Sunday, October 16, 2011

Nepal's Visa Debacle- Making Sure Nepal Keeps Out Investment & Talent

The last six months have been a roller coaster dominated by one exceptionally difficult goal, to get a business visa in Nepal. This post might be especially relevant since there have been calls to make the year 2012, foreign investment year...which just like Nepal tourism year would consist of them declaring it so and then doing just about nothing else to achieve any kind of relevant goals. In a sensible world one might think that a self styled impoverished country that sends large numbers of its working age men overseas to do very difficult labor in places like the gulf states or South East Asia would welcome with open arms injections of foreign capital and business, or talented young professionals that are looking to do meaningful work in the country- but this assumption would be incorrect. Unlike countries like Cambodia, with arguably much better living conditions, where business visas for foreigners are so say to get that you can apply for them through travel agents, Nepal has created a nightmare procedure that would test the patience of a saint, costs tremendous amounts of money in legal fees and quite a bit in government fees as well, and basically says to the person trying to create something posative in the country "Not Welcome".

Something that I'll need to address before I go any further is that yes it is hard for people from Nepal to get a visa to live in the US, not that this has any real bearing on the issue aside from some people suggesting that tit-for-tat is fair and good policy. Comparing immigration visas into the US and Nepal is comparing two very different things. For starters, the US has a very robust social safety net along with a plethora of "free" government services, from free schooling to de facto free emergency rooms. Any additional warm body in the US has a potential cost liability of hundreds of thousands of dollars that can strain municipal budgets and add to already balooning federal deficits. Nepal has nothing of the sort, and no foreigner here is living off the dole of the Nepal government and its tax base. Then there is a question of scale as well, while plenty of people are trying to get into the US and some might argue that those numbers have to be controlled in order to prevent a deluge of people from entering the country, there is no such tidal wave of foreigners at the gates of Nepal demanding entry. We are a small trickle at best. Let me go on record as saying I think much of US visa policy takes too long, is too complex, and if I could wave a wand I'd rather be the America that lives by the "Give me your tired, your poor, your huddled masses yearning to breathe free", but the current welfare state being what it is, it's not feasible at the moment. I'd also like to note that Nepal has the right to make whatever policy it wants, my point is not that they don't have the right to make the system as absurd as it is, just that it's bad policy. So with this aside out of the way, I'll continue.

Getting a tourist visa in Nepal is a rather painless procedure. Sure it's more difficult than most of the planet where you just show up someone stamps your passport and you're on your way, but aside from the rather steep fees, needless paperwork and required photos it's just a formality that makes lines long at the airport. Tourist visas are good for up to five months in any one calender year, and after that your options just about disappear. On paper there are plenty of options; work visas, residency, student and business. The reality however is that because of the draconian requirements work visas are not given out to almost anyone even those connected to well funded INGOs, and residency visas are also rarer than sightings of the snow leopard (or maybe the yeti).  The easiest by far is the student visa, but even this requires thousands of dollars in Nepali bank accounts, classes that cost upwards of $500 a semester, and visits to a plethora of different campus buildings and government offices to put together a small sea of paperwork. There is next to no help in navigating this process and like anything in Nepal it requires lots of red tape, patience and there are usually bribes asked for along the way. Despite these difficulties, the result has been that because this is one of the few options available, this is what many expats operate under for a visa while staying in Nepal.

Recently there have been some stirrings in papers and such that there are to many foreigners in the country that are not under the correct visa, followed by suggestions that the government should crack down on this (as if this is the most pressing concern here). Of course there was no mention of the fact that it was the absurd policies and impossible standards that are implemented and thus the lack of availability to access of the proper types of visas that lead to this problem in the first place. It's not that people working for organizations or companies in Nepal don't have work visas because they aren't doing legitimate work or are unwilling to try and get the correct visas, it's that the government makes it literally impossible to get such visas.

