Nepal’s Hotel and Tourism Sector

Foreign Direct Investment (FDI) in Nepal’s hotel and tourism sector has been growing, reflecting the country’s potential as a destination for international investors.

Tourism as a Leading Sector: Tourism is one of the leading sectors for foreign investment in Nepal. The country’s rich cultural heritage and natural beauty make it an attractive destination for tourists, which in turn drives investment in hospitality and hotel industries.

Investment Growth: In the fiscal year 20/21, foreign investment in Nepal’s tourism industry, including hotels, rose significantly to NPR 18,000 million. In the first half of 2023, more than NPR 12 billion of investment was committed, with the Nepal Hotel Association confirming an exponential surge in foreign investment.

Legislative Framework: The Foreign Investment and Technology Transfer Act (FITTA) 2019 and the Foreign Investment and Technology Transfer Regulations (FITTR) 2021 outline the legislative and procedural aspects of foreign investment in Nepal. The Tourism Act 1978 consolidates legislative provisions for the tourism, hotel, and hospitality sectors.

Investment Process: For foreign investment not exceeding NPR 6 billion, applications must be presented to the Department of Industry. For investments exceeding this amount, applications must be forwarded to the Investment Board of Nepal.

Investment Opportunities: 100% FDI is permitted in tourism and hospitality sectors, including the development of hotels, resorts, and recreational facilities.

The hotel industry in Nepal has established itself as an attractive option for foreign investors, with significant investments being made to develop the infrastructure needed to support the growing number of tourists visiting the country. This trend is expected to continue as Nepal further positions itself as a key player in South Asia’s tourism market.