Presented by: Shankar Prasad Koirala Secretary at Ministry of Industry

1. Creating Conducive Business ClimateCreating Conducive Business Climate
Program and Policy in NepalProgram and Policy in Nepal
Shankar Prasad Koirala
Secretary at Ministry of Industry
Government of Nepal
March 2, 2017
1

2. Policy Reform
 Nepal aspires to become a developing country by 2022 and a middle
income country by 2030
 Contribution of Industrial sector to national GDP is around 5%,
which is nominal, target is 10% in 1st
phase
 Completed a long political transition, now the focus is on Economic
Transformation
 Economic agenda is now the priority of Government and of all
political parties in Nepal
 Government has taken various initiatives to make necessary policy,
structural and procedural reform
 To achieve the objective of economic prosperity trough
industrialization, GON is seriously working on reforms and review
of the relevant policies

3. Industrial Enterprises Act, 2016
 Recently approved by the Parliament
 Provisions:
◦ Simplified and clarified the procedures for entry, operation and exit of
the industries
◦ Provision of One Stop Service Centre (Custom, Tax, Immigration and
NRB)
◦ Envisioned to provide various concessions and incentives to the
industries
◦ Provision of One-Stop Coordination Committee
◦ Strike is not allowed in the industry
◦ Additional tax exemption and special incentives in industrial zone
◦ Land on lease and exemption of land ownership limit for industry
◦ Draft of Regulation of this Act is almost complete
 To implement the industrial Enterprise Act
 To provide rebate and special consensus for the designated industry
 To attract the foreign investment in Nepal
Policy Reform …

4. Special Economic Zone (SEZ) Act,
2016
• Approved by the Parliament
• Provisions:
▫ Provides one window service for industries
▫ Income tax, local tax exemption
▫ Strikes and protests prohibited
▫ For the promotion base industry, the industry registration and
industry administration is done by SEZ for those industry, which
establish in SEZ
Draft of Regulation of this Act is almost complete
Policy Reform …

5.  Mines and Minerals Regulation, 2016
 Approved by the Cabinet
 Open area of Mine Works in Nepal
 Foreign Investment Policy, 2015
◦approved and the draft of new Foreign Investment Bill is almost ready to
be tabled in the Cabinet
 rehabilitation and resettlement policy Nepal
GON is seriously working on Policy Reform in Industry Sector and Ministry
beliefs that we have been able to bring changes and make Nepal as a
investment friendly country.
Policy Reform …

6. Infrastructure
 Establishment of SEZ
◦ 14 SEZ has been identified, feasibility studies of 8 SEZ completed;
Bhairahawa SEZ is in operation
◦ Infrastructure development for Garment Processing Zone has been
initiated in the premises of Simara SEZ Area
◦ The industry registration will be made in SEZ for the industries within
the respective SEZ.
 Industrial Districts in each state/province
◦ Land acquisition for at least one Industrial district in each State is almost
completed

7. Pipeline Policies and Acts
 Company Act, 216
 Tabled at Parliament, Process of endorsement
 Provision for easy exit of the companies
 FITTA, Foreign Investment and Technology Transfer Act, in
progress
◦ Attraction of FDI, various provision
◦ Assurance of investment and repatriation
◦ Area specified open to FDI
◦ Administrative Procedural simplification
◦ Provision to invest in existing industry and investment through technology
transfer
◦ Special exemption and incentives for FDI
◦ Grant non-tousist and business visa for investors and representatives
◦ Exemption on land ownership limit and provision of land on lease
 Integrated Intellectual Property Rights Policy
◦ Drafted and tabled in the Cabinet
 Mines and Minerals Policy
◦ Draft submitted to the Cabinet
◦ Open new area of investment

8. Structural Reforms
 One Stop Service Centre Committee
To facilitate and provide various services and incentives to the industries
through one window
 Dedicated branch office of Commercial Bank inside the premises of
Company Registrar Office has already been established
 Online system for FDI approval, Visa Recommendation and Industry
registration has already been enacted. The online system of Intellectual
Property will be operationalized soon.

9. Procedural Reforms
 Registration
◦ Online registration and document submission of companies has already
been established by Office of Company Registrar (OCR)
 Approval and Date connectivity
◦ An automation system for FDI approval and industry registration,
◦ It will be launched the online date exchange system between OCR and
DoI will be established very soon.
◦ After this data sharing, industrialist does not have to submit the same
documents in two government entities.

