'We Need to Move from one Window to no Window'

Managing Partner at Pioneer Law Associates, Anup Raj Upreti is a commercial law practitioner with more than 18 years of experience advising local and international clients on high value transactions and disputes. His practice spans foreign investment, project finance, private equity, and capital markets and commercial litigation and he is a actively involved in legal and regulatory reform efforts across banking and finance, insolvency, and hydropower sectors. His work focuses on the intersection of law, policy, and business, with additional focus on telecommunications, taxation, energy, and complex project financing, alongside a continuing interest in dispute resolution and governance reform. An LLB graduate of Cardiff Law School, University of Wales, he also holds an LLM in Banking and Financial Laws from Queen Mary University of London.

In this conversation with Mukul Humagain of New Business Age, Upreti discusses what the World Bank’s latest B READY findings suggest about Nepal’s investment climate, why implementation gaps matter more than laws on paper, and what practical reforms could improve investor confidence and day to day business outcomes. Excerpts:

Q. How do you interpret the findings on Nepal shown in the latest B-READY report of the World Bank? Our law looks good on paper, but they are hard to navigate them in practice. Where and why do we need to improve?

A. Broadly, Nepal’s regulatory landscape, especially in commercial law, has many low hanging reforms that could be addressed easily. Yet because those reforms have not been implemented, the overall business environment does not feel as conducive as it could. A visible consequence is that investment that was expected or even committed has not materialized at the pace we anticipated. This also reflects our reform mindset. Regulatory reform is like maintaining a house: if you keep it clean regularly, you do not need sudden action when guests arrive. In Nepal, reforms often happen only when pressure builds. . That reactive approach needs to shift toward continuous maintenance.

On the ground, the law itself is not always the main constraint. In many areas, the legal framework is adequate. The central issue is implementation—how institutions interpret the rules, how agencies apply them, and whether outcomes are predictable. Take IT and service exports, which we frequently cite as a priority sector and a source of foreign currency. In one matter involving export of services from Nepal to a parent company, VAT should have applied at a zero rate. Instead of being resolved within the tax framework, the issue escalated into a criminal treatment and is now sub judice. That kind of approach of applying systems without regard to the spirit of the law creates fear and uncertainty, and it undermines trade and commerce.

Another major factor is corruption, and even more, the perception of corruption. Even where evidence may be difficult to establish, the perceived risk weakens investor confidence. In one IT transaction I handled, an international acquisition excluded the Nepal entity because Nepal was viewed as high-risk due to corruption and compliance exposure. This shows how reputational risk can reduce valuations and block transactions. Finally, implementation remains insufficiently digitized. Where services rely on face-to-face interaction and repeated approvals, processes become slower, less transparent, and more discretionary. If core public services were delivered systematically through digital platforms, transparency and efficiency would improve, and the system would feel more reliable. So, the B-READY findings reflect a practical gap: Nepal’s laws may look acceptable on paper, but weak institutional capacity, inconsistent implementation, corruption-related risk perception, limited digitization, and reactive reform cycles create uncertainty.

Q. In your view, has misuse of discretionary powers also caused many problems?

A. The deeper question is why so much discretionary authority exists in routine business processes in the first place. Discretion may be necessary in narrow areas, but when it becomes common in basic approvals, it creates uncertainty and expands unnecessary gatekeeping. For example, if you want to open an IT company in Nepal, you must apply to the Department of Industry, which technically has the power to refuse registration. If the process were automated and rule-based, it would be difficult to justify denying a legitimate business the right to operate. Automation forces clarity: either an activity is permitted, or it is restricted under transparent criteria. This is why we need to review regulations across business registration and setup and ask fundamental questions: Do we really need this regulation? What problem are we solving? What mischief are we trying to prevent?

Only after identifying the real issue should we decide whether regulation is necessary at all. If it is necessary, we should adopt the approach that achieves policy objectives at the lowest cost to business. In countries like the UK, impact on business is assessed as a standard part of making laws. Nepal does not consistently follow that discipline. As a result, excessive discretion continues to create unpredictability. There is also a human and institutional challenge: reforms require mindset shift, capacity, and accountability, which take time. Political transitions matter too; real improvement will depend on whether the next government treats governance reform as a serious priority.

