February 27: The government has started homework of policy improvement to attract foreign investment.  Currently, Nepal is not able to attract lucrative foreign investment into the country. Thus, the government has taken a step towards policy improvement to bring foreign investment as well as technologies. In this regard, the government is preparing to reduce the time period for process involved in foreign investment. In addition to this, the government is also preparing to make amendments to the Foreign Enterprise and Technology Transfer Rules.

The Foreign Investment and Technology Transfer Rules 2077, which was approved and implemented by the Council of Ministers in December last year, had set a minimum limit of Rs 50 million for foreign investment. The time limit was also set when such a limit was fixed.

Accordingly, the process of bringing investment should be started within one year. Foreign investors who pledge to invest Rs 50 million should bring 25 percent of the investment within one year. Similarly, investors who pledge to invest Rs 250 million should bring 15 percent of the pledged amount within a year and investors investing Rs 1 billion are required to bring 10 percent within one year while the investors investing above Rs 1 billion are required to bring 5 percentage of committed amount within a year. No such date was fixed before this arrangement was made.

The private sector had been protesting against the regulations arguing that the provision in the regulations was not practical.

The government has formed a study committee headed by Ram Chandra Tiwari, Director General of the Department of Industry, to amend the regulations. The committee, which was formed a month ago, has started the study process and has been mandated from the Ministry of Industry, Commerce and Supplies to prepare a report with suggestions for amendment.

Tiwari, the head of the study committee, said that the committee has already started its work. "We will study the need to amend the current rules in detail and submit a report soon," he told New Business Age.

The Ministry of Industry says that the process of amendment will move forward after it receives the report from the study committee. The private sector and investors have been complaining that they are embarrassed by the time limit and time set by the government for foreign investment.

The Confederation of Nepalese Industries (CNI) has been demanding removal of the minimum limit for foreign investors since the introduction of such an arrangement. "In order to encourage foreign investment, the minimum limit should be removed," the CNI said in a recent statement. The number of foreign-invested industries in Nepal has reached 5,366 now.

What is the commitment of foreign investment in Nepal?

In the first six months of the current Fiscal Year 2078/79, a total of 129 new industries with foreign investment have been registered in Nepal. According to the Department of Industry, with the new industries registered, the total number of industries with foreign investment in Nepal has reached 5,366. There are 319 large, 566 medium and 4,481 small industries registered with foreign investment in Nepal. As of mid-January, Nepal has received foreign investment commitment of Rs 31.53 billion.

 According to the Department of Industry, foreign investment commitment of Rs 24.23 billion was made in the corresponding period of the previous fiscal year.