Foreign
Investment policy
Nepal has only recently opened the doors
to foreign investment. The Foreign Investment and Technology
Act (1981) as amended in 1992 lays down the law governing
foreign investment and the applicable rules and regulations.
The New Industrial Policy of 1992 identifies foreign investment
promotion as an important strategy in achieving the objectives
of increasing industrial production to meet the basic needs
of the people, create maximum employment opportunities and
pave the way for the improvement in the balance of payments.
Foreign investment is expected to supplement domestic private
investment through foreign capital flows, transfer of technology,
improvement in management skills and productivity and providing
access to international markets. In this context HMG is encouraging
foreign investments in Nepal by providing attractive incentives
and facilities within a liberal and open policy. The importance
attached to foreign investment is clearly reflected in the
New Constitution adopted by Nepal in 1991. In the directive
principles of the Constitution it is stated that a policy
of attracting foreign capital and technology shall be adopted.
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His Majesty's
Government of Nepal has adopted Tourism Policy in 1995 with
a view to promote tourism sector. Under the policy, Nepal
will be developed as a secure tourist destination. Existing
facilities will be upgraded and new tourist areas will be
developed. Competitive tourism promotion and marketing program
will be launched in tourist originating markets to establish
Nepal as major tourist destination. With a view to promote
tourism, His Majesty's Government of Nepal launched Visit
Nepal Year 1998.
Many tourists visit Nepal in ever increasing number. In 1990
around 255000 tourists visited Nepal. Tourists arrival in
1995 increased to 363400. Asian region and Western Europe
continue to be the prime tourist market followed by North
America, Australia and the Pacific . Recent projections made
on tourists arrivals indicate a very steady growth to reach
625000 in 2000, 761000 in 2005 and 953000 by the year 2010
. The number of star and non-star hotels is increasing rapidly.
The quality and services of these hotels have been improving.
By the year 1994 the number of hotels reached to 394 and the
beds to 17730. By the year 1995 the number of tourist hotels
and tourist beds has increased to 520 and 21807 respectively.
While considering the projected arrivals and existing stock
of hotel rooms, it is estimated that there will be a big shortfall
of rooms of 4 and 5 star stan?dard by 2010 in Kathmandu and
high class hotels in Pokhara which is becoming an important
tourist destination.
The tourism industry is growing very rapidly and Nepal has
tremendous potentials for tourism development because of its
unique natural and cultural heritage. A major strategy in
meeting the demand for hotel rooms in Nepal is to encourage
increased private investment, including private foreign investment
for the development of tourist infrastructure such as 4 and
5 star hotels and resorts. The construction and operation
of hotels and resorts offer very promising prospects for profitable
investment. Similarly, investment in popular tourist activities
and recreations would be successful undertaking. Foreign Investment
will be encouraged in capital intensive tourism industries
such as hotels, resorts and in areas which transfer modern
technology and skills. |
