A team from the American Chamber of Commerce in Nepal (AMCham Nepal) has met with Finance Minister Rameshwor Khanal with the aim of further strengthening Nepal-US economic relations.

During the meeting, MCHAM Nepal has presented practical solutions to the government, highlighting the major policy challenges faced by the private sector.

MCHAM Nepal has made concrete suggestions on eight primary policy issues related to foreign investment promotion, tax system reform, digital infrastructure, energy and financial sectors.

During the meeting, MCHAM Nepal representatives noted that although Nepal has great potential for establishing hyperscale data centers due to its clean hydropower resources and geographical conditions, large foreign investments have not been attracted due to the lack of stability of power supply, high-capacity connectivity, approval process and regulatory clarity.

‘Nepal is a naturally suitable country for data center investment, but investors have not been able to reach a decision due to the lack of a clear policy and integrated framework. Therefore, the government needs to be serious about this issue,’ said MCHAM Nepal President Kailash Vijayananda.

There is also a demand to prepare a structured pipeline of FDI-ready projects targeting American investors and to recognize MCHAM Nepal as a formal partner in investment promotion.

Stating that foreign investment is necessary in Nepal, Chairman Vijayananda said that if the collaboration between the private sector and the government is strengthened, US investment in Nepal could increase significantly.

A demand has been made to prepare a pipeline of FDI-ready projects targeting US investors and to recognize MICHAM Nepal as a formal partner in investment promotion. During the meeting, businessmen also raised the issue of the government creating obstacles in the VAT refund process. During the meeting, businessmen also raised the issue of obstacles seen in the VAT refund process.

It has been complained that the Internal Revenue Department has made the document mandatory even when the Nepal Rastra Bank has stopped issuing verification letters, which has caused problems in the cash flow of businesses. To solve this, a suggestion has been submitted to the Finance Minister to implement a system of verification through commercial banks.

In this context, Chairman Vijayananda mentioned that it is necessary to make it simple and digital as the delay in VAT refund weakens investor confidence. In addition, MICHAM Nepal has emphasized the need to adopt a market-friendly system, saying that the proposal to centralize the national payment system into a single entity may negatively affect competition and innovation.

Stating that the division of VAT exemption rights in solar energy projects into two bodies has created delays and confusion, a suggestion has been made to give one-stop authority to the Alternative Energy Promotion Center.

MICHAM Nepal has expressed confidence that US investment in Nepal will increase significantly if clear policy reforms, transparent regulations, and an investment-friendly environment are created.

MICHAM has stated that Finance Minister Khanal has expressed his commitment to seriously study the suggestions presented by MICHAM Nepal and find a solution to the problem in coordination with the relevant bodies.