NEPAL - FOREIGN INVESTMENT OPPORTUNITIES
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INFRASTRUCTURE
INDUSTRIAL CENTRES
Nepal has made good progress in recent years in the development and improvement of basic infrastructure facilities required for an accelerated programme of economic and social development. Efforts are continuing to further improve various facilities required for the development of trade, industry and commerce to bring them in line with modern international standards. The urban centres of Kathmandu valley (Kathmandu, Patan, Bhaktapur) and Pokhara and the industrial towns in the Terai region, Biratnagar, Janakpur, Birgunj, Nepalgunj and Hetauda offer good facilities for the establishment of medium and large scale industries.
INDUSTRIAL DISTRICTS
Industrial development is also being achieved through the development of industrial districts where essential infra-structure facilities including buildings are provided. Eleven industrial districts scattered throughout the country provide satisfactory sites for industrial development. These are in Balaju, Patan, Bhaktapur, Hetauda, Pokhara, Dharan, Butwal, Nepalgunj, Birendranagar, Rajbiraj, and Dhankuta.
EXPORT PROCESSING ZONE
The government has taken a decision to establish an Export Processing Zone in close proximity to the Tribhuvan International Airport in Kathmandu. This facility will cater to export oriented industries.
AIR TRANSPORTATION
Nepal being landlocked, considerable attention is paid to the development of air transportation to support the growth of trade and the fast expanding tourist industry. Nepal is served by one international airport in Kathmandu and 42 domestic airports some of which are all fairweather some fair weather. Kathmandu, the capital is connected by regular air service to London, Frankfurt, Moscow, Dubai, Karachi, New Delhi, Calcutta, Bombay, Varanasi, Dhaka, Bangkok, Singapore, Lhasa, Thimpu and Hongkong. The Royal Nepal Airlines-RNAC, operates international flights using Boeing 757 and 727 aircrafts. Other airlines operating through Kathmandu are Indian Airlines, Biman Bangladesh Airlines, Thai Airways International, Pakistan International Airways, Singapore Airlines, Druk Air, Dragonair, Lufthansa, China South West Airlines and Aeroflot.
Due to the landlocked nature cargo services are opearted by some airlines to meet the growing demand for airfreight.
The hilly and inaccessible areas and the Terai regions are linked by domestic air services operated by RNAC through the 42 domestic airports. Emphasis is given to strengthenthese services to promote balanced development in trade, commerce and tourism.
ROAD TRANSPORT
The country is linked North-South and East-West by a system of roads whose total length exceeds 6000 Kilometers. Of this length roads 2757 Kilometers are black topped whilst the rest are gravel and dirt roads. The major highways are the Mahendra Raj Marg (East-West highway), the Tribhuvan Raj Marg (Kathmandu-Hetauda), The Prithvi Raj Marg (Kathmandu-Pokhara), Pokhara- Sunauli highway, and the Arniko highway (Kathmandu-Kodari).
SEA TRANSPORT
Although landlocked, Nepal has access to the sea through the port of Calcutta, in India. The port of Calcutta is about 1150 Kilometers from the Nepalese border close to Biratnagar. The average transit time through India could be 3 to 8 days. Transfer of freight by containers from Calcutta is becoming increasingly important. This tends to reduce the transit time. Registered clearing agents with good reputation could assist in the smooth and speedy clearance of goods through the port of Calcutta.
TRANSIT FORMALITIES FOR GOODS ENTERING VIA CALCUTTA
Nepal bound sea cargo comes through Calcutta, the only sea-port the Government of India has permitted for transit facility to Nepal. After clearance by Indian port and custom authorities in Calcutta, cargo is forwarded by rail/road to the land custom post of the Indo-Nepal border.
The procedure for clearing and forwarding of Nepal cargo in Calcutta port is explained hereunder:
a) Appointment of Clearing Agent:
The importer has to appoint and authorise a clearing agent in Calcutta who should be duly registered with the Indian port and custom authorities. The responsibility of the clearing agent is to clear the cargo from the shipping line, Indian port and custom authorities and to forward it to the relevant land custom post of the Indo-Nepal border.
b) Documents for Clearing:
The following documents are required for clearing and forwarding the cargo in Calcutta Port:
i. Invoice of goods
ii. Bill of lading
iii. Packing and weight list
iv. Insurance policy
v. Certificate og origin
vi. Import license issued by HMG, Nepal.
c) Procedure for Clearing at port:
i All the documents for clearing should be filed with shipping line, port and custom authorities for clearing and possession of cargo.
ii. Cargo is unloaded from ship by the port authorities. If the cargo is in containers and these are not to be forwarded to Indo-Nepal border, then destuffing is done at the cost of the importer.
iii. Shipping line gives possession of cargo to the importer's clearing agent after examining all the documents and the original Bill of Lading.
iv. The importer's clearing agent gets the cargo appraised by Indian custom authorities, who open cases and make inspection in accordance with invoice, packing list etc. After satisfactory inspection, custom authorities make endorsement on import licence and other papers and do the stripping and sealing of the cases.
v. Importer's clearing agent should obatain transit insurance policy for Indian import duty leviable in favour of Collector of Customs.
vi. After completion of these formalities the Custom authorities make Custom Transit Declaration Form CTD whic allows movement of Nepal cargo from Calcutta port to the land custom post at Indo-Nepal border.
vii. The cargo is loaded to trucks, containers, rail and forwarded to relevant land custom post ant Indo-Nepal border.
viii. Any shortage, damage, pilferage at Calcutta docks and short delivery by shipping line has to be surveyed by insurance surveyer at Calcutta docks for lodging claims with insurance company.
ix. When the consignment reaches Indo-Nepal border the Indian customs post endorses the CTD form certifying that the cargo has entered Nepal territory. the endorsed CTD form should be returned to Calcutta custom within 30 days.
x. The consignment reaches the Nepal customs office at border and the necessary clearance is done by importers or authorised representatives.
