What Is The Role Of the Remittance Of Nepali Expatriates For Investment In Major Sectors Of The Country?

Nepali workers send money to Nepal from abroad to invest in demanding sectors of the country. Nepal has pursued a liberal foreign investment policy and has worked to establish an investment-friendly environment in order to attract FDIs. As a result, our tax rates are among the lowest in the world, and we have an excellent reputation for ease of doing business. Hydropower, industrial manufacturing, services, tourism, construction, agriculture, minerals, and energy are all profitable investment opportunities.

Nepal promotes foreign investment in the form of joint ventures with Nepalese investors as well as 100% foreign-owned businesses. The few industries that are closed to foreign investment are either reserved for domestic entrepreneurs to support small local businesses and conserve indigenous skills and knowledge, or they are prohibited for national security considerations. Foreign investment in all sectors needs the approval of the GoN. Cottage industries are not allowed to accept foreign investment, and expatriates mostly send money to Nepal online for investment in cottage industries. In cottage industries, however, there are no restrictions on technology transfer.

What Are The Major Investment Sectors In Nepal For Foreign Direct Investment?

Nepal is a tiny contributor to the world economy, with an annual Gross Domestic Product (GDP) of roughly USD 24.9 billion and total trade of USD 12.9 billion. Remittances have become a significant contributor to rising household income and the country’s GDP. Remittance money, which is online money transfer to Nepal by Nepalese working abroad and helps to reduce the country’s poverty rate, accounts for about 30% of Nepal’s GDP. Despite the significant potential, particularly in agriculture, tourism, energy, information technology, and infrastructure, pervasive corruption, onerous bureaucracy, and poor execution of rules and regulations have kept investors at bay.

Nepal’s positioning between India and China – two of the largest global markets and fastest-growing economies – could create chances for international investors, especially given Nepali-made products’ market access preferences in India. Nepal has natural resources with substantial commercial potential, in addition to a strategic market location.

Hydroelectric power, which Nepal has a commercially viable capacity of 40,000 megawatts (MW), could be a key source of revenue and assist fulfil South Asia’s expanding energy needs. In addition, agriculture, tourism, the IT sector, and infrastructure are other areas with significant investment opportunities and developing sectors due to money transfer to Nepal by investors as foreign direct investment.