10.  Nepal Business Forum has been established for effective Public Private
Dialogue (PPD) mechanism
 Given high priority to foreign direct investment mobilizing natural
resources
 Adopted Economic diplomacy to attract FDI
 Small and Medium Size Enterprise Promotional Activities
 Online integration of DoI, OCR, Tax Office and NRB with Online
payment with Digital Signature
 Follow up plan of this Summit : Policy Committee lead by NPC, Project
Committee lead by MoF, Industrial Promotion Committee lead by IBN
and Overall Coordination Committee lead by MoI
Other Major initiatives

11. Country-Wise FDI in NepalCountry-Wise FDI in Nepal
Number of Industries from FDINumber of Industries from FDI
Country No.
CHINA 1,110
INDIA 658
USA 341
SOUTH KOREA 311
JAPAN 229
UK 158
GERMANY 102
FRANCE 81
THE NETHERLANDS 68
AUSTRALIA 64
BANGLADESH 60
SWITZERLAND 55
CANADA 40
SINGAPORE 38
RUSSIA 37
DENMARK 34
ITALY 32
MALAYSIA 31
PAKISTAN 26
TURKEY 23
AUSTRIA 20
BELGIUM 20
SPAIN 20
NEW ZEALAND 19
Country No.
PHILIPPINES 18
CHINA (TAIWAN) 17
ISRAEL 17
NORWAY 16
BRITISH VIRGIN ISLANDS 14
UNITED ARAB EMIRATES 14
IRAN 12
SWEDEN 12
THAILAND 11
FINLAND 10
UKRAINE 10
MAURITIUS 9
SYRIA 9
POLAND 8
SOUTH AFRICA 8
BRAZIL 7
IRELAND 7
SRI LANKA 7
BERMUDA 6
MEXICO 5
AZERBAIJAN 4
BHUTAN 4
KAZAKHSTAN 4
KYRGYZSTAN 4
Total No. of industries from FDI : 3,870
Top 50 only

12. FDI Country-wise dateFDI Country-wise date
SN COUNTRY NAME
TOTAL AMOUNT
OF FOREIGN
INVESTMENT
(Rs. in million)
1 INDIA 81,167.46
2 CHINA 59,350.32
3 SOUTH KOREA 10,994.33
4 BRITISH VIRGIN ISLANDS 7,967.28
5 USA 7,527.23
6 UK 5,255.07
7 MAURITIUS 3,314.70
8 SINGAPORE 2,896.39
9 SWITZERLAND 2,891.23
10 CANADA 2,698.94
11 JAPAN 2,342.17
12 UNITED ARAB EMIRATES 2,320.41
13 SPAIN 1,975.23
14 TURKEY 1,795.34
15 THE NETHERLANDS 1,477.90
16 GERMANY 1,310.22
17 NORWAY 1,165.33
18 SEYCHELLES 684
19 BANGLADESH 669.93
20 COOK ISLANDS 666.66
21 AUSTRALIA 624.67
22 BRAZIL 545.83
23 FRANCE 544.58
24 MALAYSIA 496.28
Investment in Rs. Million till Jan last,
2017 (1 USD = Rs. 108)
Total FDI : Rs. 206,030.00 Million

13. Nepal Conducive for Investment, FDI : Why Nepal ?Nepal Conducive for Investment, FDI : Why Nepal ?
 Conducive Policy and Program
 Cheap Labor, skill, semi-skill and un-skill
 Energy intensiveness
 Favorable Climate in Nepal
 Hospitable social environment
 Political commitment for investment
 Start-up governance reform initiative
 Getting easy for the foreign currency inflow and outflow
We believe that Nepal is undergoing a series of policy and
institutional reforms, that will play a catalyst in attracting FDI and,
are quite open for any policy and program reform to harness the
FDI in Nepal.

14. Our ExpectationOur Expectation
 We are confident that with your cooperation, we can achieve the
objective of the event
 We would highly appreciated if you could communicate your
respected private sector organizations, investors and other
respected agencies, who are especially looking for opportunities to
do business in Nepal for investment
 We expect your proactive role in this matter and,
 Last but not least, we seek your valuable suggestions and
cooperation
Key Message : After series of political transition, now is the time
for Nepal’s Economic Transformation. Having series of reforms,
Nepal will be the best place to invest.

15. Thank you very much