Business registration in Nepal: fixed-fee packages

Business registration in Nepal is straightforward when you know the rules, the sequence, and the agencies. Foreign founders often struggle with fragmented guidance, shifting forms, and bank compliance. This guide fixes that. You’ll see clear steps, realistic timelines, and fixed-fee packages. We also map approvals for FDI, banking, PAN/VAT, payroll, and post-incorporation tasks. The goal is simple: remove friction and help you launch operations with confidence.

Why Nepal now: investor snapshot

Nepal offers access to South Asia with competitive costs and talent. Policy reforms continue under the Companies Act 2063 (2006). Foreign investment is enabled by the Foreign Investment and Technology Transfer Act 2019 (FITTA 2019). Industrial registration aligns with the Industrial Enterprises Act 2076 (2020). Tax administration runs through the Inland Revenue Department (IRD). Foreign exchange control sits with Nepal Rastra Bank (NRB). VAT is 13%. The standard corporate income tax rate is 25% for most sectors. Rates vary by industry and incentives; confirm sector rules before you commit.

What this means for you: Nepal is friendly to compliant structures. You must follow the right order: name, FDI approval (if any), incorporation, bank account, capital inflow approval, PAN/VAT, and payroll setup. Doing it in sequence saves weeks.

At a glance: entity choices and FDI paths

H2 — Business registration in Nepal: entity choices explained

Common options for foreign sponsors

• Private limited company (subsidiary). Fast, limited liability, full operations.

• Branch office. Executes the parent’s scope in Nepal under approvals.

• Liaison/representative office. Non-commercial, no revenue, support role only.

• Partnership/sole proprietorship. Generally for locals; not FDI-friendly.

Which one is right?
Pick a subsidiary when you want full commercial activity and scalable compliance. Use a branch when contracts must be with your foreign parent or a project owner requires it. Choose a liaison only for market research, coordination, or technical liaison without billing.

The fixed-fee packages (transparent scope)

The prices below are indicative, designed for planning. Multi-city work, notarization volume, translations, excess agency visits, and sector approvals may adjust scope. Government fees and taxes are extra at cost.

Package A — Fast-Start Subsidiary (FDI-Ready)

Best for: Standard services, tech, trading, consulting.
Scope:

• Company name clearance and drafting of MoA/ AoA.

• FDI pathway scoping under FITTA 2019 (if applicable).

• Incorporation at OCR and digital profile setup.

• Bank account opening support and KYC pack.

• PAN registration at IRD; VAT decision memo.

• Basic HR onboarding pack (sample contracts, leave policy shell).

• Compliance calendar for Year 1 (board, tax, filings).
  Timeline: ~3–5 weeks after document readiness and approvals.
  Deliverables: Certificate of Incorporation, PAN, basic policy set, Year-1 calendar.

Package B — Branch Office (Project-Driven)

Best for: EPC, engineering, IT services tied to parent contracts.
Scope:

• Branch approval documentation and parent charter/legalizations.

• OCR registration and NRB/DoI touchpoints as required.

• Bank account opening pack and capitalization memo.

• PAN, VAT decision, and PE/withholding guidance.

• Branch compliance calendar.
  Timeline: ~5–8 weeks post document readiness and sector approvals.

Package C — Liaison Office (Non-Commercial)

Best for: Coordination, technical liaison, no revenue.
Scope:

• Permission application, non-commercial activity declaration.

• OCR registration, bank account assistance.

• PAN for withholding compliance if needed.

• Annual report reminders and renewal support.
  Timeline: ~4–6 weeks.

Add-ons 

• Sectoral approvals (e.g., telecom, energy, health, education).

• Foreign staff work visas and labor registrations.

• Payroll setup with ESI/SSF coverage and HR policies.

• Transfer pricing policy and intercompany agreements.

• Trademark filing and IP advisory.

• Customs/B2B import setup and excise compliance.

Step-by-step: the registration journey

1) Decide the entity and shareholding

Confirm whether FDI applies. Choose a company, branch, or liaison. Draft a simple note explaining purpose, activities, capital, and directors.