Q. Another issue flagged by the B READY report is insolvency. Our ranking remains disappointing. What does this low ranking signify?

A. The insolvency ranking may be less relevant in Nepal’s context because the insolvency regime has barely functioned in practice. Although the Insolvency Act was introduced in 2006, the framework has been rarely used, with only a handful of cases, often involving banks, entering formal processes over nearly two decades.

The core intent of insolvency law is to provide a structured exit or a fresh start for distressed businesses. A court-appointed officer is meant to assess whether the company should be reorganized through a settlement plan or liquidated. If reorganized, the entrepreneur can settle certain debts, restructure, and restart under a regulated pathway. But since this mechanism is almost nonexistent in practice, the law has not fulfilled its purpose. That makes the international ranking a poor reflection of the ground reality. A deeper issue is how Nepal treats business failure. In Nepal, once someone fails, they are often treated as permanently failed. Blacklisting is a key example. If an entrepreneur takes a loan and becomes blacklisted, they may be barred from starting another business until the debt is fully repaid. This blocks second chances, discourages risk-taking, and undermines the “fresh start” logic. From an entrepreneurship perspective, this is why we have not been able to implement the Insolvency Law in line with its spirit and objective.

Q. Nepal ranks significantly low in global benchmarking, what message does this send to potential foreign investors and FDI inflows?

A. Investors compare countries. If an investment manager in London is choosing between Nepal, Bangladesh, Sri Lanka, Vietnam, or the Philippines, the first question is: what is Nepal’s advantage? Policymakers must think in competitive terms and must be clearer on what it offers. At the same time, regulatory reform alone is not everything. India also has bureaucracy and delays, yet it attracts investment because it has market size and opportunity. Nepal does not have that scale, so we probably need to put in double the effort. That includes fiscal and non-fiscal incentives, alongside regulatory reform. If we only improve the law on paper while implementation stays inconsistent, the message remains unchanged.

Q. There were reforms in early 2025, and the Rameshore Khanal-led commission report influenced the budget. What impact will these changes have?

A. As a Nepali citizen, I find it exciting that the law now allows IT companies to make outward investments from Nepal. Initially, outward investment was tied to having foreign currency income, but the central bank amended the rule to allow outward investment up to $20,000 even without such income. Historically, Nepal’s challenge was that we could not export Nepali entrepreneurship. Even with strong ideas and products, Nepali citizens and companies were often confined within Nepal’s borders which limited access to global markets.

Allowing outward investment changes that. In IT, we are currently service-oriented, functioning largely as back offices. But product businesses need global access for value creation and fundraising. When entrepreneurs eventually exit, they can capture valuation internationally and potentially generate significant wealth, including dividend and return flows back to Nepal. I also see practical improvements in project financing. Previously, providing immovable property as security to foreign lenders required cabinet approval. Removing that requirement reduces a major hurdle that affected bankability and transaction timelines. These reforms may not immediately appear in rankings, but over time they can materially improve the ecosystem.

Q. Should Nepal freely allow outward FDI beyond conditional frameworks?

A. The next step is to identify which sectors can be opened strategically, as we did with IT. Consider Goldstar Shoes. India is a massive market, and allowing a Nepali manufacturer to establish a plant there could unlock local financing, subsidies, and a competitive cost structure. If costs are structurally lower abroad, manufacturing only in Nepal and exporting may eventually become uncompetitive. Policymakers should evaluate which sectors are capable and what national gains would follow, such as market access, dividend income, scale, and stronger global positioning of Nepali firms. Concerns about foreign currency outflow are valid, but reserves are currently strong, which may allow careful experimentation.

A cautious approach is sectoral caps. The government could allow outward investment up to a defined amount in specific sectors over a set period, with approvals and clear criteria. That balances policy caution with entrepreneurial opportunity. So, yes, Nepal should move toward freer outward FDI, but in a calibrated way; sector by sector, with caps and clear rules, so we expand opportunity without compromising macro stability.

