Business registration in Nepal: where add-on compliance begins

Registration creates a legal shell. Operations create obligations. Add-on compliance services fill this gap. They keep your entity clean. They protect director liability. They unlock banking and payroll. They support audits and tax refunds. They also reduce friction with vendors and global HQ.

Add-on services cluster into five buckets:

• Foundational tax and identity

• Payroll and labor

• Accounting and indirect tax

• Banking and foreign exchange

• Governance and board secretarial

Each bucket has a regulator. Each has recurring due dates. Map them once. Automate the rest.

The regulator map you will work with

• Office of the Company Registrar (OCR): name, MoA/AoA, directors, filings.

• Inland Revenue Department (IRD): PAN, VAT, TDS, returns, audits.

• Social Security Fund (SSF): employer and employee coverage and contributions.

• Department of Industry (DoI): FITTA filings for foreign investment.

• Nepal Rastra Bank (NRB): foreign exchange, capital inflow, and repatriation.

• Sectoral bodies when relevant: for example, telecom, health, or education.

• Local governments: labor inspections and trade permits in some cases.

Keep these names close. They appear on every calendar invite and resolution.

A month-by-month compliance timeline 

Day 0–7

• Company incorporation completes with OCR.

• Company stamp and letterhead prepared.

• Board resolution template adopted.

Week 2–3

• PAN registration with IRD.

• Open bank account with initial deposit.

• Payroll framework drafted.

Week 3–4

• VAT registration if applicable.

• Apply for SSF employer code.

• Sign employment contracts.

Month 2

• Start monthly TDS filings.

• Start monthly VAT filings if registered.

• Maintain accounting books from Day 1.

Month 3–6

• NRB post-investment filings if foreign equity arrived.

• Beneficial owner information filed where required.

• First internal compliance review.

Month 12

• Year-end financial statements prepared.

• Statutory audit if you meet thresholds.

• Annual returns with OCR.

• Board AGM held and minutes archived.

This timeline works for most entrants. Industry-specific steps may add or shift items.

Foundational registrations and why they matter

PAN: your tax identity

PAN is the starting point. You cannot issue compliant invoices without it. You cannot pay TDS or VAT without it. Complete PAN within your first operating month.

VAT: register when you cross the line or need credits

VAT registration is mandatory if your supplies meet legal thresholds. Many foreign entities register early. They want input tax credits on rent, devices, and services. Register only when you can comply monthly. VAT is precise. Missed filings trigger fines.

SSF: build a compliant payroll backbone

The Social Security Fund covers staff benefits. It requires employer and employee contributions. Registration comes early if you hire. Integrate SSF into contracts and payroll software. Train HR on categories and rate mapping.

Payroll and labor compliance you cannot ignore

Contracts, HR handbook, and registers

Use Nepal-specific templates. Include probation, leave, termination, dispute, IP, and confidentiality clauses. Keep mandatory registers. Keep staff IDs and SSF details.

Payroll cycle and TDS

Set a payroll cut-off and a pay date. Calculate TDS correctly. File monthly. Pay on or before the legal due date. Archive challans and returns.

Leaves, overtime, and holidays

Define leave balances and carry-forward rules. Document overtime approval. Publish a holiday calendar. Keep records for inspections.

Exits and final settlement

Issue experience letters. Clear dues. Pay final payroll and TDS. Update SSF status. Maintain an exit checklist.

Accounting, VAT, and TDS: the monthly rhythm

Bookkeeping from Day 1

Record every bill and receipt. Use consistent chart of accounts. Tag vendors with PAN. Tag expenses for VAT credit eligibility. Keep a monthly close calendar.

VAT returns

Report output tax and input credits. Reconcile purchases and sales. Review non-creditable expenses. Keep VAT invoices that meet form rules. Avoid late filing. Penalties add up.

TDS returns

Apply correct rates based on nature of payment. Withhold at the time of payment or credit. File on time. Give certificates to vendors and staff.

Year-end and audit readiness

Prepare financial statements. Confirm balances with banks and vendors. Keep fixed asset registers. Store supporting documents. Conduct a pre-audit check to avoid surprises.

Banking, foreign exchange, and capital controls

Bank account operations

Use a board resolution to open accounts. Define signatories and limits. Enable online banking. Set internal approvals for vendor payments.

Foreign capital inflow and reporting

If you bring foreign equity, comply with DoI and NRB procedures. Register the inflow. Keep SWIFT and board papers. Late filings can block future repatriation.

Repatriation of dividends and service fees

Plan early for dividend repatriation. You need clean tax records. You also need NRB approvals. Service fee remittances also need documentation. Maintain contracts and invoices.

Governance and company secretarial hygiene

Board meetings and resolutions

Adopt a standard resolution pack. Record director attendance. Approve banking, hiring, leases, and major contracts. Store signed minutes. Maintain a resolutions register.

Annual return and changes

File annual returns on time. Notify regulator of director or address changes. Update MoA/AoA amendments as needed. Use the correct forms.

Beneficial ownership and registers

Maintain shareholder registers. Identify beneficial owners where required. Update changes within the legal window. Keep verification trails.

