Nepal may not be on radar for foreign investment, but there are some advantages that comes with this beautiful himalayan country.
Geographically located between two huge and economically fast growing countries, Nepal has market access of 2.7 billion people and duty free and open border access to India and duty free access for more than 8000 products to China. Moreover, the on-going project of railway between Shigatse in Tibet to Kathmandu in Nepal is estimated to complete on 2022, this development is assumed to increase trade and tourist inflow between Nepal and China and in addition to this it may establish Nepal as cost and time effective transition for India and China.
- Natural resources
Nepal have availability of tremendous water resources having potential of producing hydropower electricity where government is very welcoming for foreign large investment. The vast biodiversity of Nepal opens paths for many herbal medicinal, agricultural and minerals and mines research and development.
- Tourism Sector
Nepal is blessed with many natural resources from the Highest Mountains to Hunting National parks and with world cultural heritages sites which has kept Nepal at upmost choice of tourists all over the world. The diversified climate and cheap residing cost has also aid to lure many tourists. The recent political stability and gradual recovery from devastating 2015 earthquake is expected to increase the inflow of tourists.
- Availability of work force
Nepal has very cheap labor workforce amounting NRs. 9,700 only as of July 2017 and nearly 60% of the total population comes under working age group of 15-59 years.
- Market Access
Nepal enjoys many business advantages as the member of SAARC, Multilateral Investment Guarantee Arrangement (MIGA) of the World Bank Group, World Trade Organization, duty free and quota free market access to European Union under Everything But Arms (EBA) arrangements, duty free US market access to 66 types of garment items for 10 years (starting from 2016) and many more. Bilateral Investment Promotion and Protection Agreement (BIPPA) signed with Finland, India, Germany, Mauritius, United Kingdom, and France. Double Taxation Avoidance Agreement signed with Austria, China, India, Korea, Mauritius, Norway, Pakistan, Qatar, Sri Lanka and Thailand.
- Business environment
In Nepal the investors can enjoy low competitive advantages as there are very few foreign investors. The prevailing multinational companies have been gaining high profitability till now. Also, disposable income is in increasing trends due to increase in the remittance income which has high contribution to GDP of the country, precisely ranking on 4th position in the world for the fiscal year 2016/17.
(Some of the contents are extracted from US Embassy, Nepal Investment guide).
