive in the awarding of licences, government procurement, and revenue management,” it adds.
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