uaranteeing Investment Security Is Key to Revival as Nepal’s Private Sector Seeks to Rise from the Ashes

Nepal stands at a delicate crossroads following the Gen-Z–led movement of Bhadau 23 and 24, 2082. While the protests have reignited public hope for reduced corruption and stronger governance, they have also left behind deep scars—particularly on the country’s private sector. As an interim government attempts to respond to demands for reform and accountability, the challenge now lies in restoring confidence among entrepreneurs whose assets, businesses and livelihoods were directly affected during the unrest.

During the movement, incidents of arson, vandalism and looting targeted not only state symbols but also private enterprises. For business owners who had invested years of effort, loans and personal savings into building enterprises, the destruction was devastating. Shops were burned, factories vandalized and, in some cases, even private residences were attacked. This has reinforced a long-standing fear within Nepal’s business community: that during periods of political upheaval, private property becomes an easy target.

The private sector argues that such attacks stem from a persistent misconception—that profit-making is inherently exploitative or illegitimate. Entrepreneurs counter this narrative by pointing out that businesses exist to provide goods and services, generate employment and contribute revenue to the state. Criminalizing profit, they warn, discourages investment and undermines the very economic base that supports public welfare. Without strict legal consequences for vandalism and violence, they caution, a culture of impunity risks taking root.

Despite the damage, business leaders emphasize that Nepal’s private sector remains resilient and responsible. According to joint studies by international financial institutions and domestic business bodies, the private sector contributes more than four-fifths of the national economy and provides the vast majority of employment. It also accounts for most export earnings and income tax revenue. Even during the COVID-19 crisis, when courts allowed tax deferrals, many entrepreneurs chose to pay taxes early to support government finances—an example they cite to underline their commitment to national stability.

In the aftermath of the recent unrest, the government has taken some steps to ease immediate pressure. Temporary relief through customs, insurance and banking facilities was announced following consultations with business associations. Security coordination has also improved, with industry chambers included in district-level security committees. While these measures have been welcomed, private sector representatives stress that effective implementation will be crucial. Symbolic decisions alone, they argue, will not restore confidence unless entrepreneurs feel genuinely protected.

Initial assessments paint a worrying picture. Business associations estimate physical damage worth tens of billions of rupees, with total economic losses significantly higher once disrupted supply chains, tourism decline and lost productivity are included. Although conditions have begun to stabilize, business leaders warn that prolonged uncertainty could further weaken tourism, trade and investment. International financial institutions have already revised Nepal’s growth outlook downward, heightening concerns about an extended slowdown.

Against this backdrop, the private sector is calling for a clear political and policy signal. One key demand is a formal cabinet-level commitment recognizing the role of the private sector and guaranteeing protection against violence and obstruction. Business groups have proposed a structured Private Sector Protection and Promotion Program, aimed at ensuring security, fast-track services and coordinated government support without adding fiscal burden.

Governance reform is another central theme. Entrepreneurs argue that sustainable stability cannot be achieved without credible mechanisms to ensure transparency and accountability. They advocate for governance bodies that include private sector participation, warning that commissions composed solely of government officials often fail to deliver results. Simplifying business registration, reducing bureaucratic touchpoints and digitizing services are seen as immediate steps that could demonstrate seriousness about reform.

Youth entrepreneurship features prominently in the private sector’s vision for recovery. While recent startup policies and grant programs are seen as positive, business leaders say implementation remains weak. They are calling for comprehensive programs that support young entrepreneurs from registration and financing to market access and exit strategies. Greater use of technology, artificial intelligence and data infrastructure is viewed as essential to making Nepal competitive and retaining talent.

Investment security, however, remains the cornerstone issue. Businesses involved in infrastructure projects highlight frequent disruptions caused by local disputes, environmental approvals and land-use conflicts. Once the state has approved a project, they argue, it must ensure uninterrupted construction and operation. Without such guarantees, costs escalate, timelines slip and investor confidence erodes—particularly for large, long-term projects.

To counter the narrative that large-scale investment is impossible in Nepal, business federations have jointly launched a domestic investment company aimed at pooling local capital for major infrastructure projects. The initiative is intended to send a message that Nepali investors are willing to commit—provided the state offers stability, predictability and protection.

Several urgent policy issues also demand attention. Export incentives have been suspended as Nepal moves toward graduation from least developed country status, a shift that businesses say reflects statistical progress rather than real competitiveness. They are urging the government to seek transitional arrangements, as other countries have done, to avoid sudden shocks to exporters. Similarly, with global trade dynamics shifting, Nepal is seen as having a narrow window to attract regional investment—an opportunity that could be missed without swift policy action.

Concerns also extend to banking and finance. Despite ample liquidity in the banking system, lending remains sluggish due to strict credit guidelines and risk classifications. Businesses are calling for more flexible, dialogue-based approaches between banks and borrowers to unlock stalled investment. At the same time, they warn that unchecked informal imports along border areas are undercutting domestic producers, requiring coordinated cross-border enforcement.

Tax policy, too, is under scrutiny. With consumer demand weak, business groups have proposed temporary reductions in income and value-added tax rates to stimulate spending. Aligning tax rates more closely with neighboring countries, they argue, could curb smuggling while boosting legitimate trade.

Ultimately, the private sector frames its demands within a broader appeal for stability, dialogue and cooperation. Entrepreneurs insist they are ready to support political consensus, timely elections and national reconciliation efforts. But they stress that economic recovery will remain fragile unless investment security is treated as non-negotiable.

As Nepal seeks to turn a moment of upheaval into an opportunity for reform, the message from the private sector is clear: guarantee safety, ensure rule of law and create a predictable environment, and businesses will rebuild—even from ashes. Without these assurances, however, the risk is not only economic stagnation but the erosion of trust between the state and the very actors who drive growth and employment.