KATHMANDU, Sept 12: Japanese investors have asked Nepal to sign a Treaty on Avoidance of Double Taxation with their government and promote business environment if it is to receive substantial investment from the largest economy of Asia.
Though Nepal receives a substantial volume of assistance from Japan, it has largely lagged behind in luring Japanese investors. There are just about 43 Japanese joint venture industries with investment of about US$13 million in Nepal.
Investors in Tokyo and the industrial hub of Osaka have made it clear that they will not invest in Nepal unless they are assured that there won´t be double taxation on repatriated income and dividend.
They also sought the government´s categorical commitment to curb strikes, stated Kush Kumar Joshi, president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI), who led a business delegation to Japan last week.
During interactions, Japanese investors also expressed concerns over deteriorating business climate and situation of work culture in Nepal. They also suggested the Nepali private sector to approach them with concrete business proposals to lure their investments.
Despite harsh statements, some of the Japanese investors have shown interest to set up motor parts industry, river osmosis plants and to invest in tourism sector, said Pradeep Jung Pandey of FNCCI.
Moreover, FNCCI has announced that it, in association with 171 manpower agencies, could send some 500 industrial workers for on-the-job training to Japan within a year under Japan International Trading Cooperation Organization´s (JITCO) scheme.
“The six Nepalis who have already gone to Japan under the scheme have impressed the employers. We have received assurance from JITCO that more trainees will be demanded,” said Joshi, who interacted with ministry level officials of JITCO.
FNCCI officials informed the press that Japan is seeking more Nepali trainees in sectors like agriculture, food processing, manufacturing, textile, machineries and furniture production. For the selected trainees, the employers bear the cost of travel and living expenses. They are also paid about Rs 45,000 a month.
Entrepreneurs here tag the scheme as an opportunity for Nepali industrial workers to sharpen their skills, get acquainted with latest technology and also earn money. “The greatest asset of this training is technology transfer and work culture. If Nepali trainees really did well, they will also catalyze entry of large scale Japanese investment into the country,” said Pandey.
To inform Nepal government and private sector more about JITCO program, a team of the organization is visiting Nepal in a couple of months. “We will host a wide-scale seminar related to it within this year,” said Joshi.
Apart from developing workers´ skills, Japan has also expressed commitment to organize 15-day management training for young businessmen of small and medium enterprises. It has asked FNCCI to send a list of 30 young entrepreneurs for the training.
Likewise, Japan External Trade Organization and Japan International Cooperation Agency (JICA) have committed to support Nepal to implement ´one village, one-product´ concept.
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