If you are planning business registration in Nepal, this guide gives you a practical legal checklist from first decision to first invoice. It aligns with current laws on company incorporation, foreign investment (FDI) approvals, tax registrations (PAN/VAT), labor compliance, and ongoing reporting. We keep sentences short. We avoid jargon. You get a clear order of operations, sample timelines, and a comparison of entry structures for foreign companies.
What you will learn:
Which entry structure fits your plan (Private Limited, Branch, or Liaison)
How FDI approval works under the automatic route
Exact sequence: name reservation → incorporation → bank → PAN/VAT → SSF → sectoral licenses
What documents regulators typically ask for
What to budget for compliance during your first 12 months
Choose your entry structure. Private Limited for a local subsidiary. Branch if you want to contract in Nepal without a separate legal personality. Liaison if you only need non‑commercial representation.
Check the sector and investment route. Confirm the sector is open and if the automatic route applies. Confirm minimum capital rules and any thresholds.
Name reservation with OCR. Propose unique names. Provide objectives aligned with your planned activities.
Draft and sign constitutional documents. Prepare MOA/AOA (or branch charter/POA) and board resolutions. Translate and notarize where needed.
FDI approval (if foreign shareholding). Apply to DoI or IBN as per thresholds and route. Include business plan, financials, and ownership chart.
Company incorporation at OCR. Submit forms, MOA/AOA, address proof, director KYC, and FDI approval (if applicable).
Open a bank account. Complete KYC. Inject paid‑up capital as committed.
Register for PAN (and VAT if required). Do this before you invoice. Align HS/SAC codes to your activity.
Labor and social security setup. Prepare employment contracts. Register for Social Security Fund (SSF). Set payroll and leave policies.
Sectoral or local licenses. E.g., telecom, healthcare, education, import/export, or municipal registrations.
Accounting and filings. Adopt a chart of accounts, accounting policy, and a document retention SOP. Plan annual returns, tax returns, and audits.
Use when: You want a Nepali company that can contract, invoice, and hire.
Ownership: Foreign shareholding allowed in most sectors. Negative list applies.
Capital: Meet minimum capital or threshold where applicable, especially for non‑IT sectors.
Tax: Corporate income tax on profits. VAT applies if you cross thresholds.
Banking: Normal local banking with FX controls on inbound capital and repatriation.
Use when: Your parent company wants to operate in Nepal without a separate legal entity.
Scope: Can conduct income‑generating business per licensed scope.
Tax: Taxed as a non‑resident PE on Nepal‑sourced income.
Governance: Must register the foreign company with OCR and maintain local representative.
Use when: You only need representation, research, or coordination. No local revenue.
Scope: No sales. No contracts for revenue. No commercial invoices.
Tax: Typically no VAT or corporate tax due to non‑commercial status, but still file where required (e.g., payroll if you employ staff).
| Factor | Private Limited Subsidiary | Branch Office | Liaison Office |
|---|---|---|---|
| Legal personality | Separate Nepali company | Extension of foreign company | No separate legal personality |
| Revenue in Nepal | Yes | Yes (as authorized) | No |
| Typical use‑cases | Full operations, scaling, local hiring | Project execution, short to mid‑term contracts | Market research, coordination, partner support |
| FDI approval | Required if foreign shareholding | Not a shareholding, but permissions/registrations apply | Registration/permission with OCR/DoI as required |
| Tax profile | Corporate income tax, VAT if applicable | Tax on Nepal‑sourced profits as PE | Minimal; payroll taxes if employing |
| Setup speed | Medium | Medium | Fast |
| Exit | Share transfer or liquidation | Close branch; settle liabilities | Close liaison; settle employment |
Confirm your activity is open for FDI. Use the latest negative list guidance.
If you are in IT/ICT, check if the automatic route and relaxed minimum thresholds apply.
Document the HS/SAC codes you will use for invoicing and import/export.
Automatic route for eligible sectors and thresholds (faster pre‑approval).
Department of Industry (DoI) handles most standard approvals.
Investment Board Nepal (IBN) handles large or strategic projects.
Prepare 2–3 options.
Ensure objectives in MOA match the proposed business.
Keep the name distinct from existing companies and trademarks.
MOA/AOA with clear objects, share capital, and governance.
Board resolutions authorizing incorporation and bank signatories.
Power of Attorney for local filings.
Translations and notarizations where required.
Prepare business plan, financial model, and ownership chart.
Provide source of funds and beneficial owner (UBO) details.
Include technology transfer agreements if relevant.
Get approval letter before moving capital under the normal route.
File standard forms, MOA/AOA, address proof, director KYC, and FDI approval.
Receive Certificate of Incorporation and Company PAN request support documents if applicable.
Open current account with a local bank.
Inject capital as per approval and constitutive documents.
Keep Foreign Inward Remittance (FIR) advice and bank credit notes for audit and repatriation.
Apply for PAN for all entities.
Assess VAT registration based on activity and thresholds. Many B2B sectors register from day one.
