October 26: Doing business in Nepal has become difficult, according to a new World Bank report. Nepal has slide 8 spots to 107 from last year's 99 in the World Bank's Doing Business 2017 report.  The report cites decline in Nepal’s business regulatory environment and data revisions as the main reasons behind the drop.  However, Nepal ranks second highest in South Asia after Bhutan (73) and Sri Lanka (110).

According to the bank, using a comparable methodology, Nepal’s score went down from 59.36 of last year to 58.88 in the latest edition of the report,on the distance to frontier metric. "This indicates a widening gap between Nepal’s regulatory environment and global best practices," states the report. More specifically, the Doing Business report finds Nepal made dealing with construction permits more difficult by increasing the cost of obtaining a building permit in 2015/16. "However, on the positive side, Nepal also made exporting and importing easier by implementing ASYCUDA World, an electronic data interchange system," mentions the bank.

As per the report, Nepal has recently made progress in institutional reforms on several fronts that will take some time to be reflected in international rankings, including the Doing Business report. 

“For example, the government has commissioned a Cloud Infrastructure, introduced Public Key Infrastructure for Digital Signature and is close to launching an online registration and approval system for Foreign Direct Investment,” said Takuya Kamata, the World Bank’s Country Manager for Nepal.  “Wider public uptake of these systems can help ensure that these positive developments are captured in future rankings,” he said. 

"Nepal’s drop in ranking was partially offset by changes in methodology. For the first time, the report includes a gender dimension in three sets of indicators: Starting a Business, Registering Property and Enforcing Contracts.  The Paying Taxes indicator set has been expanded to cover post-filing processes, such as tax audits and VAT refund," reads a statement by The World Bank.