KATHMANDU, Feb 9: The government is considering revising over a dozen laws to facilitate an enabling environment for potential investment ahead of the upcoming Nepal Investment Summit 2024.
A meeting of the 3rd Investment Summit Directors’ Committee held on Thursday pledged to amend a number of laws related to facilitating investment in the country. The task force, led by Ek Narayan Aryal, secretary of the Office of the Prime Minister and Council of Ministers, presented a report in the meeting recommending various aspects of legal and policy reforms.
The taskforce has urged the government to remove hassles that could hinder implementation of approved projects through amendment of laws. The proposal includes the bill formed to amend some acts to facilitate investment, which will shortly be presented before parliament for approval.
Review of the Industrial Enterprise Act 2020, Foreign Investment and Technology Transfer Act 2019, Special Economic Zone Act 2017, Forest Act 2019, National Park and Wildlife Conservation Act 1973, Lands Act 1964 and Land Acquisition Act 1977 are some proposed measures by the taskforce. Likewise, some provisions of the Environment Protection Act 2019, Electronic Transactions Act 2008, Nepal Civil Aviation Authority Act 1996, Foreign Investment and Technology Transfer Regulations 2021 and Forest Regulations 2023 have been recommended for the review.
The government has announced it will hold the Third Investment Summit from April 21-22 in Kathmandu. The government aims not only to attract foreign investment but also to encourage the mobilization of domestic investment and investment from non-resident Nepali communities during the summit.
Analysts say that the government’s initiative to amend the laws shows that it is more concerned about the outcomes of the upcoming summit. According to Siddhant Raj Pandey, chairman of Nepal Private Equity Association, multiple reforms in laws along with the coordination of rules and regulations are required while simplifying bureaucratic procedures starting from the company registration process to attract more investment in the country.
The government had organized two investment summits in 2017 and 2019 with much hype to attract foreign direct investment (FDI). However, the results were not encouraging.
The Nepal Investment Summit 2017 concluded on a positive note, securing investment commitments totaling USD 13.5 billion from six countries. However, when it came to actual realization, only a fraction of these commitments was materialized.
Showing its promptness with amendment to a number of laws, the government showcased 50 projects during the Nepal Investment Summit 2019, out of which only 15 deals worth USD 12 billion in total were signed at the summit. These included the pledges from both the private sector of Nepal and foreign companies. However, only a few of them have made notable progress till date.
Nepal is among those countries where official development assistance (ODA) and remittances are significantly higher compared to the FDI. In South Asia, Nepal performs inadequately in terms of FDI inflow, ranking sixth with a mere USD 65 million, shows the World Investment Report 2023.