Major Business Investment Opportunities in Nepal

Experts consider agriculture and mining as top sectors with huge investment potential for future!
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Major Business Investment Opportunities in Nepal

Nepal is one country that is witnessing a fast-paced development in recent times, globally.

Driven by the long-awaited political transformation, the country is currently riding high on development agendas inspired by the recent progress it has seen in various fields.

In the process, the country is paying high regard to development at the local level and is welcoming stakeholders from across the world to tap its untapped potential.

A Glance at major investment opportunities & ideas in Nepal:

1) Energy- Hydropower, Green Energy and More!
Nepal is rich in natural resources that make the country viable for potential investment opportunities. Its perennial water bodies such as lakes and rivers flowing round the year and wide forest cover offering favorable climate speak the country’s energy potential, and abundant hydropower source is one that the country boasts of! Do you know Nepal accounts to nearly 3 percent of the world power generation through its hydropower sector?

This clearly illustrates the country’s investment potential in hydropower sector! Taking it further, the country has been welcoming both local and global partners to invest in its hydropower projects. Few attempts by Nepal Government made in this regard include Himalayan Hydropower Expo 2018, inviting Bangladeshi investment, welcoming foreign investment in mega hydropower projects, developing national-pride projects,  encouraging power trading with friendly nations, among various others.

Besides, the country has also been promoting clean energy solutions as part of its transition to green vehicles run by biofuels, electric vehicles, LPG-free mission, and various other initiatives.

Apart from this, the country has also been advocating for environmental protection measures through its eco-friendly policies, waste management techniques and has also been actively developing model villages like Dhankuta that have set classic examples for successful implementation of such measures.

So, definitely there is lot more that the country’s energy sector offers for potential investors!

2) Agriculture 
Nepal is an agriculture-driven nation and offers rich potential in the agriculture sector. The country produces varieties of crops all through the year and is known for its traditional forms of farming through organic methods. Owing to this rich potential and growing middle-class population, most experts believe agriculture will be one of the top Nepali sectors with huge investment potential over the next 20-30 years.

3) Tourism
Tourism forms the backbone of Nepali economy. Tradition, heritage and the country’s world-famous tourism centers (some of them the UNESCO Heritage sites) speak the tourism potential of Nepal. Making major strides over the years, the country is now aiming at a 2 million tourist arrival target under its Visit Nepal 2020 campaign. Under its tourism development plans, the country is also keen on developing more regions as tourism hubs, making it an opportunity for potential investors. Medical tourism is another key sub-area connecting tourism and healthcare sector with huge investment potential.

4) Hotel & Hospitality
The rise in tourism activity in any country means increasing public movement across that country’s famous destinations. This directly reflects in the growth of the hotel & hospitality industry of that specific market. So, is the case with Nepal. Increasing tourism activity led the country to plan big on its hotel industry to woo tourists. Towards this end, the government is also pushing for more investment on the development of luxury hotels that match the requirement of tourists of any range. Such potential investment opportunities in the Nepal Hotel & hospitality industry.

5) Mining
Mining is another industry where Nepal holds rich investment potential. The rise in food inflation and demand for luxury living among populace leads to the demand for precious metals. Besides, money savings also involve the saving of precious metals as an investment in banks for good returns. Apart from that, manufacturing of electronic and electrical equipment, among other areas demand usage of metals. All these factors mean high demand for metals. So, the mining industry is definitely the one with huge investment potential. Experts believe the Nepali mining industry holds good potential for the future.

6) Healthcare
Efficient healthcare services are still a distant goal for Nepal and is in dire need of healthcare services as a result of weak healthcare infrastructure. Global and local healthcare surveys show a high number of rural Nepalis suffering from some form of the disease. Besides, vulnerability to natural disasters that also affect basic amenities like food and water poses serious healthcare challenges to Nepalis. To address health concerns at all levels, the country needs a well-built healthcare infrastructure which would require investment. So, given the existing weak healthcare outreach, the untimely supply of medicines to the needy and other concerns, the country is definitely in need of investment in the healthcare sector.

7) Food
Quality food is what everyone looks for a safe and secure living. Despite being an agri-driven economy, Nepal often faces challenges in the food industry, which could be a shortage of supplies, inability to store agricultural produce, implementation of improper methods in growing food, feeding the right food to children, among others. So, investment in food industry can address the aforementioned challenges and fulfil the industry’s infrastructure towards providing a quality and healthy food.

