Nepal Accouting

FAQs About Business Registration in Nepal: Everything You Need to Know

Vijay Shrestha Sep 10, 2025 1:28:47 PM 6 min read

Business registration in Nepal process map for foreign companies

If you plan business registration in Nepal, this deep-dive answers the questions foreign founders ask most. You will learn entry routes, FDI approvals, company registration steps, tax obligations, repatriation rules, and compliance timelines. The path can feel complex, yet the process becomes predictable once you follow the right order and prepare the correct documents. This FAQ translates legal requirements into clear, practical actions.

Quick Snapshot: The Registration Journey

Choose the right entry route for your strategy.
Run name search and reservation with the company registrar.
Draft the Memorandum of Association and Articles of Association.
For FDI: obtain approval from the relevant investment authority.
Register the company with the Office of the Company Registrar.
Register the “industry” where applicable at the One-Stop Service Centre.
Get PAN and, if required, VAT from the tax authority.
Bring investment through proper foreign exchange procedures.
Open bank accounts and set up payroll and tax compliance.
Maintain statutory filings, accounts, and approvals.

H2: Business Registration in Nepal — Your Top FAQs Answered

1) Which entry routes can a foreign company use?

Four common routes:

Private Limited Company with foreign equity (subsidiary or joint venture).
Branch Office for revenue activities under an approved scope.
Liaison (Representative) Office for non-commercial liaison work.
Project Office tied to a specific contract or project.

FDI routes require approval before incorporation and capital inflow. The competent authority depends on investment size and sector.

2) Who approves FDI and when?

The Department of Industry (DOI) typically handles FDI approvals up to a specified threshold.
The Investment Board Nepal (IBN) handles large projects at or above the high-value threshold set by policy.
Secure approval before injecting capital or registering the company. Confirm thresholds current at time of filing.

3) Is there a minimum FDI threshold?

Yes. Nepal sets a minimum foreign equity investment threshold (widely cited as NPR 20 million). Confirm the prevailing threshold when you plan paid-up capital and phasing.

4) What documents do I need for FDI approval?

Expect: application through the government portal, shareholder or JV agreements, KYC, board resolutions from the parent, company profile, draft MoA and AoA, and a financial credibility letter from a recognized bank. Use the latest official checklists to avoid deficiency letters.

5) How do I register the company?

Company registration is with the Office of the Company Registrar (OCR). Steps include name reservation, submission of charter documents, fee payment, and verification. Public companies require a minimum paid-up capital (commonly NPR 10 million). Private companies have no general statutory minimum, though sector rules and practical norms may apply.

6) What tax registrations are mandatory?

All entities require a Permanent Account Number (PAN) from the Inland Revenue Department. VAT registration is required if your supplies exceed the legal threshold or your sector mandates VAT. Registration is completed through the Integrated Tax System portal, followed by on-site verification where applicable.

7) Can I repatriate profits and capital?

Yes. The foreign investment framework safeguards repatriation of investment, dividends, profits, and capital gains, subject to approvals and tax clearance. Applications proceed via the foreign investment approving body and the central bank’s foreign exchange process.

8) How long does the process take?

Indicative ranges:

FDI approval: 2–6 weeks depending on completeness, sector, and queries.
Company registration: 3–7 working days once documents are in order.
PAN: a few days post-submission. VAT verification can extend timelines.
Treat these as planning bands. Complex or regulated sectors may take longer.

9) What are restricted or sensitive sectors?

Certain sectors are restricted, capped, or subject to special licences. Always confirm the latest negative lists and sector guidelines relative to your proposed activities before preparing documents.

10) Do I need industry registration in addition to company registration?

If your activities fall within the policy definition of an “industry,” register at the One-Stop Service Centre after or alongside incorporation. Many services and tech companies complete this step to access incentives and visas.

Choosing the Right Entry Route

Why this choice matters: Your route defines approval pathway, tax exposure, HR flexibility, and repatriation mechanics.

Route	Core Use Case	Commercial Activity	Registration Points	FDI Approval Needed	Typical Setup Notes
Private Limited (with FDI)	Subsidiary or JV	Yes	FDI authority + Company Registrar	Yes (size-based)	Most flexible and common.
Branch Office	Deliver projects, bill clients	Yes (approved scope)	Company Registrar + sector authority	Often required	Taxed as Nepal permanent establishment.
Liaison Office	Market study, coordination	No revenue	Company Registrar	Usually not for equity	Expenses remitted from head office.
Project Office	Specific contract	Yes, contract-bound	Company Registrar + sector authority	Case-specific	Wound up after project completion.

Practical tip: Pre-screen sector permissions and documentary requirements before drafting your MoA and AoA. Align objects and scope with the intended activities and any licence conditions.

