Foreign Investment in Nepal Sees Decline as Investors Seek Clarity on Taxation

Foreign Direct Investment (FDI) in Nepal has dropped significantly in 2024, as international investors seek greater clarity on taxation policies and business regulations.

The latest data from Nepal Rastra Bank shows that FDI declined by 18% compared to last year, with major investors citing bureaucratic delays, policy uncertainty, and high tax rates as reasons for their hesitation.

Several multinational companies, including Indian and Chinese investors, have put their planned projects on hold due to confusion over profit repatriation rules and taxation on foreign investments.

“Investors need a predictable tax policy and business-friendly environment,” said finance expert Dr. Sanjaya Pandey. “If Nepal continues to create complex tax laws and bureaucratic hurdles, we will lose out on foreign investments that could create jobs and boost our economy.”
The government has announced plans to review investment laws, but experts warn that unless practical reforms are implemented, Nepal may struggle to attract large-scale investments in sectors like hydropower, technology, and tourism