How to Register an IT/Consulting/Trading Business in Nepal

Business registration in Nepal is an important step for foreign companies planning to enter South Asia. The country’s economy is opening up, and IT, consulting, and trading firms are gaining strong traction. If you are exploring company formation in Nepal, this guide explains the entire process in detail—from approvals and incorporation to tax registration and compliance. By the end, you’ll know exactly how to register your business in Nepal and operate successfully.

Why Do Business in Nepal?

Nepal is strategically located between India and China, two of the world’s largest markets. The government is actively encouraging foreign investment through incentives, one-stop approval services, and gradual liberalization of business laws.

Key benefits for foreign investors include:

• Competitive labor costs with a skilled young workforce.

• Tax incentives for IT and export-oriented companies.

• Growing demand for consulting and professional services.

• Improved infrastructure for digital and cross-border trade.

Some sectors are restricted, such as retail trading, media, and certain consultancy services. Always confirm that your business category is eligible before beginning registration.

Business Structures Available for Foreign Investors

Foreign companies can choose among three main structures:

1. Private Limited Company (Subsidiary)

• Separate legal entity under the Companies Act.

• Up to 100% foreign ownership allowed in IT and many service sectors.

• No fixed minimum capital for IT companies.

• Full operational freedom: hiring staff, invoicing, and revenue generation.

2. Branch Office

• Extension of the foreign parent company.

• No separate legal status.

• Can operate in the same activities as the parent.

• Requires sectoral approval (e.g., from relevant ministries).

3. Liaison Office

• Set up for market research, promotion, or communication.

• No commercial or profit-generating activities.

• Simple registration process.

• Useful for testing the market before full entry.

Comparison Table: Business Structures in Nepal

Step-by-Step Business Registration Process

Follow these steps to register your IT, consulting, or trading business in Nepal:

1. Confirm eligibility & get approval
   Check that your industry is open to foreign investment. Apply to the Department of Industry or the Investment Board for foreign investment approval.

2. Reserve a company name
   Submit name options to the Office of Company Registrar (OCR) for approval.

3. Prepare incorporation documents
   Draft the Memorandum and Articles of Association. Collect passports of foreign directors, citizenship of Nepali directors, office lease agreements, and bank credibility certificates.

4. Submit to OCR
   File all documents with OCR. Once approved, receive the Certificate of Incorporation.

5. Register locally
   Obtain a municipal or ward office registration certificate within 35 days of starting business.

6. Tax registration
   Apply for a Permanent Account Number (PAN). Register for VAT if applicable. Trading companies also need customs and import/export codes.

7. Open a corporate bank account
   Inject paid-up capital and report foreign currency inflows to Nepal Rastra Bank.

8. Industry-specific licenses
   Trading firms need a trade license and an EXIM code. IT firms may register for export incentives.

Bulleted Checklist of Required Documents

• Company name reservation form.

• Memorandum & Articles of Association (MOA/AOA).

• Director IDs (passports/citizenship).

• DOI approval letter (for foreign investors).

• Bank credibility certificate.

• Proof of office address (lease agreement).

• Power of attorney for authorized representative (if any).

Government Fees by Capital

Sector-Specific Notes

IT & Software

• 100% foreign ownership permitted.

• Export revenues may be eligible for tax exemptions.

• No minimum capital required for IT companies.

Consulting

• Some consulting sectors cap foreign ownership at 49%.

• A joint venture with a Nepali partner may be required.

Trading

• Requires trade license and EXIM code.

• Certain activities need minimum capital and bank guarantees.

• Majority Nepali ownership often required for pure trading.

Timelines and Costs

• OCR incorporation: 1–2 weeks.

• Local registration: A few days.

• Tax setup: 3–5 days.

• Trading licenses/EXIM: 1–2 months.

Government fees depend on capital (see table above). Professional advisory fees are additional.

Compliance After Registration

• File annual returns and financial statements with OCR.

• Maintain accurate share registers.

• Report foreign investment inflows to the central bank.

• Stay current with labor, tax, and industry regulations.

Frequently Asked Questions

What are the main steps to register a business in Nepal?
Obtain foreign investment approval, reserve a name, prepare incorporation documents, register at OCR, complete local and tax registrations, and secure industry-specific licenses.

How long does company registration take in Nepal?
OCR usually issues a certificate within 7–10 business days. Full setup, including tax and local registration, takes 4–6 weeks.

Can foreigners own 100% of an IT company in Nepal?
Yes. IT and software companies are open to 100% foreign ownership once DOI approval is granted.

Do foreign investors always need a Nepali partner?
No. A local partner is only required in restricted sectors like retail and some consulting fields.

What documents are needed for company registration?
MOA/AOA, director IDs, DOI approval letter, bank certificate, proof of address, and application forms.