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.



FDI trends and performance

The volume of FDI inflows into Nepal has been small, averaging only about $8 million annually. The inevitable consequence is that FDI has not been an important source of aggregate investment finance and its impact on economic development has also been minimal. A comparison with selected high and low performing Asian countries brings out the underperformance of Nepal in terms of FDI inflows. As Nepal has some niche sectors such as tourism and herbal products, potential exists for the country to attract FDI in such sectors. Even though most sectors are open to FDI and the standard of treatment has been fairly good, the FDI potential has not materialized. An overall improvement in the business climate is called for to make it more investor-friendly.


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