KATHMANDU, May 24 (Xinhua) -- A foreign investor will have to invest a minimum of nearly half a million U.S. dollar as Nepal's government made an upward revision in the minimum threshold for foreign direct investment (FDI), a senior Nepali official said Friday.
Yam Kumari Khatiwada, secretary at the Nepal's Ministry of Industry, Commerce and Supply, told Xinhua on Friday that a recent cabinet meeting increased the minimum threshold for FDI to 50 million Nepali Rupees (445,156 U.S. dollar) from existing 5 million Nepali Rupees (44,515 U.S. dollars).
The Himalayan country had recently introduced new Foreign Investment and Technology Transfer Act which has a provision that the government will set the minimum threshold for foreign investment and publish it in the Nepal Gazette.
"The Nepali government made upward revision in minimum threshold for foreign investment as it has been several years that the existing threshold was introduced," Khatiwada said. Nepali government had increased the minimum threshold to 44,515 U.S. dollars in September 2012 from 20,000 U.S. dollars earlier.
"On the other hand, Nepali investors are themselves capable of making small scale investments and the new threshold for FDI gives the Nepali investors more room for their own investments without competition from outside," said Khatiwada.
Nepali officials said that overcrowding of small foreign investors would not fulfill the country's need for large scale investments. Despite rise in threshold by 10 times this time, Nepali officials said it is still a small amount compared to the demand of Nepal's private sector.
"Nepali private sector had suggested for keeping threshold for FDI significantly higher than what the government fixed," Binod Prakash Singh, director general of Department of Industry, an agency under the Industry Ministry which registers industries, told Xinhua on Friday.
According to Department, Nepal received FDI pledges of 505 million U.S. dollars in the last fiscal year 2017-18 that concluded in July 2018.
The Nepali government, which has targeted to transform the Himalayan country into a middle income country by 2030, aims to attract large scale domestic and foreign investment in the country to achieve the target.
