Investment Climate in Nepal
Since the signing of the Comprehensive Peace Accord in 2006, the investment climate in Nepal has improved significantly. Two peaceful elections have been held, engendering political stability and investor confidence. The drafting of Nepal’s new constitution by the Constituent Assembly has further raised the confidence of national and international investors. Nepal has signed a number of investment-friendly treaties, including Foreign Investment Technology and Transfer Agreement (FITTA), Bilateral Investment Promotion and Protection Agreement (BIPPA), and others. The agreements and treaties have created an enabling environment for investment in Nepal.
Nepal’s Competitive Edge for Business
Nepal is located between the two large economies, India and China. This strategic location offers unparalleled and preferential access to their markets. Nepal has innumerable access to Indian border as the two countries share at least 1500 Kilometers of open border. Chinese investment has recently increased; particularly on hydropower, cement and road. Nepal has immense markets across the border for any products.
Nepal has one of the cheapest labor and the labor force is quite young as the youths constitute more than 50 percent population in Nepal.
Nepal’s geographical location creates the potential for Nepal to become the transit point for Indo-China trade. Nepal is working to construct North-South corridor so as to accelerate trade with both countries. Most investment areas in Nepal have remained untapped. Therefore, the first-comers will have an advantage in Nepal as they can secure benefits from the state for starting a business in Nepal. Nepal is open for investment on the following areas: