KATHMANDU, Jan 24: The government has removed the ceiling of the foreign direct investment (FDI) proposed to inject in the country via automatic route.
A cabinet meeting held on Thursday permitted the Ministry of Industry, Commerce and Supplies to scrap the limit on FDI inflows via online platforms. In a press meet organized on Friday, the government’s Spokesperson and Home Minister Om Prakash Aryal informed about the government’s latest decision in this regard.
As of now, the ceiling has been maintained at Rs 500 million, with an exception to the firms related to information and technology. To facilitate the one-window policy effective for foreign investors, the government has been enforcing an automated system for FDI, which initially was for the threshold of up to Rs 100 million, since May, 2023.
Govt simplifies process for attracting FDI
In this system, the foreign companies need to develop their user IDs and passwords via the online platform. They have to fill up the necessary details on the template developed by the Department of Industry (DoI).
The foreign companies need to declare the country of origin in which they are registered. After fulfilling the due procedures, the aspiring foreign companies will instantly receive the approval certificates, provided they fulfill the criteria defined by the DoI. Once the companies get the registration, they need to submit their project proposals at the DoI prior to the date they start their businesses.
Nepal has received FDI commitments worth Rs 39.23 billion from development partners in the first six months of the current fiscal year. Of the amount, Rs 2.80 billion was pledged by the foreign investors through the automatic route system.
The government has been putting its effort to welcome the FDI in the maximum amount, which however is not being effective due to various reasons. The government has revised a number of laws including the Foreign Investment and Technology Transfer Act, and has lowered the minimum threshold limit for the FDI to Rs 20 million from Rs 50 million since October 14, 2022.
