Nepal Market Entry

Nepal Market Entry

Subchapters:

  • Market entry
  • Forms and conditions of operation on the market
  • Marketing and Communications
  • Issues of intellectual property protection
  • Public procurement market
  • Payment terms, payment ethics and resolution of commercial disputes
  • Visas, fees, specific conditions of travel to the territory
  • Employment of citizens from the Czech Republic
  • Fairs and events

Market entry

Distribution and sales channels, use of local representatives, other factors affecting sales

Geographical location, agricultural orientation of the economy, and geological and climatic conditions fundamentally affect Nepal’s economy and market. Nepal is crossed by practically only one highway (Tribhuvan Highway) suitable for transporting goods (however, the road may be closed during local riots or strikes). For sea transport, the only suitable option is to transport goods from Calcutta, India, now new routes are opening through Bangladesh. Air transport of goods to Kathmandu airport is also possible. Check smber for agriculture and fishing facts of Nepal.

The very limited financial possibilities of Nepalese importers are also a problem. The lack of financial resources is partially covered by foreign sources that are directed to the field of infrastructure – energy, road construction, etc. If Czech companies want to enter the Nepalese market, careful preparation of tender activities within international consortia (for international projects) and a financing offer (here appropriate investment insurance must also be considered).

The basis for business relations in Nepal is, among other things, to obtain and maintain business ties with leading representatives of the state and business spheres. In order to establish yourself in the Nepali market, you always need a capable local representative who knows the conditions there and who himself has sufficient trust of the business clientele, which is relatively small and closely connected with each other. Local sales representatives usually charge a commission of 5-15% of the price of the goods for their services. Sales representatives are suitable for trade in machinery, high-tech or in obtaining government contracts and international tenders. Furthermore, it is possible to conclude an agreement with an exclusive distributor who, for a commission, will provide not only services related to the actual sale of goods, but also marketing and promotion. These distributors usually work with a commission of around 15 to 30% of the contract price.

In terms of business activities, the main point of contact is the Ministry of Industry, Trade and Supply, which usually represents Nepal in the implementation of foreign aid for individual sectors of the Nepalese economy. Nepalese businessmen associate themselves in the Nepal Chamber of Commerce (NCC) or the Confederation of Nepali Industry (CNI).

Import conditions and documents, customs system, export control, domestic market protection

Nepal is heavily dependent on the import of mainly engineering and consumer goods, as well as oil intended for energy production. Import tariffs were already low at the time of Nepal’s accession to the WTO, so the tariff limits given to Nepal by the WTO are higher than the current tariffs.

Under the free trade agreement, products made in Nepal can be exported to the neighboring Indian market. The current Nepalese government is trying to support these activities, and after overcoming the initial problems arising from the nature of the territory, interesting results can be achieved.

The amount of the import duty is 17.7% on average. The VAT is 13% and there is also a 5% special tax and a 1.5% local tax on goods imported into Nepal. An overview of customs tariffs and taxes in Nepal can be found on the website of the customs department: http://www.customs.gov.np/en

The ban on import into Nepal applies to the following goods:

  1. Products harmful to health: narcotics, alcoholic beverages with more than 60 percent alcohol content.
  2. Arms and military equipment (except when granted a government import license).
  3. Equipment for telecommunications (wireless walkie-talkies and similar audio communication devices) – does not apply to the import of these goods with an import license granted by the government.
  4. Precious metals and jewelry except as permitted by the government.
  5. Beef and beef products.

The conditions for importing goods are quite liberal, for some types of goods an import license must be issued. Protection of the domestic market also corresponds to this regime.

Forms and conditions of operation on the market

Geographical location, agricultural orientation of the economy, and geological and climatic conditions fundamentally affect Nepal’s economy and market. Nepal is crossed by practically only one highway (Tribhuvan Highway) suitable for transporting goods (however, the road may be closed during local riots or strikes). For sea transport, the only suitable option is to transport goods from Calcutta, India, now new routes are opening through Bangladesh. Air transport of goods to Kathmandu airport is also possible. The very limited financial possibilities of Nepalese importers are also a problem. The lack of financial resources is partially covered by foreign resources that go into the field of infrastructure – energy, road construction, etc. If Czech companies want to enter the Nepalese market,

The basis for business relations in Nepal is, among other things, to obtain and maintain business ties with leading representatives of the state and business spheres. In order to establish yourself in the Nepali market, you always need a capable local representative who knows the conditions there and who himself has sufficient trust of the business clientele, which is relatively small and closely connected with each other. Furthermore, it is possible to conclude an agreement with an exclusive distributor who, for a commission, will provide not only services related to the actual sale of goods, but also marketing and promotion. In terms of business activities, the main point of contact is the Ministry of Industry, Trade and Supply, which usually represents Nepal in the implementation of foreign aid for individual sectors of the Nepalese economy. Nepalese businessmen associate themselves in the Nepal Chamber of Commerce (NCC) or the Confederation of Nepali Industry (CNI).

