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MoCTCA tightens FDI rules in aviation sector

KATHMANDU: The Ministry of Culture, Tourism and Civil Aviation (MoCTCA) has tightened foreign direct investment (FDI) in the country’s aviation sector. The newly prepared draft of the Civil Aviation Act has increased limitations for foreign investors to invest in the aviation sector of the country.

The MoCTCA recently prepared the final draft of the new Civil Aviation Act. The country’s aviation sector will be getting a new act after a gap of 14 years.

According to the draft of the act, foreigners willing to invest in flying schools in Nepal can invest up to 90 per cent of the total investment while prior to this foreigners were allowed to invest up to 95 per cent of the investment. The Nepal government has been allowing foreigners to invest in airline companies, training centers, maintenance repair and overhaul (MRO) services.

As per the draft, the new act will also allow foreign investors to invest in activities related to passenger facilities that include catering services, airport cleaning services, ground handling services, ramp bus services and operation of duty free shops. Foreign investors can invest up to 75 percent in these passenger related services.

Meanwhile, other provisions for foreign investment have been kept the same as in the previous act.

Foreign investors can invest up to 80 per cent in international airline companies, 49 per cent in domestic airline companies and 95 per cent in MRO services. These provisions have remained constant.

Amid this, the new act will also allow any individual or organization to own a private jet. Likewise, the act has also tightened the clauses for import of old aircraft.

The new act will replace the Civil Aviation Act 2006 with new provisions and regulations.

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