Investment Policy Review - Nepal

image of Investment Policy Review - Nepal

This report examines ways in which Nepal can improve its Foreign Direct Investment (FDI) performance. It covers issues such as the country's FDI trends and performance, the investment framework currently in place and possible strategies to attract greater FDI.



Main findings and recommendations

Inflows of FDI into Nepal accelerated after the economic liberalization of the 1990s but remain very low, averaging only about $8 million annually. FDI inflows are low also in relation to the size of population and economic activity, even compared with other least developed landlocked States in the Asian region. Much of this FDI is concentrated in the Kathmandu Valley. FDI has contributed significantly to export diversification, and foreign investors may be providing up to 25 per cent of manufacturing employment. But the overall inflows are so low that, all in all, FDI has not been a significant development catalyst.


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