Nepal lucrative for business, Oli tells Chinese investors

Kathmandu, June 20: Prime Minister KP Sharma Oli has urged the Chinese investors to invest in Nepal’s potential sectors like manufacturing, hydropower, information technology, services, tourism, mining, and agro-based industries.

“Nepal is a virgin land for investment. A land of immense potentials for investment in the areas of hydropower, agriculture, tourism, services, manufacturing industries, among others,” said the PM while addressing the Nepal-China Business Forum in Beijing on Wednesday, according to the Embassy of Nepal in China.

"Our negative list is very small, and we confidently count on Chinese investment in filling our financial as well as technological gap.  I believe our friend China is willing to do this," he said.

He stated that investing in Nepal now was really a profitable business, and the government was determined to maintain an investment friendly environment, not by word but by action.

“With the end of political transition and strong government in place, situation of law and order in the country has improved remarkably. So is the situation in terms of industrial relations," he added.

China remains the largest source of FDI in Nepal and the second largest trading partner while economic engagement between the two countries has been growing rapidly.

Our focus on trans- Himalayan connectivity will create conducive environment for bilateral trade and facilitate increased movement of goods and services, stated PM Oli.

“Investors always look for market, which is not a problem in Nepal. As you all know, Nepal is located between two vibrant markets of the world, India and China, with a population of over 2.5 billion. Production is the only problem.  Our productive capacity is limited,” he said.

Nepal enjoys Duty Free Quota Free (DFQF) access into Chinese market to more than 8,000 Nepali products.

Nepal has been requesting China to grant enhanced level of market access to 512 tradable products. It also has duty free access to European market and preferential market access to the United States of America for over 70 products as a Least Developed Country (LDC).

“We are committed to further improving business climate in the country. We are ready to do everything that enhances your confidence that facilitate your engagements and that helps you make quick decision for investment,” said the PM.

He also said that the country had enacted the laws and policies on foreign investment, Public-Private Partnership, industrial enterprises, banking and intellectual property.

He said that Nepal was an attractive land for diversified agriculture comprising the arable land just 80 metres above the sea level to the top of the world.

“It is also a lucrative land for investment in hydro sector with more than 100,000 megawatt capacity which remains untapped so far. It has a reservoir of mines and minerals such as iron, cement and precious stones, yet to be explored,” the PM said.

He assured the Chinese investors that the government of Nepal was committed to maintain liberal economic policy with private sector as a key partner, and the present government had no intention to reverse the trend.

He further said that Nepal had low tax slabs, no income tax on earnings of industry exporting its projects established in Special Economic Zones for certain period of time, exemption of tax and tax holidays for certain industries, exemption of duty and fees on key inputs used by an export industry.

“There is a favourable fiscal environment in Nepal,” he said.

Nepal’s law permits full repatriation of income earned from investment and reinvestment, foreign companies registered in Nepal can purchase, own and sell land, and no discrimination is made between national and foreign investors.

Investors also have benefits of cheaper labour force and improved labour law and industrial relations in the country, he added.

PM Oli said that partnership with Chinese investors to complete the priority projects such as cross-border railways, transmission lines and establishment of new international airports, will be very important.

The two countries have signed Memorandum of Understandings (MoUs) and agreements like Framework Agreement on Promotion of Investment and Economic Cooperation, MoU on Energy Cooperation and MoU on Investment and Cooperation on Production Capacity which will facilitate and reinforce the collaboration between the investors of the two countries.

Nepal has joined the BRI, an initiative launched by President Xi Jinping, he said.

“We believe that this initiative offers immense opportunities for collaboration and partnership between our two countries. Growing attraction of the international community towards BRI has made it one of the biggest platforms for international cooperation,” PM Oli said.

He said that Nepal-China relations are multidimensional that encompass political, economic, social and cultural aspects. 

“Our political relations, which are based on the Five Principles of Peaceful Co-existence, have always remained cordial and friendly. We share a trouble-free and cooperative relationship. Over the years, our relations have grown both qualitatively and quantitatively," he said.

 He also said that Nepal was committed to One China policy.

“Our two countries are not only good friends but also reliable development partners. We want to create success stories. We believe that China, with its huge financial and technological capability, can help us to transform our development landscape,” he said. 

Published in The Rising Nepal daily on 21 June 2018.