2) Name reservation at OCR

Propose names with unique keywords. Avoid restricted terms. Keep a backup name ready.

3) Charter drafting (MoA/AoA or board resolutions)

Draft objects, capital, share structure, and governance. Add reserved matters for investor protections. Capture registered office and directors.

4) FDI path under FITTA 2019 (if applicable)

FDI approvals run through the Department of Industry (DoI) or the Investment Board for larger projects. Some sectors may be restricted or need extra permits. Prepare a clear business plan and capital schedule.

5) Incorporation filing at OCR

Submit the application with notarized IDs, resolutions, and forms. Track queries on object clauses or addresses. Secure the Certificate of Incorporation and company number.

6) Bank account opening and KYC

Prepare parent company KYC, ultimate beneficial owner (UBO) data, and signatory matrix. Banks will test substance: office lease, local phone, and board minutes help.

7) NRB approval for foreign capital inflow

Before remitting capital, confirm the approval route and documentary codes. You will need evidence of remittance for future repatriations.

8) PAN and VAT at IRD

PAN is mandatory. VAT at 13% applies if your taxed supplies cross the threshold or your sector requires VAT early. Decide on VAT now to avoid retrospective issues.

9) Social security and labor setup

If you will hire, register for SSF and draft compliant HR contracts. Establish payroll calendars and withholding settings.

10) Post-incorporation and monthly compliance

Board meetings, accounting books, tax returns, VAT filings, TDS, and annual returns. Keep a compliance calendar and close each month cleanly.

Documents checklist 

Corporate set:

• Parent certificate of incorporation and charter.

• Good standing or registry extract.

• Board resolution approving Nepal investment or branch/liaison.

• Power of Attorney for local filings.

• Ownership chart to ultimate beneficial owners.

Individual set (directors/authorized persons):

• Passport copy and recent photo.

• Address proof and mobile/email.

• Short CV (optional but helpful for banks).

Local evidence:

• Registered office lease/consent.

• Tax address proof.

• Local director KYC if any.

Keep these notarized and, where requested, legalized/Apostilled. Prepare certified English translations if originals are not in English or Nepali.

Timelines you can actually plan for

• Name and drafting: 3–5 business days.

• FDI approval (if required): 2–4 weeks for standard cases.

• Incorporation & PAN: 1–2 weeks after approvals.

• Bank KYC & NRB inflow approval: 1–2 weeks, document-dependent.

• VAT and payroll setup: 3–7 business days.

Total duration clusters around 3–8 weeks depending on FDI, sectoral approvals, and bank readiness.

Costs and fee anatomy (what drives them)

Government and statutory charges

• Stamp duties, registration fees, and name reservation fees.

• PAN/VAT registration fees (if any), and digital signatures where applicable.

• Sectoral license fees for regulated activities.

Third-party and logistics

• Notarization, translation, courier/legalization, and consular costs.

• Office lease, company seal, board minute books, and e-sign tools.

• Bank letter charges for KYC, SWIFT confirmations, and remittance narratives.

Professional fees

• Corporate law drafting and filings.

• Tax registration and compliance setup.

• HR documentation and payroll tooling.

Fixed-fee packages combine predictable scopes with capped iterations. Variable components are passed at cost with receipts.

Original insight table: choosing your structure

Risk controls foreign founders often miss

1. Wrong order of approvals. Remittance before NRB approval can delay repatriations.

2. Objects too broad. OCR may query or banks may flag KYC mismatches.

3. VAT timing. Late registration can trigger penalties and input tax loss.

4. Board minutes. Missing resolutions slow down banks and auditors.

5. Payroll compliance. Late SSF or TDS triggers notices.

6. Transfer pricing. Intercompany charges need policy, benchmarking, and documentation.

7. License gaps. Sector approvals are separate from incorporation.

Bank account opening: what the relationship manager expects

• Clear corporate chart and UBO declarations.

• Nepal office evidence and local contact details.

• Authorized signatories and specimen signatures.

• Board resolutions authorizing account opening.

• Sanctions and PEP screening declarations.

• Expected transaction profile and volumes.

