Task force for amending dozen laws before Investment Summit
A task force formed by the government has recommended amendments to a dozen laws and regulations before the 3rd Nepal Investment Summit in 2024.
Among the recommendations made by the task force are allowing Nepali ICT/IT industries to open branch offices and units in foreign countries, enabling industries and projects to seek bank loans by pledging their land as collateral, and increasing the landholding ceiling for industries.
The government is organizing the 3rd Nepal Investment Summit in Kathmandu on April 28-19.
If the recommendations of the task force are implemented, domestic and foreign investors will not face problems related to forests and landholding ceilings, and also don’t have to prepare supplementary environmental impact assessments (EIA), among others.
The government formed the task force to identify issues that need improvement in the existing political, legal, structural, and procedural arrangements to make the investment environment more favorable. The task force, led by Eknarayan Aryal - the Secretary (Economy & Infrastructure Development) of the Office of the Prime Minister and Council of Ministers, identified the need for improvements in existing laws and submitted a legal reform plan. The recommendations were submitted to Chief Secretary Baikuntha Aryal a few days ago.
The task force has recommended amending the Foreign Investment and Technology Transfer Regulations to allow industries and projects to take bank loans by pledging their land as collateral. Currently, industries and projects cannot secure bank loans by pledging their land as collateral.
To attract more industries to Special Economic Zones, the task force has suggested easing limits on export and local distribution for industries based in SEZs. Currently, these industries can distribute a maximum of 25 percent of their production in the local market, while the remainder has to be exported.
Likewise, the task force has recommended allowing only national pride/priority projects to utilize forest areas. Realizing that it is becoming difficult for projects to buy and provide equivalent land for forest areas to the government, the taskforce has suggested allowing projects to deposit money equivalent to the land value into the Forest Development Fund.
Similarly, the task force has recommended empowering the Civil Aviation Authority of Nepal by providing more rights related to ground handling and international flight operations. It has also suggested that companies and projects with more than Rs 6bn in capital can register with the Department of Industry if the promoter wishes. Currently, it is mandatory for industries or projects with capital above Rs 6bn to register with the Office of the Investment Board Nepal.
Regarding the existing provision that requires projects to conduct a supplementary EIA if more trees need to be felled than previously estimated, the task force has recommended scrapping the provision of supplementary EIA for projects to fell an additional 10 percent of trees.
The task force has also recommended amending the Land Acquisition Act to allow concerned ministries to appoint Officers for Preliminary Action for land acquisition. Currently, such officers are appointed by the cabinet.
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