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Nepal fdi
- 1. N E P A L Modern Portfolio Designed
- 2. -First Foreign Investment. -Nepal Investment Forum & Summit. History -Pros. -Cons. Impact of FDI in Nepal - Overview of Nepal - FDI. Introduction -Regulatory Framework - Survey and results. Nepal FDI Nepal Investment Summit 2019
- 3. Nepal GDP US$ 30 bill Growth Rate 6.3 % Per Capita US$ 1004 Area 147181 sq.km Population 29.1 million Form of Govt. Federal Republic Federalism Divided into 7 provinces
- 4. • A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a business in one country by an entity based in another country • It includes mergers and acquisitions, building new facilities, reinvesting profits earned from overseas operations, and intra company loans
- 5. The first official record of FDI flow to Nepal was in 1951/52 when the Nepal Commercial Corporation was set up as a joint venture with 67 percent equity participation from Indian investors (Aryal, 2009). First Foreign Investment Nepal Investment Forum & Summit Nepal Investment Forum was organized in 1992 in Kathmandu, which was a very successful in attracting the foreign investors (Department of Industry, 2005). The Government of Nepal organized Nepal Investment Summit on 2-3 March, 2017. This summit observed the USD 13.74 billion investment commitment to ten sectors from 26 companies of eight countries.
- 7. Regulatory Framework Survey and Results Nepal Foreign Direct Investment • Legal Framework • General Regulatory Arrangement • Institutions • FDI Approval Procedure • Nepal Rastra Bank Survey • Results
- 8. Nepal include Foreign Investment and Technology Transfer Act (FITTA), 1992, Foreign Exchange (Regulation) Act, 1962, Investment Board Act, 2010, Industrial Enterprises Act, 2016, Company Act, 2017, Investment Board Act, 2011, Contract Act, 2000, Arbitration Act, 1999, Income Tax Act, 2002, Labor Act, 2017, and Privatization Act, 1992, Electricity Act, 1992, Nepal Petroleum Act, 1983, Private Investment in Infrastructures Act, 2006, Mines and Mineral Resources Act, 1985, Bank and Financial Institutions Act, 2017, . Legal Framework Taxation, Foreign Exchange Arrangement, Labor Regulation , Land Regulation, Intellectual Property Law, Dividend Repatriation General Regulatory Arrangement 03 02 01 Institutions Dept. of Industry (DOI), Investment Board of Nepal (IBN), Nepal Rastra Bank (NRB) Regulatory Framework
- 10. Survey FDI Position in 2015/16 June,2018 Report Nepal Rastra Bank AWESOME PRESENTATION Results
- 11. SURVEY The FDI survey is one of the surveys conducted by NRB. The FDI enterprises are categorized into three groups, large, medium and small based on capital. Population of survey=252, Large group =29 Medium group =40 Small group =183. In terms of equity capital, these three groups constitute Large =85%, Medium=7.6 % Small=7.4 % The selected firms’ capital (Rs. 102.85 billion) is 96.9 percent of total (Rs. 106.17 billion).
- 12. RESULTSS.N. Countries Agriculture Industry Service Total 1 West Indies - - 62,779.7 62,779.70 2 India 104.4 16,904.9 10,244.8 27,254.10 3 China - 9,200.9 1,643.2 10,844.10 4 Singapore 113.2 6,286.1 735.6 7,134.90 5 Ireland - - 5,805.3 5,805.30 6 Australia - - 3,831.6 3,831.60 7 South Korea 15.9 2,769.5 119.2 2,904.60 8 Bangladesh - - 2,509.9 2,509.90 9 UK - 222.9 2,107.9 2,330.80 10 USA 127.1 784.7 1,415.8 2,327.60 11 Others 34.50 4448.80 5472.70 9955.80 Total 395.2 40,617.7 96,665.5 137,678.40 Rs. MillionAs on Mid- July ,2016RESULTS
- 14. Synops is Inaugurated by Hon’ble Prime Minister & addresses by prominent leaders from business communities. 4 plenary sessions that discussed on policies & prospects of investments. 6 sectoral parallel sessions. 36 Bilateral Meetings with Hon’ble Prime Ministers & Ministers More than 39 B2G & more than 30 B2B meetings.
