Government of Nepal opens ‘‘Automatic Route’’ 
for foreign direct investment in Nepal

The Government of Nepal has opened automatic route for foreign investment in Nepal for seven industrial sectors for investment ceiling of up to five hundred million Nepalese rupees.

The Ministry of Industry, Commerce and Supplies of Government of Nepal has published a notice in the Nepal Gazette dated 2 October 2023 for determining the upper limit and scope of foreign investment through automatic route. Nepal has opened automatic route to ease the process of foreign investment in Nepal applicable for the following sectors:

  1. Energy-based industry:
  • Industries generating energy from wind, solar power, biomass or other sources; industries manufacturing machines/equipment to be used for the generation of such energy;
  • Energy based on bio-gas;
  • Energy to be produced as a co-production of the sugar industry;
  • Study of energy potential.
  1. Agriculture and forest product-based industry:
  • Fruit and vegetable processing;
  • Establishing and operating green house;
  • Silk processing;
  • Tea and coffee processing;
  • Medicinal herbs processing;
  • Rubber processing;
  • Cold store (storing local fruits and vegetables)
  • Natural fiber processing;
  • Based on paper, resins and other non-timber forest products;
  • Plant production through new technology (including tissue culture);
  • Cotton processing.
  1. Infrastructure industry:
  • Motor vehicle parking house;
  • Export related products processing zone;
  • Polluted water purification industries (waste water treatment plant);
  • Construction of film city, building film studio;
  • Construction and operation of ware-house.
  1. Tourism industry:
  • Motel, hotel, resort, bar and restaurant;
  • Fun-park, water park;
  • Seminar conference and sports tourism
  1. Information Technology-based industry:
  • Technology Park;
  • IT Park;
  • Biotech Park;
  • Software development;
  • Data processing;
  • Digital mapping;
  • Business Process Outsourcing (B.P.O.), Knowledge Process Outsourcing (K.P.O.);
  • Data center, data mining, cloud computing;
  • Web portal, web designing service.
  1. Service industry:
  • Mechanical workshop;
  • Construction business;
  • Hospital;
  • Nursing home, polyclinic, rehabilitation home operation, physiotherapy clinic, ayurveda and other alternative hospital;
  • Sports service, summing pool;
  • Garbage collection and sanitation, garbage recycling;
  • Veterinary services;
  • Health examination (services like X-Ray, CT-Scan, MRI, ultrasound and health testing lab);
  • International courier service.
  1. Manufacturing industry:
  • Livestock and fish feed production;
  • Processing and packaging of poultry and fish;
  • Manufacturing of oil fats etc. from basic raw materials;
  • Manufacturing of starch, glucose etc.
  • Manufacturing of bakery items;
  • Manufacturing of confectionery and biscuit;
  • Sugar manufacturing;
  • Beverage manufacturing (Non-Alcoholic);
  • Production and reuse of textiles, garments and clothing;
  • Manufacturing of electronic household appliances;
  • Manufacturing of goods using plastic and rubber;
  • Manufacturing of bags, sacks, suitcases, trolley bags and other carrying bags;
  • Making wooden materials except items based on traditional and cultural arts;
  • Manufacturing of toiletries such as toothpaste, soap and shampoo;
  • Manufacturing of articles using glass;
  • Production of bicycles, scooters, motorcycles and motor vehicles and producing equipment used in them;
  • Production of electric lights, switches, meters, meter fuses, wiring harnesses, compressors and others;
  • Production of medical, surgical, orthopedic products;
  • Manufacturing of electrical wires.

Minimum foreign investment threshold for Information Technology-based industries removed

Further, the Nepal Gazette notice removes the minimum investment threshold (current general threshold of NPR 20 million) for foreign investment for IT based industries.

 

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