Nepal's Tourism Sector Attracts Nearly Two-Thirds of Foreign Investment Commitments

Nepal's tourism sector has emerged as a major attraction for foreign investors, receiving nearly two-thirds of total foreign investment commitments registered during the first six months of the current fiscal year 2024/25.

According to data released by the Department of Industry, foreign investment commitments in Nepal’s tourism sector reached Rs 16.97 billion by mid-January 2025, accounting for 65.81 percent of the total Rs 25.78 billion pledged during this period.

The Department of Industry, which approves investment commitments ranging from Rs 20 million to Rs 6 billion, reported foreign investment in 157 tourism-related projects as of mid-January. This marks a significant increase compared to the 103 tourism-oriented projects registered during the same period last fiscal year.

Prashant Bohara, director of the Foreign Investment and Technology Transfer Branch at the Department, highlighted the dominance of hotel projects among investment commitments. “There are also substantial commitments in restaurants,” Bohara noted, adding that it typically takes 2-3 years for commitments in star-rated hotels to materialize into actual investments.

Deshbandhu Basnet, chairman of AB Holdings, which recently launched hotel services under France's international chain brand ‘Mercure’, emphasized the need for further investment in Nepal's tourism sector. “There is significant potential and opportunity for large-scale investment in tourism,” Basnet said, adding that his company is actively pursuing destination investments.

The Industrial Enterprises Act, 2019 has opened up extensive opportunities for foreign investment in various tourism subsectors, including accommodations (hotels, motels, resorts), restaurants, travel agencies, tour operations, and entertainment facilities such as casinos, spas, and healing centers. Adventure tourism activities, including trekking, paragliding, rafting, mountain climbing, and hot air ballooning, are also areas where foreign investment is permitted.

Additional categories under the act include cable car construction and operation, golf courses, rural tourism, homestays, craft tourism, and water parks.

The report also highlights a rise in foreign investment commitments compared to the same period last year. In the first six months of the previous fiscal year 2023/24, Nepal received foreign investment commitments totaling Rs 22.34 billion across 226 projects.