Chinese investors looking to Nepal
Print Edition
CHINESE investors have shown interest in developing a Special Economic Zone in Nepal after its parliament endorsed an SEZ Bill last month which paved the way for the private sector to establish, operate and manage such zones.
According to an official with Nepal’s SEZ development committee, Ping An Insurance (Group) of China in partnership with Lhasa SEZ have sought permission to conduct a feasibility study.
“The Chinese investors have proposed to explore the areas in Nuwakot and Kavrepalanchowk districts in central Nepal as well other potential areas,” said Chandika Prasad Bhatta, the committee’s executive director.
He said it was the first time foreign investors had showed interest in developing an SEZ in Nepal.
The Chinese proposal came after the bill made provision that SEZs could be developed and operated under a public private partnership or a sole investment from the private sector.
Committee officials said the Chinese investors met them a month ago and they had received an e-mail from the Chinese side seeking permission to explore the possibility of establishing an SEZ in Nepal.
Dinesh Ghimire, joint secretary at Nepal’s Industry Ministry, said it had been told about the proposal and it would move ahead in an administrative process.
Nepal has sought to develop 14 SEZs. But infrastructure has so far only been developed in an SEZ in the southwest city Bhairahawa.
The SEZ committee has begun infrastructure development in two other proposed SEZs. Construction of roads is ongoing in another proposed zone and a feasibility study is being conducted for another, Bhatta said.
Nepal specifically aims to attract export industries inside SEZs and more foreign investment and offers several incentives.
According to the bill, industries operating inside SEZs will get special treatment including taxes and fees to be levied and leasing of buildings and land.
It has made provision for full income tax exemption for five years for industries operating inside SEZs. Industries that use at least 60 percent domestic raw materials will get a 50 percent tax exemption for an additional 10 years while others will get an additional five-year tax exemption.
The bill bans workers from holding any form of protest that could affect the production of the factories in the zone.
Strikes have been blamed for a major constraint for attracting investment in the Himalayan country.
The bill also allows foreign investors to repatriate dividends and payment of foreign loans and do transactions in foreign exchange.
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