HYDRO_ELECTRIC POWER
Nepal is well endowed with enormous hydro-power resources. This comparatively cheap source of power provides a distinct advantage for Nepal to embark on programme of rapid industrialization. The present power generating capacity is 288 MW of which 88 percent is accounted for by hydropower. Plans are underway to implement a major hydro-electric-project-Arun III with a total capacity of 402 MW. This will be implemented in 2 stages with the first stage 268 MW project expected to be comissioned in year 2000. In order to meet increasing demand for power in the interim period, steps will be taken to consolidate and strengthenexisting generating facilities with a view to increase efficiency in production and distribution of energy. It is also possible that a medium size hydro-electric plant Kali Gandaki 'A' with a capacity to produce 90 MW may be installed before Arun III. Other major projects on which preliminary studies have been undertaken include the Upper Arun hydro-electric project (335 MW) and the West
Seti hydro-electric project (360 MW).
FINANCIAL INSTITUTIONS
The financial system in Nepal consists of the Nepal Rastra Bank (the Central Bank of Nepal), five commercial banks, and two development finance institutions.
The Nepal Rastra Bank's main function is to regulate and supervise the banking institutions in Nepal. It issues currency, determines the daily buying and selling rates of foreign currencies and implements monetary policy to secure financial stability and growth in the economy.
Industrial, agriculture and commercial credit is provided by five commercial banks operating through branches spread throughout the country and two development finance institutions. Besides providing banking services, commercial banks provides industrial term loans and short term working capital loansto business and industrial enterprises. Nepal Bank Limited and Rashtriya Banijya Bank are domestic commercial banks with a wide network of branches in the country. These foreign joint venture banks, Nepal Arab Bank, Nepal Indo-Suez Bank and Nepal Grindlays bank also provide full fledged banking services. The Standard Chartered Bank, Citi Bank and Compagnie Financiere De Cic & De L 'Union Europeene Group run representative offices in Kathmandu.
The Nepal Industrial Development Corporation and the Agricultural Development Bank extend assistance to investors in industrial and agricultural projects, respectively.
Insurance coverage on business and commerce could be obtained through the Rashtriya Beema Sansthan or other insurance agencies which operate in Kathmandu.
TELECOMMUNICATION
Nepal has made good progress in developing her telecommunication services. An international telephone service based on an earth sattelite communication system and automatic telex and telfax service provide efficient links with the outside world for the development of trade, commerce, industry and tourism. The government plans to further improve these facilities to cater the increasing demand.
LAND
The Land Reform Act of 1964 introduced land ceilings of 16.4 hectares in the Terai, 2.7 hectares in the Kathmandu valley. Land for industrial purposes could be purchased from private owners. Land prices range from Rs. 500,000 to rs. 1,000,000 and above per ropani (5476 sq. ft.) in Kathmandu to Rs. 5000 to Rs. 50,000 and above per ropani in the hilly regions. In the Terai prices range from Rs. 40,000 to Rs. 250,000 per ropani.
HOTELS, HOUSING, EDUCATION AND RECREATION
Kathmandu, the capital of Nepal, is well served with good hotels ranging from 5 star hotels to other categories of hotels, guest houses and motels. A number of restaurants offer a variety of international cuisine. Western style houses with modern conveniences are available in Kathmandu. International schools in Kathmandu provide facilities for the education of expatriate children. Recreational facilities for expatriate personnel are available through international clubs and through some of the five star hotels. Kathmandu also has two golf courses. For the more adventurous, Nepal offers many opportunities for trekking, mountaineering, river rafting and jungle safaris.
INDUSTRIAL SUPPORT SERVICES
The Economic Services Centre-ESEC, provides a package ofnon-banking services and helps interested parties to invest in industrial ventures in the country. The centre provides assistance in carrying out techno-economic feasibilitiy studies. It also conducts management training programmes of interest to both the public and private sectors.
The Nepal Industrial Development Corporation- NIDC, extends loans to industry, guarantees loans raised by industrial enterprises through commercial banks and also participates as an equity investor in technically feasible and economically sound projects.
The Securities Exchange Centre- SEC, established under the Securities Exchange Act of 1984, promotes the economic welfare of the public through protection of the interests of investors and encourages wider participation of the public in the ownership of business enterprises. It provides an useful mechanism for the mobilisation of domestic capital through the issues of shares in public companies and thereby creates opportunities for braoadbasing the ownership of companies.
The Trade Promotion Centre- TPC, acts as a catalyst to create, develop and promote the export of Nepalese products in international markets. It offers a range of services to exporters including product studies and market surveys, develops systems which will facilitate smooth flow of goods and services and facilitates the participation of Nepalese businessmen in International Trade Fairs to promote export development.
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HMG
Ministry of Industry
Foreign Investment Promotion Division
Singha Durbar
Kathmandu, Nepal
Tel: 216692
Fax: 220319
Tlx: 2610MOI NP
Copyright 1996 by Foreign Investment Promotion Division, Ministry of Industry, HMG
Webmaster: Anita Shrestha, AMAA, INC