The Step-by-Step Playbook (Foreign-Owned Company)

Follow this numbered guide as a project plan:

Pick your route. Subsidiary, branch, liaison, or project office based on control, tax, and client needs.
Confirm sector openness. Check if your activities are permitted and whether caps or special licences apply.
Decide investment size. Identify whether you fall under DOI or IBN oversight.
Prepare documents. MoA, AoA, KYC, parent approvals, financial credibility letter, and supporting materials.
File FDI application. Use the official portal and submit complete packs to avoid back-and-forth.
Respond to queries. Keep a single point of contact to accelerate clarifications.
Reserve company name. Ensure consistency with your intended brand and objects.
Register the company. Obtain certificate of incorporation and company registration number.
Register industry (if applicable). Complete One-Stop Service Centre workflows to access incentives and work visas.
Open bank accounts. Prepare KYC and board resolutions for the bank.
PAN registration. Complete online entry and physical verification steps as guided.
VAT registration if required. Set correct effective date; understand periodic return obligations.
Bring in the investment. Use appropriate remittance channels and documentation for capital evidence.
Set up payroll and HR compliance. Issue contracts, enroll for social security where applicable, and configure payroll taxes.
Establish a compliance calendar. Board meetings, filings, tax returns, and foreign exchange approval events.

Costs and Timelines — What to Budget

Government fees: Depend on capital, company type, document count, and certified translations.
Professional fees: Vary with scope, sector approvals, and urgency.
Time: Plan 4–10 weeks end-to-end for FDI, incorporation, and tax registrations.
Capital inflow: Align with the minimum foreign investment threshold and expected working capital needs.
Contingencies: Budget for possible site verifications, notarizations, and apostilles.

Charter Documents — MoA and AoA Essentials

Key inclusions:

Objects clause aligned to approved business activities.
Shareholding and paid-up capital structure.
Board composition, reserved matters, and quorum.
Share transfer restrictions and exit mechanics.
Dividend policy, reserves, and audit clauses.
Dispute resolution and governing law for shareholder arrangements.

Drafts should mirror FDI conditions and any sector-specific licences. This prevents mismatches and re-filings.

Tax Basics — PAN, VAT, and Ongoing Duties

PAN: Mandatory for all entities. Acquire promptly to open bank accounts and raise invoices.
VAT: Register if you cross the statutory threshold or your activities require VAT. Understand invoice format and periodic return cycles.
Corporate income tax: Plan for advance tax and final returns.
Withholding tax: Apply to cross-border services, dividends, rent, and specific payments.
Repatriation tax clearance: Keep records tidy for dividend and capital repatriation approvals.

Implementation tip: Map tax touchpoints to your monthly close checklist. Automate recurring tasks to avoid penalties.

Governance, Capital, and Reporting Rules

Public companies: Require minimum paid-up capital, commonly cited as NPR 10 million.
Private companies: No universal statutory minimum, but sector norms may apply.
Board and shareholder meetings: Keep minutes, circulate notices, and meet quorum rules.
Annual filings: Maintain statutory registers, beneficial ownership disclosures, and timely returns.
FDI evidence: Preserve bank advices, capital registration, and tax clearances for future repatriation.

Common Pitfalls (and How to Avoid Them)

Objects mismatch: MoA objects do not match the FDI approval. Align documents before filing.
Name conflicts: Skipping preliminary name search. Reserve first to protect branding.
Incomplete FDI pack: Missing board approvals or financial credibility letters. Use the latest checklist.
VAT timing errors: Wrong effective date leads to filing headaches. Confirm during registration.
Repatriation evidence gaps: Keep tax clearance certificates and remittance proofs from day one.

Sector Notes in Brief

Infrastructure and large projects: Expect higher scrutiny and approvals for high-value investments. Public-private partnership rules may apply.
IT and services: Typically lighter on licences, yet confirm export billing rules and data handling.
Manufacturing: Location approvals, environmental impact assessments, and industry registration may be required.
Education, health, and financial services: Often require sector regulator licences in addition to company registration.

Your Master Checklist

Entry route decided and sector openness confirmed.
Threshold check for FDI authority completed.
Document pack prepared per the latest official checklist.
Company name reserved and documentation aligned.
Company registered and certificate issued.
Industry registration completed where required.
PAN and VAT registrations finalized.
Bank accounts opened and payroll set up.
Compliance calendar implemented for filings, tax, and FX events.

Extended FAQ

What is the fastest way to complete business registration in Nepal?

Prepare a complete FDI and incorporation pack. Align MoA and AoA with approved activities. File through the correct authority and the company registrar in a coordinated sequence. Complete PAN immediately after incorporation. Start VAT preparation early if your model requires it. Maintain a single contact to respond to queries quickly.

Do I need FDI approval before company registration?

Yes, if you are injecting foreign equity. Obtain FDI approval first. Then proceed to name reservation and incorporation. After registration, complete industry registration where applicable, followed by tax registrations. Keep all approvals and capital documents organized for repatriation and future audits.

How much is the minimum foreign investment?

The minimum equity threshold commonly referenced is NPR 20 million. Build your capitalization plan around this baseline and align tranches with your operating milestones. Always verify the current threshold before you finalize share subscription schedules.

Can I repatriate dividends and capital gains?

Yes, subject to approvals and tax compliance. Maintain accurate financial statements, pay applicable taxes, secure tax clearance, and apply through the investment authority and central bank process. Keep bank advices, auditor confirmations, and board approvals on file.

What capital rules apply to public vs private companies?

Public companies require minimum paid-up capital (commonly NPR 10 million). Private companies do not have a universal statutory minimum, yet sector rules and investor expectations often set practical floors. Align capital with your regulatory, banking, and customer requirements.