Sectoral approvals and local permits

Some industries need extra clearances. Health, telecom, education, and NGOs are common examples. Review sector rules before launch. Add them to your compliance calendar. Assign a single owner to coordinate.

Data, IT, and documentation controls

Nepal’s data rules evolve. Follow the Electronic Transactions Act and allied guidelines. Store payroll, tax, and accounting data for the legal retention period. Control access. Set backup schedules. Use audit logs. Prepare for regulator queries. Good documentation cuts response time and risk.

Penalties and risk exposure: a practical matrix

The exact days and rates depend on updated notices. Monitor circulars. Keep a compliance log.

Pricing models for add-on services

Fixed-fee bundles

Great for predictability. You pay one price for a scope. The provider sets SLAs. You get monthly reports. Best for standard entities.

Time-and-materials

You pay for hours. Flexible for unusual needs. You can scale up fast. Monitor hours and outcomes. Good for complex projects.

Hybrid

Use fixed for recurring work. Use hourly for projects. Many entrants prefer this. It balances cost and agility.

The vendor selection checklist (10 steps)

1. Confirm Nepal entity experience in your industry.

2. Review sample compliance calendars and reports.

3. Check escalation paths and response SLAs.

4. Ask for templates: contracts, minutes, registers.

5. Confirm tax and payroll software stack.

6. Verify staff certifications and bar/CA status.

7. Test a mock month-end close.

8. Review internal controls and maker-checker flows.

9. Clarify scope, exclusions, and assumptions.

10. Align pricing to outcomes, not effort.

DCV’s add-on compliance bundles (example scopes)

• Foundation Pack: PAN, VAT assessment, SSF registration, payroll setup, first month returns.

• Monthly Tax Pack: TDS and VAT returns, reconciliations, certificates, vendor support.

• Payroll Pack: Gross-to-net, payslips, SSF remittance, exits, leave tracking.

• Secretarial Pack: Board meetings, resolutions, share register, annual return.

• FX & FDI Pack: DoI and NRB filings, capital inflow records, repatriation support.

• Audit-Ready Pack: Year-end close, schedules, confirmations, auditor liaison.

These are examples. Your final scope should mirror your model and scale.

A realistic entry scenario

A UK software company forms a private limited in Kathmandu. It hires five staff. It invoices global clients. It needs PAN first. VAT depends on supply nature. It opts in early for input credits. Payroll starts with contracts and SSF codes. It files TDS and VAT monthly. It sends foreign equity and files DoI/NRB forms on time. After 12 months, it completes audit and annual returns. No penalties. Clean books. Repatriation approved.

Common mistakes and how to avoid them

Registering VAT too early without process

VAT is monthly work. Do not register until you can file. Build the routine first.

Ignoring SSF while hiring fast

SSF is not optional. Add it to offer letters. Configure payroll before Day 1.

Mixing shareholder loans and equity

Equity and debt have different rules. Document sources. File foreign inflows correctly.

Weak document control

Losing invoices hurts credits. Use a DMS. Assign owners. Review monthly.

Delayed board resolutions

Banks and regulators ask for them. Prepare standard templates. Approve changes in time.

Frequently asked questions (PAAs)

Do I need VAT registration from Day 1?

Not always. It depends on your supply and thresholds. Many foreign firms register early to claim input credits. Register only when you can meet monthly filing standards and maintain clean invoice trails.

How soon must I register for SSF after hiring?

Register as early as possible. Align it with your first payroll run. Include SSF clauses in contracts. Set up contribution mapping in payroll software before processing salaries to avoid back-dated issues and penalties.

What filings follow foreign equity inflow?

File investment details with DoI and NRB within the specified windows. Keep SWIFT, board resolutions, and share allotment papers. These records allow dividend repatriation later. Missing filings can delay or block remittances and trigger additional reviews.

Can I outsource TDS and VAT while keeping in-house payroll?

Yes. Many firms do this. Keep a clear RACI. HR owns data accuracy. Your tax vendor owns filings and reconciliations. Exchange checklists monthly. Approve returns before submission. Store challans and certificates in a shared folder.

What happens if I miss an annual return?

You face penalties and notices. If delays continue, the entity risks strike-off. File overdue returns quickly. Restore registers and minutes. Set calendar reminders and assign a single owner for board, audit, and OCR tasks.

Compliance calendar snapshot 

1. Monthly: TDS returns, VAT returns, SSF remittance, bank reconciliation.

2. Quarterly: Management accounts, tax review, vendor TDS certificates.

3. Semi-annual: Internal compliance audit, board review of risks.

4. Annual: Financial statements, statutory audit (if applicable), OCR annual return, AGM.

What we mean by “evidence-ready” compliance

• Signed board minutes and resolutions.

• PAN, VAT, TDS, and SSF acknowledgements.

• Contracts with tax and SSF clauses.

• Fixed asset, leave, payroll, and vendor registers.

• NRB/DoI filings and bank advices.

• A unified DMS with naming rules.

This pack cuts audit time. It also speeds up repatriations and due diligence.