Q. The central bank relaxed repatriation rules. To what extent does repatriation remain a hurdle?

A. The shift toward automation in repatriation is welcome. It saves time, reduces uncertainty, and sends a positive message about Nepal’s regime. Investors are noticing improvements. We used to talk about two to four months for setup; now, registration and setup can often happen in around 15 days. That is progress. But there is still room for improvement. Dividend repatriation still requires approval from the Department of Industry. What is the practical difference here between a Nepali and a foreign investor? A Nepali investor receives dividends after withholding tax is paid and a corporate resolution is passed. Is it necessary for the department to apply such intense scrutiny for foreign investors? Because the process is largely predefined, dividend repatriation, particularly for listed companies, could also be moved to an automated system. While the central bank has done its part from the foreign investor perspective, it is now necessary for the Ministry of Industry to do the same.

Q. What is the current perception of Nepal as an investment destination? Has it changed?

A. I would categorize investor perception into three segments. First, the power sector. Nepal has resources, and investors come because the opportunity is location-specific. Hydropower investment continues, even with local constraints. Second, established regional investors like Unilever or Dabur, who benefit from geographic proximity and strategic positioning. For them, Nepal remains important, even if operations are not always easy.

Third, globally mobile investors, especially in IT and certain services, who can choose many destinations. Nepal still struggles to attract these investors, because they compare Nepal with alternatives and often conclude that other jurisdictions offer better predictability and ecosystem advantages. There is no perceived necessity to come to Nepal. In many cases, large IT operations in Nepal exist because of personal relationships or sentiment, not because Nepal is structurally the most competitive option. That is not sustainable. We need to become a jurisdiction that attracts investment based on merit, competitiveness, and predictable administration. So, while there are improvements in specific processes, overall perception among globally mobile investors remains cautious.

Q. Is the One Stop Service Centre a myth or reality? Does it help in practice?

A. I increasingly think Nepal should move from one window to no window. Many “windows” exist because approvals are fragmented and often unnecessary. Instead of building a coordination mechanism around complexity, we should remove complexity at the source. For routine matters, the government does not need repeated sign-offs. Processes should be rule-based, automated, and time-bound. That is the no-window approach. That said, for large projects managed by OIBN, coordination is still important. If multiple agencies truly coordinate through OIBN, investor experience should improve. Today, even through OIBN, investors often run across ministries, which defeats the purpose.

A truly effective system would mean: once an investor applies through OIBN, they should not have to visit other agencies; OIBN should deliver outcomes and call the investor when everything is ready. So yes, the One Stop Service Centre can help if it actually eliminates duplication but the bigger goal should be fewer approvals and more automation, so the system becomes genuinely conducive in practice.

Q. Why do OIBN projects still face hurdles despite high-level decision-making?

A. The original vision for OIBN was high-level facilitation for major projects. It was modeled on the idea that leadership provides assurance and rapid resolution of obstacles. To an outsider, a body chaired by the prime minister looks like it should be fast and decisive. It is certainly high-powered. But it becomes confusing when a project approved at that level still requires separate approvals afterward, including at the central bank. That creates a credibility gap and frustrates investors.

This is why a functional one-window system matters. Investors ask: “If this is approved at the highest level, why is there still another round of hurdles?” Unless approvals are aligned and duplication is removed, the high-level structure does not translate into real facilitation. So, the difference is not only about who chairs the meeting, it is about whether the system is integrated. That is the real answer to your question.

Q. If Nepal hosts another investment summit, which laws truly need to change?

A. I do not believe that simply holding an investment summit will automatically bring in investors. In my view, they are promotional, useful for engagement and visibility but they should not be framed as a guaranteed route to immediate inflows. Instead of checking off a list of laws, we need to look at reforms from a sector perspective. In energy sector, for example, we must look at bankability through the eyes of commercial lenders, default risks, guarantees by government, termination payments for the protection of foreign lenders if a project fails, and the role of the regulator (ERC). We should apply the same sector logic in infrastructure and manufacturing. In infrastructure, what are the specific problems in PPP models for toll roads? In manufacturing, what hurdles prevent growth? These issues need to be addressed.