- 16. Why Invest in Nepal ? Policy Reforms • Introduction of many legal forms • Provision of one Stop Service Center • Introduction of online registration and payment Access to Markets • Market access to India & China • Access on textile items to US through TIFA • Member of WTO, SAARC, BIMSTEC Few Competitors & Vibrant Market • Limited competition due to few prominent foreign players • Rapidly growing consumer base. Infrastructure Development • Power sufficiency, New Projects • SEZs, Cross Border Economic Zones • Industrial Districts, Village , Corridors, Product Specific Industrial Area. Young & Energetic Human Resources • Young, energetic, educated & trained work force • 61% between ages 15 and 65. FDI • 100% ownership in all sectors • Easy entry , operation, repatriation & exit of investment. VISA • Non-tourist visa of 6 months for R & D, survey for foreign investors. • Business visa to foreign investors, representatives & family members during investment period. DTAA & BIPPA • DTAAs with 11 countries & BIPPAs with 6 countries. • Additional Agreement with Potential Countries in Pipeline. Trade Connectivity • Additional Port facility exploration. • Railways Transportation under progress. • Transport transit agreement with China. • MOU on BIMSTEC interconnection.
- 17. Nepal Investment Summit ,2019 SectorsObjective -To project Nepal as favorable investment destination. -Unveiling opportunities for investment in various sectors. -To unfold policy reforms to attract investors. -To provide platform for Global Investors to deepen their understanding of investment. -Energy -Info Communication & Tech(ICT) -Tourism -Industry -Transport Infrastructure -Agriculture Target Audience -Investors (Foreign , NRN, Domestic) -Development Partners -Diplomatic Missions. -Government Representatives -National & Intl. Media -Experts -Other relevant stakeholders
- 18. ENERGY ICT Areas for Investment • Hydropower • Solar Energy • Wind Energy • Biomass • Geothermal Areas for Investment • ITE’s & BPO Services • Software Development • Mobile Application • Digital Content Development • ISP • Online Payment Services & Infrastructure Ongoing Government Projects: • National ID System. • Government Cloud. • Digital Education System. • Smart Cities. • Optical Fiber. • Single window system for Trade Facilitation. Some important facilities: • Sole or JV Investment. • Nominal Royalty to be paid to Govt. • Guaranteed water rights. • Lease arrangement for public land. • VAT exemption & 1% custom duty on import of construction equipment. • Exemption of 100% income tax for first 10 years and 50% for next 5 years.
- 19. TOURISM INDUSTRY Areas for Investment • SpiritualReligious: • Recreation: • Education, sports & health • Civil Aviation: • Mice Tourism Recent Developments: • Upgradation of Airports – International & Domestic. • Upgradation of Highways. • Development of Ramayan & Asian Buddhist Circuit pilgrimage sites connecting India & Nepal. Areas for Investment : • FMCG’s • Garments • Cement • Pharmaceuticals • Metal & metal products Tax Incentives ( Industry ) • 100% (1st 10 Years) & 50% (next 5 Years): Energy Industry, Inside SEZ ( Mountain & Hilly areas). • 100% (1st 5 Years) & 50% (next 3 Years) : Mining ,Tourism & Aviation, Inside SEZ (other areas), Industries with Capital 1 Billion & Employment 500 persons.
- 20. TRANSPORT AGRICULTU RE Areas for Investment • Roads • Railways • Waterways & Cable Cars • Aviation • Mass- Transport Potential Projects: • North –South Corridors ( Road- 8 Projects) • Kathmandu – Terai Fast Track • Biratnagar, Dhangadi, Nijgadh International Airport • Koshi, Gandaki & Karnali rivers connecting India • Cable Cars- Jomsom, Muktinath, Annapurna-Sikle, Khaptad etc. Areas for Investment • Fertilizer industry • Infrastructure • Agricultural Machines, Tools and Technology • Agricultural Financing • Seed production • Processing industry • Organic Farming Incentives : • 40% tax exemption for fruit based brandy, wine,cider- producing industries at under developed areas for 1st 10 year • VAT Exemption facility for agro-based storages • 50% Vat square off facility for mustard oil and Vanaspati ghee producing industry, dairy industries & tea producing industry • 70% VAT Square off facility for sugar producing industries • Exemption in income tax and dividends for industries established in SEZ’s.
- 26. Key Visions and Target of Government
- 27. IMPACT OF FDI IN NEPAL PROS Makes international trade easier to complete. Foreign income can increase Improves human resources. Provides a foreign company with needed experience. Creates new opportunities for workers Provides local economic benefits in multiple locations.
- 28. CONS Stops domestic investments from happening. It isn’t without risk. It can be more expensive Can affect currency exchange rates. It can lead to exploitation. Culture Clash.