14th September 2025, Kathmandu
Nepal’s foreign investment climate, already facing significant challenges, has been put under new pressure following recent protests that specifically targeted multinational companies.
Foreign Investment Nepal
The attacks have sent a chilling message to the global investment community, further eroding confidence in the country’s economic stability.
During the recent unrest, the Hilton Hotel was completely destroyed by fire, while the Hyatt Regency and Ncell offices suffered partial damage.
These high-profile attacks on international businesses serve as a stark reminder of the risks associated with investing in a politically unstable environment.
The impact of such events is reflected in the country’s declining foreign direct investment (FDI) figures. According to data from the Nepal Rastra Bank, net FDI inflows have fallen dramatically, dropping to just Rs 730 crore in FY 2079/80. This is a significant decline from the Rs 1,950 crore recorded in FY 2077/78.
Despite hosting FDI from 60 countries across 867 enterprises, with India, China, Singapore, Ireland, and South Korea as the leading investors, Nepal’s foreign capital remains a tiny fraction of its economy, contributing only 0.3% of its GDP.
Experts and business leaders are sounding the alarm. Former Finance Secretary Rameshore Khanal stated that the destruction of a well-known international brand like the Hilton sends a clear negative signal to potential investors worldwide.
Economists are calling for urgent reforms to boost FDI to at least 3% of GDP to stimulate economic growth.
The key deterrents to investment are not just the recent protests but a persistent combination of factors. These include:
Policy inconsistency and frequent changes in government.
Political instability, which creates an unpredictable business environment.
Bureaucratic delays and complex regulatory processes.
To reverse this trend and revive international confidence, stakeholders agree that Nepal must take decisive action. This includes:
Improving infrastructure.
Ensuring the security of investors and their assets.
Strengthening regulatory frameworks to create a more reliable and transparent business environment.
Addressing these fundamental issues is essential for Nepal to move from a fragile economy to one that can attract and sustain the foreign investment necessary for long-term prosperity.
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