KATHMANDU: Requiring authorized foreign companies to complete their investment pledges within a given timeframe or risk penalties, the Department of Industry (DoI) has issued a warning. Foreign investors have 35 days to begin operating their businesses and withdraw the monies they have placed, according to a public notice from the DoI. If this instruction is not followed, the deposited funds will be taken back.

The DoI's decision is in response to worries that Nepal is not receiving as much foreign direct investment (FDI) as promised. In the first ten months of the previous fiscal year, just fifteen percent of the committed foreign direct investment (FDI) was achieved, as per data from the DoI and Nepal Rastra Bank (NRB). Between mid-July and mid-May of FY 2023/24, just Rs 8.16 billion of the Rs 54.86 billion in investment promises were actually received.

Throughout the entire fiscal year 2023/24, a total of 402 foreign firms pledged investments amounting to Rs 61.78 billion, marking the second-largest pledged amount to date. Historically, actual investment realization has been significantly lower than the pledged amounts, and current trends suggest that this pattern will likely continue.

The DoI's report titled “Foreign Investment in Nepal-2024” reveals that, over the past 13 years, Nepal has received investment commitments totaling Rs 425.72 billion, but only Rs 148.87 billion has been actualized. This represents just one-third of the committed amount. The World Bank’s Nepal Development Update 2022 highlights that Nepal’s FDI inflow is a mere 0.5 percent of its GDP, the lowest in South Asia, and suggests that easing regulatory procedures could improve this situation.

In response to frequent cases of unfulfilled investment pledges and the misuse of business visas, the DoI has tightened its regulations, limiting business visa issuance to three months. The department also encourages foreign investors to report any issues related to discounts, concessions, visas, foreign currency, land use, industrial security, or bureaucratic obstacles.