402 Foreign Firms Pledge Rs 61.78 Billion in FDI for Nepal in FY 2023/24

In the fiscal year 2023/24, a total of 402 foreign firms committed to investing Rs 61.78 billion in foreign direct investment (FDI) in Nepal, according to the annual progress report by the Department of Industry (DoI). These foreign firms constituted 92.6 percent of the total firms registered in the last fiscal year and proposed to create employment opportunities for 19,565 people. The pledged FDI amount during this period is the second largest on record.

Nepal received its highest FDI commitment of Rs 67.45 billion in 2014/15, a year marked by devastating earthquakes. Following that peak, FDI pledges dropped to Rs 15.25 billion in 2015/16 and Rs 15.20 billion in 2016/17. The commitments rebounded to Rs 55.76 billion in 2017/18, coinciding with Nepal's first investment summit. The second investment summit in 2019/20 saw pledges amounting to Rs 37.80 billion. In the post-COVID period, FY 2021/22 recorded FDI commitments of Rs 54.15 billion.

To attract more foreign investors, particularly in small and medium-sized enterprises, the Nepalese government lowered the minimum FDI threshold from Rs 50 million to Rs 20 million in the annual budget for FY 2022/23. However, political instability led to a drop in FDI commitments to Rs 30.69 billion in FY 2022/23.

The DoI's recent report, "Foreign Investment in Nepal-2024," indicates that Nepal has received foreign investment commitments totaling Rs 425.72 billion over the past 13 years, but only Rs 148.87 billion, approximately one-third of the committed amount, has been realized.

In the last fiscal year, the government registered 434 firms, an increase of 34.78 percent from the previous year. This total includes both domestic and foreign firms. Among these, 333 were categorized as small industries, 49 as large industries, and 52 as medium industries, collectively proposing to provide jobs for 25,551 people.

The Industrial Enterprises Act 2020 classifies businesses with fixed capital up to Rs 150 million as small firms. Those with capital investments of Rs 150-500 million fall under medium firms, while firms with more than Rs 500 million in capital are categorized as large firms.

Additionally, 6,051 products registered their trademarks in the last fiscal year, along with 11 new designs and two goods taking their patent marks. There were also 113 cases filed against trademark violations.