That said, foundational laws need urgent attention. The Company Act is the primary vehicle for any investor and has not been substantially reviewed since 2006. It is outdated and should be updated for modern commercial realities. The Industrial Enterprise Act, in my view, should be repealed. Its philosophy is dated, and it creates an unnecessary layer of bureaucracy. Incentives can be handled through tax law, and registration is covered under the Company Act. Using the Cotiviti case as an example, the Revenue Leakage (Investigation and Control) Act needs serious reform. Legitimate business activity should not face disproportionate criminal exposure; genuine smuggling and evasion can be addressed under customs and criminal laws.

Q. How can Nepal position itself effectively, given political turbulence and our location between two giants?

A. Let me share a thought from an imaginary world. If the relationship between India and China improved, we could harness investment from China to tap our energy potential and export power directly to India. That depends on ties between those two nations, but it highlights our positioning between the world’s second and third largest economies. The energy sector is a prime example. We have the resources, we need the funding, and there is a major revenue opportunity.

We should also explore new sectors objectively. Take crypto mining. Our regime treats it as inherently illegal, yet it is energy-intensive and Nepal has energy potential. The question should be: can we design a regulated framework, as we did with casinos, to capture economic opportunity while managing policy risk? We need to look at these opportunities objectively. In general, I feel policymakers often lack confidence. Even when presented with new ideas, there is fear of repercussions, such as being investigated by the CIAA. That fear can stifle the innovative thinking needed to position Nepal for the future.

Q. Is the government afraid of deregulation? The Fast Track is an example of how private-sector involvement failed to materialize. Is the state unclear on what to regulate vs deregulate?

A. The Fast Track project is a perfect case study because it captures many of the problems Nepal faces. First, there was a procedural failure. The project went through bidding, a successful bidder was selected, and a letter of intent was issued. Only the contract signing remained. Then a new government stepped in and refused to sign. That sent a damaging message globally. It suggested that even if you follow procurement rules, the state can reverse course at the last moment. Second, there was nationalist sentiment that we should build it ourselves using our own investment and expertise. We have seen the result: the cost increased sharply, and timeline stretched significantly. In hindsight, it was the wrong decision. It showed the public sector was not equipped to handle such complex implementation.

Third, the biggest sticking point was revenue assurance or minimum revenue guarantee. The public outcry was, “The government will pay them if they lose money.” But revenue assurance is a standard in international toll road projects. In a country like ours, reliable traffic data is lacking. You see people manually recording vehicles at the Thankot check post, but where does that data go? Who analyzes it? Nobody knows. In a high-risk country with low data transparency, government guarantees are often necessary for large scale private investment.

Fourth, the specter of corruption hangs over everything. One government accuses the previous on, the next one does the same and the project gets cancelled. Cases go to court, and even judges, influenced by the public narrative, may assume wrongdoing. That climate destroys confidence for both contractors and policymakers. The real problem is a lack of planning and policy trust. We need a transparent, uniform policy where a policymaker can say, “I gave this guarantee because the law and the data required it.” Instead, we jump into bidding without the groundwork and that is why we keep ending up in situations like this.

Q. As business models grow more complex, is Nepal prepared on the supply side—lawyers, bankers, CAs—to handle it?

A. Let’s look at the service sector- CAs, lawyers, and bankers. For professionals to grow, real transactions must come to the table. That is how experience is built. I started my career in 2002, and by 2026 the complexity of transactions has evolved significantly. I have learned mainly through the range of deals I have handled over this period. For example, I was involved in both the acquisition and sale of Ncell by TeliaSonera. Because it involved a multinational corporation, I had the opportunity to work alongside top-tier international law firms. Through that process, I learned how global documentation is structured and how international negotiations are conducted. That is how professional skills develop.

In our service sector, it is not that we lack talent or that Nepal’s development is limited by a shortage of professionals. We have capable people, and our capacity is improving. If niche expertise is not available locally, it can be brought in from abroad.

What we really need are more complex, high-value projects. When large-scale deals happen in Nepal, professionals gain the platform to learn and reach global standards. So I do not see professional talent as the main bottleneck. We need more opportunities to work on sophisticated projects and sharpen our expertise.

This interview was originally published in the February 2026 issue of New Business Age magazine.