Marketing and communication

In terms of media, there are a number of satellite and private stations in Nepal (Kantipur Television, Image Channel, Channel Nepal, Avenues TV, Nepal 1 Television, Sagarmatha Television) and two public television stations (NTV 2 Metro) where advertising can be placed. A powerful marketing tool is the Internet, which is used by local merchants in particular for promotion. Furthermore, it is possible to advertise in print media and radio, which reach a larger part of the Nepali population than television, which targets the middle and upper classes.

Issues of intellectual property protection

The issue of intellectual property protection belongs to the portfolio of the Ministry of Trade, Industry and Supply. Nepal became a member of the WTO in 2004 and is obliged to bring its laws that address this issue into line with the laws of developed countries. The basic law is The Nepalese Patents, Designs and Trademark Act of 1965. In the field of copyright, the Copyright Act of 2002 is valid, which in some parts is in accordance with the requirements of the TRIPS Agreement, but is only the beginning of the path to full compatibility of the Act on copyright with TRIPS requirements. A new Industrial Property Protection Act is also being prepared. The Department of Industries is legally responsible for the protection of industrial property, with which patents, brands and designs must be registered.

Nepal is, among other things, a member of the World Intellectual Property Organization (WIPO). More information on intellectual property protection in Nepal can be obtained from the website of the Ministry of Trade, Industry and Supply: www.moi.gov.np/

Public procurement market

Information on newly announced public contracts can be obtained on the following websites:

http://www.tendersinfo.com/global-nepal-tenders.php

http://www.globaltenders.com/government-tenders-nepal.php

http://www.tenderdetail.com/nepal-tenders/1?ci=153

http://www.tendertiger.co.in/quicksearch.aspx?st=qs&SerCat=10&SerText=Nepal&tt=&si=&ct=1

Payment terms, payment ethics and resolution of commercial disputes

With the onset of political stabilization, the legal environment for business and investment has been gradually improving since 2018. However, property protection is not sufficiently legally ensured. The judicial system is not efficient, corruption and the application of political pressure are frequent, especially in lower instances. Foreign investors are increasingly wary of investing due to rampant corruption in the government system, lack of adequate laws and policies, overburdened bureaucracy, and uncertainty over the repatriation of profits.

The lack of clear government provisions on the feasibility of financing is a major obstacle in the implementation of large foreign investments in the country. There are no clear provisions on the financial or technical contribution of the government in large projects, which is crucial for foreign investors. In 2019, the Foreign Investment and Technology Transfer Act was submitted to parliament. Every sector of the economy, according to the Prime Minister’s assurances, has made a commitment to eliminate cartel agreements and ensure free and fair economic competition.

Before closing a deal, Czech companies should check the registration and creditworthiness of their Nepali business partners. Information can be obtained from the following contacts: Nepal Chamber of Commerce (mail: [email protected]). The Federation of Nepalese Chambers of Commerce and Industry (mail: [email protected]).

Visas, fees, specific conditions for traveling to the territory

Visas, customs regulations:

Nepal is open to foreigners and has already resumed granting visas on arrival to all travelers, both vaccinated and unvaccinated.

Nepal does not have an embassy in the Czech Republic. In consular matters, Czech citizens turn to the Embassy of Nepal in Berlin, under whose consular jurisdiction the Czech Republic falls.

Embassy of the Federal Democratic Republic of Nepal in Berlin

Address: Guerickestrasse 27 (2nd floor), 10587 Berlin – Charlottenburg

Phone: 004930-3435 9920, 3435 9921, 3435 9922 Fax: 004930-3435 9906

Email: [email protected], [email protected]

Website: https://de.nepalembassy.gov.np/

The transport of precious metals to Nepal is regulated. Foreigners are allowed to wear gold ornaments up to 50 grams and silver ornaments up to 100 grams. Undeclared gold or silver is subject to confiscation, a fine corresponding to the value of the goods, and imprisonment depending on the value of the goods.

It is illegal to trade in wild animals or kill them. Nepal is a signatory to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), which prohibits trade in wildlife and animal products without a permit.

