Nepal's New Casino Policies May Affect the Future Foreign Investments

The Nepal government has proposed a new framework for Foreign Direct Investment (FDI) in the casino sector.  Under the new bill, foreign investors will be allowed to hold up to 49 percent of equity in joint ventures, the remainder reserved for domestic partners.

This stands in contrast to the current regulation, which allows foreign investors to own up to 90 percent of the casino business. This new regulatory framework has caused tension in the country, speculating a cut in foreign investors.

The new bill also doesn’t have any clarifying clause that highlights the casino's operating distance. The new law allows casinos and electronic gaming houses to operate within three kilometers of Nepal’s international borders. The previous rule mandated a minimum distance of five kilometers from the border, but due to the involvement of old period clauses under this new law, has created a rift for frustration among hotel owners.

President of Siddhartha Hotel Association and Owner of Nansc Hotel in Bhairahawa, Chandra Prakash Shrestha stated, “The gaming industry is a major taxpayer and it should not be saddled with arbitrary location-based areas were developed to cater to Indian and Bangladeshi tourists and there should not be restrictions in doing so.”

The progress under the new bill will be closely monitored by stakeholders in Nepal's casino industry. Therefore, the new framework will be affecting Nepal's foreign direct investment sector at large.