The Legal Environment of Nepal

The legal systems of Nepal is a mixture of Common Law and the Hindu Legal
concept. The uniqueness is the resulted of many influences, first of all, Nepal was not
colonised by a Western state, and the Hindu legal tradition therefore dominated all
areas of law until the middle of the 20th century. Since the 1950s there has been a
strong influence of Indian common law. It is probably for this reason that comparative
classifications that include Nepal see the legal system as a mixture of common law and
customary of Hindi concept. However, other mixtures mark the Nepali legal tradition.
French law inspired the ruler in the 19th century, and that influence can still be found in
the formal law. In addition, the plurality of Nepalese society made it necessary to
provide space for different customary regimes to coexist with the formal Hindu law.
When it comes to innovations within the legal system, including international law, the
different ingredients interact. The highest court inNepal is its supreme court which have
the power to regulates new law.
Under the most updated Law of Nepal, the Interim Constitution of Nepal (2007),
in aspect of doing business, there are two important Acts that investor should pay
attention in. The first commercial and company related act is Nepal Company Act, 1991,
including the preliminary, definitions, regulations, processes of establishment of
company, legal action and also the penalties. The Nepal Company Act, 1991, serve as
the definitions and a guide to register to do business in the country and also provides
laws and regulations to do so. The second act is the Nepal Industrial Enterprises Act,
1992, whereas, for the overall economic development of the country it is expedient for
industrial enterprises in a captivate manner through the increment in the productivity
the purpose of this act is to make industrial investment more congenial, straightforward
and encouraging, the act give more detailed and specific definitions in legal term of
enterprise and more regulations to control the growing industrialization.

The Economic and Business Environment of Nepal

Nepal is one of the poorest and least developed countries on the planet, with
about as much as one-quarter of its population living below the poverty line. The country
is heavily dependent on remittances, which amount to as much as about 22-25% of the
countrys GDP. While, agriculture is the mainstay of its economy, providing a livelihood
for more than 70% of Nepal population and accounting for a little over one-third of GDP.
he Industrial activity mainly involves the processing of agricultural products, including
pulses, jute, sugarcane, tobacco, grain and deforesting for timber. The country is
located in one of the most extreme location to live in exchange of the extraordinary
surroundings, which why tourism is becoming to be another booming industry in Nepal.
Nepal's economic growth has been adversely affected the uncertainty of political
issues. According to the Asian Development Bank, in 2012-13 GDP grew by 4.6 per
cent, up from 3.8 percent a year earlier with the inflation rate around 8.3 percent.
As the currently political transition effect as an inadequate attention to the economic and
other reforms that could improve the investment climate and stimulate growth.
Infrastructure in Nepal also another main reason behind the slow growth rate, the
additional challenges due to its landlocked geographic location,which leads to persistent
power shortages, underdeveloped transportation infrastructure, civil strife and labor
unrest, and its susceptibility to natural disaster. The lack of political consensus in the
past several years has delayed national budgets and prevented much needed economic
reform. However, Nepalese law is encouraging and favoring foreign investment had
attracted a number of investment into the country last few years, therefore if the political
issues is settling and the business environment is improve, Nepal will able to attract
many foreign investors in the future as the country is abundant of opportunities, labor
and a number of natural resources.