Govt issues Foreign Investment and One Door Policy

RUDRA PANGENI Names five priority sectors for foreign investment KATHMANDU, Feb 28: The government on Friday issued Foreign Investment and One-Window Policy 2015, defining priority sectors to bring in foreign investment and introducing one-window service center to cater betters services to foreign investors. The policy has named hydropower, transportation infrastructure, agro-based and herbal processing industries, tourism, and mines and manufacturing industries are the prioritized sector for foreign investment. The Cabinet Committee on Financial Infrastructure and Development led by Finance Minister Ram Sharan Mahat on Friday approved the much-awaited policy with some minor corrections. Officials privy to the issue told Republica that the corrections include explanation of mass media industry which has been listed as a prohibited industry. Similarly, a provision has been added in the annex in which the government will remove or add priority industries listed in prohibited list by publishing a notice in Nepal Gazette. The objectives of the policy is achieving sustainable and higher economic growth, and creating jobs by mobilizing foreign investment, technology, skills and knowledge in the prioritized sectors. The policy replaces the Foreign Investment Policy of 1992 with an elaborate document which assures short-term and long-term visa for investors and their family members, their representatives as well as for manpower not available in the country. Similarly, the policy states that the government will facilitate foreign investors in land acquisition, industrial security and repatriation of investment and profits. It has clearly defined mediation and dispute resettlement process, among others. The policy states that foreign and domestic investors will be treated on par and that the government will not nationalize industries run by foreign investors. If such industries have to be acquired for the sake of public interest, the policy states that the government will do so by paying appropriate compensation. According to a statement issued by Ministry of Industry, Minister for Industry Mahesh Basnet said that the policy will be a base to trigger industrial revolution in the country by attracting foreign investment. The policy has also opened retail trading to foreign firms. However, the government needs to draft necessary laws to open the sector for foreign investors. The government is in the process of drafting Foreign Investment and Technology Transfer Act. The act is likely to be tabled in the parliament for approval within this fiscal year. The policy has not included any investment threshold for foreign investors. Government officials say such threshold will be included in the new act. Likewise, the policy has barred foreign investment in basic agricultural activities and limited such investments in herbal-based industries. Companies with foreign investment can also buy securities in the secondary market, according to the policy. As per the policy, the Ministry of Industry will restructure the existing Industrial Promotion Board as Foreign Investment Promotion Board. Priority sectors for foreign investment • Hydro-electricity (generation and transmission) • Transport infrastructure (expressway, railway, tunnel highway, cable car, metro rail, flyover and international airports) • Agro-based, food processing and herb processing industries • Tourism industry • Mining and manufacturing industries Prohibited sectors for foreign investment • Micro-enterprise and traditional cottage industries (except for technology transfer) • Arms and ammunition industry, and weaponry, explosives and gunpowder industries • Currencies and coinage business, and security printing • Real estate • Multi-brand retail trade with investment of less than Rs 500 million in fixed capital. (For larger investment, traders should have operations in more than two countries) • Owning or operating provider of tour guides, trekking and mountaineering guide, porters (also horse, mule and yak), cook for tourists • Priority sectors in agriculture including poultry, fishery, beekeeping • Industries involving radioactive material • Mass media industry