NRN investors to be treated as Nepalis

NRN investors to be treated as Nepalis

The government will provide facilities to non-resident Nepalis (NRN) on like that to domestic industrialists to promote foreign investment. The draft of foreign investment policy prepared by the Ministry of Industry has classified investors into institutional foreign investors, individual investors and NRN investors providing special facilities to NRNs.

Though there s a threshold of US$ 200,000 for foreign investors, there will not be any threshold for NRNs. Similarly, NRNs will not be banned from investing on micro enterprises, traditional cottage industries and realty sector unlike the foreign investors. Though there is a threshold of Rs 5 billion on retail trade for foreign investors, NRNs will be allowed to invest below that amount on retail trade. “We have considered that NRNs are also domestic investors. We will keep separate provisions from foreign investors for them,” Under Secretary at the ministry Narayan Acharya said. The proposed draft also has provision allowing NRNs to make foreign direct investment (FDI) institutionally and individually and also to invest on portfolio.

The ministry is preparing to amend the policy to make it contemporary and modern with an aim of developing and expanding infrastructure by fulfilling the lack of capital formation due to low domestic saving. The draft, that is being given the finishing touch, has prioritized hydropower (generation/transmission), transportation (fast track, railway, postal highway, cable car, metro service, flyover, and international airport), agricultural and processing of medicinal herbs, tourism, mineral based and manufacturing industries.

The provision of banning foreign investment on hotels below three-star, however, will be removed following widespread criticism. Section Officer at the ministry Parbati Thapa said the provision will be removed to attract more tourists through hotels as the government has prioritized tourism sector. The threshold for hydropower generation has been set at 30 MW but Acharya said that it may be reduced as the stakeholders have crticised imposition of threshold on hydropower.

Manufacturing industries, education, health, and information and communication technology have been prioritized in the policy for creating jobs, and promotion of export and import substitution. The threshold for transportation and other infrastructures has been set at US$ 10 million. It is US$ 2 million for industries for processing of agricultural products and medicinal herbs, promotion of export and import substitution. It is Nepali currency equal to US$ 2 million for mineral-based and manufacturing industries. The draft, however, has not set a threshold for communication, and higher studies (health, technical and vocational), and institutions established to produce medium level technical work force.

Source: Karabardaily