Print Edition - 2019-03-16 | News
Foreign investment to be allowed in education consultancies
- House passes a bill that allows foreign investors to hold 51 percent shares in ventures
Mar 16, 2019-
Despite lobby from the umbrella bodies of education consultancies, a parliamentary committee on Friday endorsed a bill to amend the Foreign Investment and Technology Transfer Act, allowing foreign investment in the education consultancy service.The sharply divided Industry, Commerce, Labour and Consumer Rights Committee of the House of Representatives passed the bill, allowing a provision in which a foreign investor can hold 51 percent shares while the 49 percent remains with the Nepali partner. The umbrella bodies of the consultancies, in their attempt to maintain their monopoly, had been lobbying hard to stop foreign investment in the sector. Many lawmakers both from the ruling and opposition parties had tried unsuccessfully to revise the bill in line with their demand.
Lawmakers from the ruling Nepal Communist Party (NCP) were divided on the issue. The party’s lawmaker Som Prasad Pandey had called for not allowing foreigners to invest in the sector. However, LP Sanwa, from the same party stood against it. Pandey had registered an amendment seeking permission only for Nepali investors.
Originally, the bill prohibited establishment of education consultancies with investment lesser than the amount prescribed by the government. This means foreigners were allowed to establish consultancies with full ownership if they invested more than $50,000. However, following the dispute among lawmakers, foreign investment was allowed with 51 percent share.
“Treading the middle path, we settled the dispute provisioning 49 percent [investment] by Nepali and 51 by foreign [partners],” Nepali Congress lawmaker Pramod Yadav told the Post. “Entry of foreign investment will increase the competition and help domestic consultancies learn the international way of working.”
Leaders of the Education Consultancy Association, an umbrella body of such firms, had been lobbying for stopping any sort of investment in the sector. “There was no need for foreign investment in education consultancies. Our demand was not addressed,” Bishnu Hari Pandey, president of the association, told the Post. Currently, 1,473 education consultancies are registered with the Ministry of Education, Science and Technology.
The bill now needs approval from the Federal Parliament to come into force.
Dinesh Prakash Acharya, under-secretary at the House committee, said the bill will be tabled for endorsement on Sunday. In view of the Investment Summit 2019 scheduled to be held on March 29 and 30, the government is working to revise a number of laws in order to create an environment conducive to foreign investment.
Published: 16-03-2019 10:29