8) Start-ups & SMEs
The world is currently witnessing the start-up culture. With a large youth population, Nepal is undoubtedly a country with huge start-up potential. All ideas that stem up might not have financial backing at times. So, this is where investment steps in. Potential investors have ample opportunities to invest in Nepal’s start-up industry that is today witnessing a good rise owing to interest among youth to develop something new. Besides, there are also many Small Medium Enterprises (SMEs) in dire need of financial support for continuing their business.

9) Connectivity & Transport
Nepal is currently undergoing fast-paced development, which sheds light on its infrastructure sector, especially transportation. As part of its development initiatives, the government has already planned huge investment on transport infrastructure development including roads, railways, and airways. Considering the weak local infrastructure, the country would definitely welcome investment in developing the local transport infrastructure, to facilitate internal movement, trade or connectivity with other nations.

10) Information Technology
Nepal holds huge potential in Information Technology. Increasing internet penetration and growing mobile usage, all driven by digital trend, are boosting IT trend in Nepal, resulting in huge demand for the industry. Besides, integration of IT solutions like apps in every other sector is adding to the industry’s potential. So, is the huge scope for potential investment in Nepal IT industry, which is currently at a budding stage.

11) Education
Education is one key sector that is awaiting a huge support in Nepal. From primary level education to a higher level, Nepali education sector is still yet to reach its full potential, both in terms of standards and infrastructure. Though many countries and donor agencies have come in support, Nepali education sector is still open for huge investment towards the improvement of institutional infrastructure, access to remote communities and teaching standards and offering advanced courses at the higher level.

12) Employment & Skill Development
Migration is one common word we keep hearing in case of Nepal, as many of the country’s populace move out to foreign destinations for some form of employment. Today, Nepalis can be spotted almost in every country in skilled or unskilled jobs. So, the country definitely holds huge potential in domestic employment, which is today facing serious challenges. On the other hand, the government is putting its efforts to boost employment opportunities locally through various skill training programs, among others, which directly means the scope of development in Nepali employment sector.

13) Telecommunication
Telecommunication sector in Nepal is already performing its bit in meeting the local needs. However, increasing mobile usage and internet users is posing more challenges to the sector to rethink on its strategies to meet the growing user demands in terms of connectivity and data services. So, the sector definitely holds high investment potential.

What Makes Nepal Suitable for Investment?

The requirement on one side, there should also exist a supportive environment to invest in any area. Following factors explain the openness of the investment climate in Nepal:

1) Foreign Direct Investment
Nepal has in place a special Investment Promotion Board, chaired by the Prime Minister, to attract foreign investments across sectors and boost the economy. So, potential investors can also get the best out this great opportunity that Nepal offers through its Board. Besides, the government has proactive in welcoming Foreign Direct Investment in various domestic sectors thus encouraging foreign investment in the local projects.

2) Ease of Doing Business
Nepal Government always had a conducive environment for potential investors, majorly because of improving ease of doing business. Very recently, the country has moved two points up in its global Ease of Doing Business ranking. The World Bank’s Doing Business (DB) 2018 reported rise in Nepal’s doing business index to 105th position, citing the country’s improvement in key areas such as protecting minority investors, starting a business, registering property, paying taxes, trading across borders, enforcing contracts, resolving insolvency, among others.

3) Easy Human Resource
A majority percentage of working population make Nepal a suitable place for investment. Owing to the country’s budding stage, there will be a huge demand for employment opportunities, which makes human resource availability easier and boosts profitability for investors investing in or developing local projects. One can find cost-effective labor in Nepal whose wages are usually around USD 76 per month.

4) Strategic Position
Nepal is of high importance for the world because of the two Asian giants, India and China, neighboring it. As the country enjoys duty-free access on its trade with the two countries, that makes it easier for the investor to leverage the advantage of imports at a lower cost. Besides, natural resources that support any project such as water and electricity are also rich in Nepal, which make it more suitable.

The Conclusion
Overall, Nepal holds huge investment potential in almost every sector owing to its ongoing development that is currently at a budding stage in majority areas. Undoubtedly, Nepal offers potential investment prospects for potential investors!

October 18, 2018 |

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