Penalties for drug-related offenses are severe. Even possession of a small amount of marijuana can result in a prison sentence of over 5 years.

Vaccination:

Vaccination to Nepal is recommended against jaundice type A and B and against typhoid, tetanus and polio, and for longer stays against Japanese encephalitis and meningococcal meningitis. In the southern parts of Nepal, there is also a risk of malaria. Traveller’s diarrhea is quite common among travelers. Depending on the area visited and the time of year, antimalarials can also be considered. The choice of vaccination should be consulted with an expert in travel medicine at regional hygiene stations or vaccination centers.

Climate:

Classic monsoon weather prevails in Nepal. The rainy season is from June to September, the best months for trekking are April and May in spring, late September, October and early November in autumn. This way you can avoid rain and humidity in summer and snow and frost in winter. Most accommodation facilities have no heating or air conditioning, summer is the rainy season. In the conditions of climate change, it is necessary to be informed about the current development of the tribute. The south of Nepal is warmer with subtropical weather, as you go north the altitude increases and with it the climate changes to mountain to alpine with all the usual features. Please note that especially during the winter months, the Kathmandu Valley with the capital is one of the most polluted areas in the world in terms of air quality.

Safety and security recommendations:

Nepal is a relatively safe country. Nevertheless, economic crime against foreigners cannot be ruled out, such as petty theft of valuables, cash, cameras and personal luggage, as well as theft of travel documents. Be careful in the evening and at night. Appropriate clothing is always recommended for women. If you are going to the mountains, remember that high altitude hiking in Nepal is risky. Climbers die every year. Never hike alone. Use a renovated agency to organize the tour, stick to the established routes and follow local regulations. In terms of wider terrorist and extremist acts linked to international terrorism, Nepal has remained a relatively safe country. Political violence in Nepal occurs on a small scale and includes attacks on infrastructure,

Sales time:

Stores are usually open from 9:00 a.m. to 9:00 p.m.

Working hours:

The main non-working day is Saturday, while Sunday is a regular working day. Working hours in state offices are from 10:00 a.m. to 5:00 p.m., on Fridays until 3:00 p.m.

Public transport and movement within the country:

Mainly bus transport and domestic air transport operate in the country. However, buses are often overcrowded and, even in view of the poor condition of the roads, very often have tragic traffic accidents with fatal consequences. We recommend citizens of the Czech Republic to avoid this type of transport. A better option is to rent a personal vehicle, especially for shorter distances. There are air links between Kathmandu, Pokhara and several other cities with risks in case of bad weather flights. Before starting your journey, always inform yourself about the current development of the weather over the area to which you are heading. Nepal has long been criticized by the EU for insufficient measures regarding air traffic safety, and Nepalese air carriers have been banned from flying to EU countries for several years.

In Nepal, there is a whole range of accommodation facilities, the prices of which vary from 10 USD to several tens or hundreds of USD per night. An ISIC card can be very useful in Nepal, especially for cheaper accommodation.

Insurance and health care:

In the capital, you can find health care at a passable level, although the hygiene standards of medical facilities are significantly lower compared to European practices. The situation is much worse in rural and especially mountainous areas. In general, it can be said that only people in good health and with appropriate vaccinations should travel to Nepal, similar to other countries in South Asia. It is advisable to take with you a sufficient supply of used medicines, several sterile bandages, syringes and needles, as these are not always available. Foreign visitors have to pay for their health care, often in cash, and you need to have a sufficient financial reserve. In order to obtain a visa, it is necessary to have travel insurance covering the costs of emergency search and rescue and treatment during your stay in Nepal.

Employment of citizens from the Czech Republic

Conditions for employment of citizens from the Czech Republic:

Employment permits for foreign nationals for all positions are issued by the Department of Immigration ( http://www.nepalimmigration.gov.np/ ). Due to Nepal’s current labor law, the employment of foreigners is restricted. This restriction results from high unemployment in Nepal and the difficulty of finding work for Nepalis themselves. Every applicant for a job must therefore prove that a citizen of Nepal is not interested in the required job or is unable to perform it, which in practice turns out to be very difficult.

Conditions for the use of local health care by Czech and EU citizens:

The Czech Republic does not have any bilateral agreement with Nepal on mutual provision of health services. Therefore, it is necessary to have enough cash and have travel insurance to cover the costs of emergency search and rescue and treatment during your stay in Nepal.

Fairs and events

Important events in 2021 can be found here:

https://10times.com/nepal/tradeshows

https://10times.com/nepal/conferences

Nepal Market Entry