• Capital inflow and operating remittance plan.

Prepare a concise KYC pack. Put all director IDs, legalizations, and resolutions in one PDF. Add a one-page business model. Banks love clarity.

Tax and payroll basics 

• Corporate income tax: 25% standard rate for most sectors. Incentives exist for priority industries and regions.

• VAT: 13% on taxable supplies. Export of services can be zero-rated when conditions are met.

• Withholding (TDS): Applies on services, rent, contracts, and salaries per IRD schedules.

• Payroll: Register staff, apply SSF contributions, and file monthly returns.

• Accounting: Maintain books in Nepal and file annual financials and tax returns.

Use a monthly compliance calendar. Close the month by day ten. File VAT and TDS before due dates. Keep bank reconciliations current.

Post-incorporation compliance calendar (Year 1)

Monthly

• VAT returns (if registered).

• TDS returns and payments.

• Payroll, payslips, SSF contributions.

• Bank reconciliation and management accounts.

Quarterly

• Board meeting and management review.

• Intercompany charge true-ups.

Annually

• Annual return to OCR.

• Financial statements and corporate tax return.

• Statutory audit if thresholds or sector rules apply.

• Branch/liaison renewals and reports.

Sector notes you should not ignore

• Financial services, telecom, energy, health, and education often require regulator consent.

• NGO/INGO and development follow separate frameworks.

• Import/export and logistics require customs and excise setups.

• IT/outsourcing must map cross-border service tax positions carefully.

Always check restricted or negative lists before you invest. Some activities are reserved or capped.

Sample documents we draft for you

• Memorandum and Articles of Association tailored to banks and auditors.

• Board resolutions for account opening, authorized signatories, and office lease.

• Intercompany service and cost-sharing agreements.

• Employment contracts, policy handbook, and confidentiality clauses.

• Transfer pricing policy outline and benchmarking scope.

• VAT standard operating procedures and invoice templates.

What we need from you 

1. Confirm the entity type and shareholding percentages.

2. Share certified parent documents and UBO chart.

3. Approve the draft MoA/AoA or branch/liaison resolutions.

4. Provide office address and lease/consent letter.

5. Nominate bank and signatories.

6. Decide on VAT now or later with reasons.

7. Approve the compliance calendar and the fixed-fee package.

Frequently asked questions 

1) Can a foreign company own 100% of a Nepal subsidiary?
Yes, if the sector is open to FDI and FITTA rules are met. Some sectors are restricted or capped. Check the negative list first.

2) How long does registration take?
Standard cases close within 3–8 weeks from document readiness. FDI approvals and sector licenses affect the timeline.

3) Do I need VAT at the start?
Register if your supplies cross the threshold or your sector requires it. Early VAT can also help claim input tax on setup costs.

4) Can I repatriate profits?
Yes, with clean NRB approvals, tax clearance, and documentary proof of capital inflow. Banks rely on these records.

5) What is the difference between a branch and a subsidiary?
A branch is an extension of the parent with approvals. A subsidiary is a separate Nepal company with limited liability.

Business registration in Nepal: fixed-fee packages 

Below is an illustrative matrix. It helps budgeting. We confirm a bespoke quote after reviewing your sector, approvals, and document country.

Disclaimer: Government fees, legalization, translation, courier, and bank charges are excluded and billed at actuals with receipts. Quotes are fixed to defined scopes.

Legislation and official guidance 

• Companies Act 2063 (2006). Incorporation, governance, filings.

• Foreign Investment and Technology Transfer Act 2019. FDI entry, approvals, and repatriation framework.

• Industrial Enterprises Act 2076 (2020). Industrial registration and incentives.

• Income Tax Act 2058 (2002). Corporate tax, withholding, and filings.

• Value Added Tax Act 2052 (1996). VAT registration and returns (13% standard rate).

• Nepal Rastra Bank Foreign Exchange regulations and circulars. Capital inflow and profit repatriation approvals.

• Inland Revenue Department procedures and notices. PAN, VAT, TDS, compliance calendars.

Keep PDF copies in your board data room. Update when the IRD or NRB issues new notices.