The visa that I have just received and have worked on for the last six months was a business visa, which has quite a few high hurdles within it as well. To start it requires a whopping $20,000 of committed foreign capital to be put toward investment. This isn't chump change to most people, even in the first world. More absurdly it's far more than what would be required to start some tech based industries which could possibly do rather well here. This requirement is asking for people to bring an awful lot of money into a non convertible currency, , a gamble that is off putting to a large number of otherwise would be entrepreneurs. Aside from cash it requires stupendous amounts of paperwork, over 200 signatures from each investing member (6 in my case), literally dozens of passport sized photos, a dozen thumb prints, and many trips to government offices spread out over the time it takes to apply. If I never go to the department of industry again I'll die happy. The path is also very hard to understand or navigate, and even with a lawyer (who also charges copious amounts of money), the process seemed confusing at best most of the time, and often just downright absurd and frustrating. The near constant need to sign something or potentially visit some bureaucrat in an office somewhere means that if you want things done in a "timely" manner you need to keep your schedule flexible and close to Kathmandu. The complete lack of use of modern technology via electronic signatures, e-mail for communication (and a record of it), and the use of archaic paper filing, rubber stamps, and other nonsense compounds the problem further. I won't even get into the fact that government offices open around 10 AM and are closed by 3PM, meaning any work has to be started before 2PM. I also won't dwell on the absurd naming rules that held up my visa for at least two weeks (apparently it was very odd that we wanted to be a restaurant AND a bar, or that when Harilo was registered it wanted to be and ended up as Harilo Dot Com.

The question has to be asked who are these regulations protecting and helping? It sure as hell isn't Nepal. During my stay here I've seen a number (ass in maybe half a dozen) people with excellent credentials from some of the best schools in the world essentially pushed out of the country, despite having been willing to at least make this at least a short term home.I find it curious that a part of the world that constantly complains about brain drain would have policies that chase off people with degrees from places like Oxford, MIT, and Yale. Some might claim that it is protecting Nepali workers so they don't have to compete with foreign competition, but this is a bit far fetched, as few foreigners are going to work for a Nepali wage, and more often than not the foreigner has a skill set or connections that are not otherwise available. More importantly having bright talented people either working for firms here or creating businesses could only help train and bring new skill sets to the Nepali workers and co-workers that would be working alongside their foreign counterparts.

As I mentioned Nepal planning for the year of foreign investment 2012, it also brings up some of the absurd ideas that the current bureaucracy has about what foreign investment should be. It has been made clear that what they really want are very large investors seeking to do huge projects like hydro-power dams. Nepal seems to want to set the terms and demand who it wants as investors and then wonders why no one shows up to bid. The basic concept that people would be more willing to commit to large projects if they could see that a safe and welcoming environment had already been established and tested for smaller investment seems to have eluded them. Establishing that it's safe to commit large quantities of resources to a country is made much easier by showing that there is a respect for property rights (i.e. companies are getting seized and nationalized), labor laws aren't choking smaller industries and local work forces are showing some margin of efficiency, and capital once earned could freely flow between Nepal and the home base of the company. Currently these are all areas that scare away investors from Nepal, and by creating a more open and welcoming environment for smaller foreign investors and entrepreneurs Nepal could create a perception of a safe and profitable place for larger investors to bring their projects. You don't attract the big fish without bringing in the little ones first.

All in all the current system, aside for being a nightmare to navigate for the person trying to get the visa, is no good for Nepal's future. It's not that Nepal needs foreigners to move its country forward, but turning away talented dynamic people that for whatever reason do want to spend time here isn't helping to propel it forward any faster. Currently the only people who benefit from the system are those who can ask for bribes along the many steps in the process and the lawyers who get paid to navigate this quagmire of paperwork and red tape. If Nepal is serious about harnessing any potential to bring it on par with the two emerging powers that border it and create jobs and industry so that it's sons and daughters aren't forced to work in far off lands, they might start by opening the door to foreigners who do want to help make Nepal the country that it has the potential to be.


  1. I compltelty agree I was looking into moving to Nepal and it seems impossible to move without having to pour a hundred thousand dollars at once into the economy or bribing someone from within. I don't understand how it works at all. I understand that Nepal is a third world country but so is Honduras and Indonesia and the government is at least willing to work with you and cut a few breaks. I still plan on moving there but it won't be for about 5 years now that I have a firm grasp on the concept of 'investment' in Nepal.

    1. We are looking to go and not sure about the "investment" part and what is meant by that. Any help is appreciated.

  2. I'm planning on giving it a go (still) but don't be surprised if I don't! Honestly, they really don't think too far ahead do they. Shame as it is only the poor Nepali in the street who suffers - and the guest workers who come home in a pine box. At least we offer some sort of opportunity given half a chance.

  3. @Jamie. The investment part is your injection of foreign capital that is used to purchase your share of a private company in Nepal. I invested money in my restaurant which met the minimum guideline at the time. Please be aware that the government here has decided that even more investment is needed now in order to get a visa and minimum foreign investment is now 50K US$, and the word I'm hearing is that it will soon be raised to 100K US$, which is essentially just a way of saying we don't want foreign investors in my opinion. Of course plenty of people will continue to get visas through illegal means, but legal options are dwindling.


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