Nepal has ranked a low 118th out of 144 nations on Forbes’ annual list of the Best Countries for Business in 2015.

Nepal is behind Sri Lanka (number 91), India (97), Bhutan (101) and Pakistan (103), but ahead of Bangladesh (121) on the list of the Best Countries for Business. Denmark topped the list of 144 countries.

Nepal has been placed at the bottom of the list due to high levels of corruption and little trade and monetary freedom. Nepal is among the poorest and least developed countries in the world, with about one-quarter of its population living below the poverty line, the report said.

Nepal is heavily dependent on remittances, which amount to as much as 22 percent-25 percent of the GDP. Agriculture is the mainstay of the economy, providing a livelihood for more than 70 percent of the population and accounting for a little over one-third of the GDP.

Industrial activity mainly involves the processing of agricultural products, including pulses, jute, sugarcane, tobacco, and grain. “Nepal has considerable scope for exploiting its potential in hydropower, with an estimated 42,000 MW of commercially feasible capacity, but political uncertainty and a difficult business climate have hampered foreign investment.”

Additional challenges to Nepal’s growth include its landlocked geographic location, persistent power shortages, underdeveloped transportation infrastructure, civil strife and labour unrest, and its susceptibility to natural disasters, the report said.

Lack of political consensus in the past several years has delayed national budgets and prevented much-needed economic reform, although the government passed a full budget in 2013 and 2014. Nepal and India signed trade and investment agreements in 2014 that will increase Nepal’s hydropower potential, it said.