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More Homework Needed On Foreign Investment Law In Nepal
English.news.cn (Xinhua)
May 26, 2013: While the interim election government in Nepal is preparing to bring new Foreign Investment and Technology Transfer Ordinance of 2013 in this fiscal year to allow its citizens to invest abroad, experts and business leader in Kathmandu said that it needed more homework. The experts from various quarters today displayed their concerns about the ambiguity in various provisions in the draft bill.
The draft bill has provision for allowing Nepalese companies to invest up to one million U.S. dollars at one time with the permission from the central bank. But many questions are left unanswered.
The first ever billionaire of Nepal, industrialist Binod Kumar Chaudhary is exited with the idea of paving the way for Nepalese investors to invest abroad, but he told, there are many issues to be clear in the draft. "There are still some confusion over the minimum threshold and specific sectors to attract foreign direct investment, as the provision made in the draft bill such as for allowing foreigners to open only the three-star or better quality hotels seem unreasonable," he said.
The minimum threshold of 200,000 U.S. dollars for the foreign direct investment in Nepal will bar the foreigners to run small but innovative enterprises with newer technologies in the opinion of billionaire Chaudary, also the President Emeritus of Confederation of Nepalese Industries (CNI). The draft bill should have clear provisions for allowing Nepalese to invest beyond the country, and there should not be a wall between resident and non-resident Nepalis, he opined.
"We will certainly bring the ordinances to make provisions for foreign investment and technology transfer, industrial enterprises, accreditation and special economic zone by the end of FY 2012/13," Minister for Finance, Industry, Commerce and Supplies, Shankar Prasad Koirala informed.
The government will also approve separate policies on foreign direct investment and intellectual property before bringing a number of ordinances.
A non-governmental organization NEAT with funding of USAID: the development agency of United States of America prepared the draft bill on foreign investment and technology transfer. Experts said that the Government of Nepal owned without proper homeworks.
"There is no clear statutory provision on what scientific ground the central bank will evaluate the proposal of aspirant companies to invest abroad," commented Dr. Ramesh Chitrakar, project director of Management at Center for Economic Development and Administration (CEDA), a research wing of Tribhuwan University. It is not clearly stated in the draft bill, how many times and how much amount a company can take beyond the boundary of Nepal for investment purpose, which could result in capital flight, Dr. Chitrakar added.
Senior Economic Advisor to the Finance Ministry, Dr. Chiranjivi Nepal said that proper revision of the existing foreign investment law should be done time to time. But he expressed his reservation on some clauses of the draft bill about the foreign investment share allowed in the industry related to the basic services such as health, education and transportation. The draft bill has proposed to allow foreign investment up to 51 percent in those industries whereas some 80 percent of foreign investment in the media sector. "Without proper research, we cannot say how much foreign investment should be allowed in which sector and to secure the national interest, industry dealing with basic services and media should not be handed over to foreigners," Dr. Nepal told.
Senior Advocate Pawan Ojha is hesitant about the proposed provision for allowing foreign investors collect internal debt in the Nepalese market issuing bonds and debentures in foreign currencies. "We need foreign investment to finance larger projects and productive industry rather than to collect debt from Nepali market, this loophole will possibly be used to drain capital from Nepal," he said. He urged the government not to increase the minimum threshold of foreign investment from existing 50,000 U.S. dollars to proposed 200,000 U.S. dollars owing to the possibility of hindering investment in small medium enterprises.
According to Ojha, the proposal for the exemption of income tax for 15 years in case of the investment in hydro power and infrastructure sector will discriminate the Nepalese investors as there is no such provision for domestic investors in existing Income Tax Act of 2002.
Editor: Fu PengMore Homework Needed On Foreign Investment Law In Nepal
English.news.cn (Xinhua)
May 26, 2013: While the interim election government in Nepal is preparing to bring new Foreign Investment and Technology Transfer Ordinance of 2013 in this fiscal year to allow its citizens to invest abroad, experts and business leader in Kathmandu said that it needed more homework. The experts from various quarters today displayed their concerns about the ambiguity in various provisions in the draft bill.
The draft bill has provision for allowing Nepalese companies to invest up to one million U.S. dollars at one time with the permission from the central bank. But many questions are left unanswered.
The first ever billionaire of Nepal, industrialist Binod Kumar Chaudhary is exited with the idea of paving the way for Nepalese investors to invest abroad, but he told, there are many issues to be clear in the draft. "There are still some confusion over the minimum threshold and specific sectors to attract foreign direct investment, as the provision made in the draft bill such as for allowing foreigners to open only the three-star or better quality hotels seem unreasonable," he said.
The minimum threshold of 200,000 U.S. dollars for the foreign direct investment in Nepal will bar the foreigners to run small but innovative enterprises with newer technologies in the opinion of billionaire Chaudary, also the President Emeritus of Confederation of Nepalese Industries (CNI). The draft bill should have clear provisions for allowing Nepalese to invest beyond the country, and there should not be a wall between resident and non-resident Nepalis, he opined.
"We will certainly bring the ordinances to make provisions for foreign investment and technology transfer, industrial enterprises, accreditation and special economic zone by the end of FY 2012/13," Minister for Finance, Industry, Commerce and Supplies, Shankar Prasad Koirala informed.
The government will also approve separate policies on foreign direct investment and intellectual property before bringing a number of ordinances.
A non-governmental organization NEAT with funding of USAID: the development agency of United States of America prepared the draft bill on foreign investment and technology transfer. Experts said that the Government of Nepal owned without proper homeworks.
"There is no clear statutory provision on what scientific ground the central bank will evaluate the proposal of aspirant companies to invest abroad," commented Dr. Ramesh Chitrakar, project director of Management at Center for Economic Development and Administration (CEDA), a research wing of Tribhuwan University. It is not clearly stated in the draft bill, how many times and how much amount a company can take beyond the boundary of Nepal for investment purpose, which could result in capital flight, Dr. Chitrakar added.
Senior Economic Advisor to the Finance Ministry, Dr. Chiranjivi Nepal said that proper revision of the existing foreign investment law should be done time to time. But he expressed his reservation on some clauses of the draft bill about the foreign investment share allowed in the industry related to the basic services such as health, education and transportation. The draft bill has proposed to allow foreign investment up to 51 percent in those industries whereas some 80 percent of foreign investment in the media sector. "Without proper research, we cannot say how much foreign investment should be allowed in which sector and to secure the national interest, industry dealing with basic services and media should not be handed over to foreigners," Dr. Nepal told.
Senior Advocate Pawan Ojha is hesitant about the proposed provision for allowing foreign investors collect internal debt in the Nepalese market issuing bonds and debentures in foreign currencies. "We need foreign investment to finance larger projects and productive industry rather than to collect debt from Nepali market, this loophole will possibly be used to drain capital from Nepal," he said. He urged the government not to increase the minimum threshold of foreign investment from existing 50,000 U.S. dollars to proposed 200,000 U.S. dollars owing to the possibility of hindering investment in small medium enterprises.
According to Ojha, the proposal for the exemption of income tax for 15 years in case of the investment in hydro power and infrastructure sector will discriminate the Nepalese investors as there is no such provision for domestic investors in existing Income Tax Act of 2002.
Editor: Fu Peng
