Country's 'red tape' troubles foreign investors

KATHMANDU:

Bureaucratic red tape regarding visas, work permit and repatriation of earnings are still big concerns for foreign investors in Nepal, despite, sizeable foreign investment friendly reforms in the past few years.

“The foreign direct investment approval process has been streamlined from 21 steps to 15, and the processing time has been reduced to 10 days from 30 days, in the recent past,” informed director at Foreign Investment Section of the Department of Industry Bipin Rajbhandari, during a Foreign Investor Interaction Programme organised by Department of Industry and International Finance Corporation, today.

“The process to acquire a business visa is also not complicated. If the investor can fulfil the criteria regarding investment and tax paid, the Department of Immigration provides a five-year business visa,” informed Rajbhandari.

“Likewise, the process of granting non-tourist visas to foreign employees has also been reduced to two weeks and only requires the involvement of four government agencies unlike earlier when it took almost six months for foreigners to obtain this visa,” he added.

Despite the reforms, most foreign investors or their representatives present in the interaction expressed their dissatisfaction with the existing bureaucratic hurdles. Representatives of Himal Power, Ncell, ZTE Corporation and Unilever Nepal, among others, called attention to the process of obtaining security clearance — permission to work in Nepal — from the Department of Labour and renewing the clearing every six months for foreign employees as one of the major bothersome processes.

Director general at the department of labour Krishna Hari Pushkar, informed that any foreign national who is working full-time at any firm here in Nepal and earning a salary, needs to obtain security clearance from the Department of Labour even if the person is the investor.

“The government needs to make sure that the foreign personnel who has entered Nepal as a business person or an employee is not involved in any unlawful activities. That is also the reason for the regular surveillance,” he informed.

“If the applicant comes to the Department of Labour with all the required documents we will issue the clearance with 24 hours,” he added.

Director general at the department of immigration Sharad Chandra Paudel also pointed out that restrictions regarding visa requirements

for foreign investors and foreign employees are to make sure that they are not involved in any harmful activities in the guise of conducting business.

Likewise, foreign investors also called attention to difficulties regarding repatriation of the earnings from Nepal to their home countries — some even pointed out that it takes more than six months to do so.

“There is not much restriction regarding repatriation of earnings from here provided the companies present the required documents such as AGM clearance and audited financial statements,” said director at Nepal Rastra Bank’s Foreign Exchange Management Department Bishnu Raj Dhungana.

“Most importantly, investors need to bring the investment through banking channels so that commercial banks issue investment certificate and report it to the central bank. This simple action will remove many hurdles for repatriation in the future,” Dhungana added.

Likewise, director general of the department of industry Dhruba Lal Rajbamshi expressed that the tendency of investors depending on intermediaries to undertake the tasks as the reason for the delay in Foreign Direct Investment approval and visa acquisition, among others.

“For most of the issues, we are bringing a new Industrial Enterprise Act soon, even as an ordinance, which will introduce policies to expedite the whole process from the beginning to the end,” he informed.

Source: THT