NEPSE falls; Nepal lifts FDI cap; KFC wins trademark case against KKFC

Week in NEPSE: Feb 15-19
NEPSE opened the week, slipping by 8.2 points from the previous Thursday’s close.

The index reached as high as 2,682.2 on Monday (Feb 16), but fall persisted through the two trading days of the week, dragging the index to a weekly low of 2,636.4 on the next day before closing at 2,642.2.

NEPSE price movement [Feb 16-17]

Sectoral highlight

This week, the NEPSE index fell to red. Other main indices, the sensitive index and float index, also declined by 0.64% and 0.98%, respectively, indicating low participation across both large-cap and tradable stocks.

Index highlights

Market watch: News, policies, and listing

Government removes investment cap on FDI via automatic route

Last week, Nepal removed the upper investment ceiling for foreign direct investment (FDI) approvals under the automatic route to attract larger foreign projects and speed up investment inflows. 

The Cabinet-approved decision, implemented through a gazette notice by the Ministry of Industry, Commerce and Supplies, keeps the minimum investment threshold at NRs 20 million barring IT-based industries.

Additionally, under the automatic approval system, the government has opened 102 types of businesses to FDI, removing any upper limit on how much foreign investors can invest. The categories include four energy sectors, 13 agriculture and forestry industries, 41 manufacturing activities, 23 service industries, eight infrastructure projects, nine IT-related businesses and four tourism sectors.

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The Cabinet approved the removal of the cap last month, allowing foreign investors to apply through an online platform. Investors must state their country of origin when submitting their application. If they meet the requirements set by the Department of Industry, they receive instant approval. After registration, companies must submit detailed project plans before starting operations.

The new policy is especially significant for the IT sector. Projects such as IT and biotech parks, software development, data processing, digital mapping, BPO, KPO, data centres, data mining, cloud computing, web portals and web hosting can now invest without any capital limit.

Energy projects covered include solar, wind and biogas, as well as feasibility studies for oil and gas. Agriculture and forestry industries range from fruit processing to wood products. Infrastructure projects include film cities, cargo complexes, private warehouses, business complexes, water treatment plants, export processing zones and transport parking facilities.

The reform allows automatic FDI entry across key sectors including energy, agriculture and agro-processing, infrastructure and logistics, tourism and hospitality, IT and digital economy, services, and manufacturing.

The move is expected to simplify procedures, reduce bureaucratic delays, promote digital governance, and strengthen Nepal’s competitiveness in attracting global investors.

KFC wins trademark dispute against KKFC after eight years

American fast-food giant KFC has won a long-running trademark dispute against Krispy Krunchy Fried Chicken (KKFC) in Nepal, eight years after filing its complaint.

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A bench at Nepal’s Department of Industry, which also serves as a quasi-judicial body, issued a decision on February 8 barring KKFC from operating under the disputed brand name. The ruling consolidates three separate trademark cases that KFC had filed since 2017, which were heard together.

KFC had argued that the use of the similar-sounding “KKFC” brand was unlawful and could cause confusion, opposing KKFC’s application for business registration. The DoI has also instructed the operator of the brand KKFC to pay a reparation of NRs 100,000. Nepal’s trademark laws prohibit the registration of marks that harm or closely resemble existing brands. Corporate experts see such a lengthy process to deliver justice when brand names are imitated as inappropriate.