Map your invoice format and return cycle (monthly VAT; annual income tax).
Prepare compliant employment contracts (probation, leave, termination, notice, benefits).
Register with the Social Security Fund (SSF) and set contribution workflows.
Set up payroll with tax withholding and payslip templates.
Examples: telecom, healthcare, education, import/export, municipal trade license, environmental approvals where applicable.
Note data protection, cybersecurity, and consumer protection obligations for tech and e‑commerce.
Adopt an accounting policy and a chart of accounts.
Keep a voucher & document retention SOP.
Track annual return to OCR, tax returns to IRD, withholding filings, and audit timelines.
Core:
MOA/AOA (signed). Board resolution(s). Power of Attorney.
Passport(s) of foreign directors/shareholders. Local IDs of Nepali directors.
Registered office agreement and utility proof.
Bank reference letter and UBO declaration.
For branch/liaison: parent company COI, charter, latest financials, and authorization.
For FDI:
Application form, business plan, 3–5 year projections.
Organizational chart and shareholding structure.
Source of funds and estimated capital schedule.
Technology transfer or IP license (if applicable).
For tax (PAN/VAT):
Certificate of Incorporation, MOA/AOA, company stamp.
Premises evidence and contact details.
Signatory identification and photos.
Name reservation: 1–3 business days if documents are clean.
FDI approval: Automatic route can be fast. Standard DoI review may take longer.
OCR incorporation: Often within a week after complete filings.
PAN/VAT: A few days once incorporation is done and premises are verified.
SSF registration: 1–3 days after employer profile creation.
Sectoral licenses: Depends on sector; plan in parallel.
One‑off costs: Translations, notarizations, legalization, stamp duty, government fees.
Recurring compliance: Accounting, payroll, VAT return filing, annual returns, audit, and statutory registers.
People: Recruitment, onboarding, training, and HRIS.
Office and tech: Lease, internet, cybersecurity, bookkeeping, e‑invoicing.
Contingency: Always add 10–15% for misc. regulatory asks and re‑filings.
Objects too broad in MOA. Keep them aligned to the real activity. Expand later via amendment if needed.
Skipping the negative list check. Verify before name reservation and FDI filing.
Underestimating translations. Certified translations take time. Start early.
Hiring before SSF setup. Register first to avoid penalties.
VAT confusion in mixed supplies. Map SAC/HS codes and place of supply rules before your first invoice.
Confirm sector openness and route (automatic or standard).
Lock entry structure and shareholding.
Prepare MOA/AOA or branch/liaison documents.
Reserve name at OCR.
File FDI approval (if foreign shareholding) with plan and projections.
Incorporate at OCR; receive COI.
Open bank account; inject capital as approved.
Apply for PAN and VAT (if needed). Configure e‑filing access.
Create SSF employer profile; onboard staff to SSF.
Draft HR policies; issue compliant contracts.
Map accounting, tax calendars, and audit.
Start operations; keep all FIR and approval letters safe.
Centralize statutory data and KYC in one folder.
Use a compliance calendar with reminders.
Review MOA objects before big contracts.
Align invoices with registered address and PAN/VAT.
Train managers on leave, overtime, and termination rules.
Primary keyword: Business registration in Nepal.
Use in first paragraph, in at least one H2 (this section), in one image alt tag, and the conclusion.
Sprinkle LSI terms: company incorporation, FDI approval, OCR, DoI, IBN, PAN, VAT, SSF, labor compliance, negative list, automatic route.
Keep sentences short. Use scannable headings.
Suggested hero image: Incorporation checklist on a desk with Nepal map pin and company seal.
Image alt text: Business registration in Nepal checklist with company stamp, Nepal map pin, and legal documents on a desk.
| Month | Corporate | Tax | Labor/HR | Notes |
| Month 1 | Incorporation complete; board minutes filed | PAN/VAT obtained | SSF registration done | Bank FIR saved for repatriation records |
| Month 2 | Statutory registers updated | First VAT return cycle tested | Issue compliant employment contracts | Payroll calendar locked |
| Quarter 1 | File VAT and withholding returns | Advance tax estimate reviewed | Leave and overtime policy training | Internal control checklist applied |
| Quarter 2 | Board review; related‑party policy | Mid‑year VAT reconciliation | SSF contributions tested | Vendor KYC and WHT mapping |
| Quarter 3 | Pre‑audit prep starts | Annual tax planning note | HR audit of files and SSF | Update risk register |
| Quarter 4 | AGM and annual return prep | Final tax computation | Year‑end payroll and benefits check | Document archive and backup |
Q1. Can a foreigner register a sole proprietorship in Nepal?
No. Foreign investors invest through companies (private or public) or establish a branch/liaison of a foreign company. Proprietorships and traditional partnerships are not open for foreign investment.
Q2. What is the fast path to start an IT company?
Check the automatic route for IT/ICT. For eligible projects, pre‑approval can be quick and may waive minimum thresholds specific to ICT under current notices.
Q3. When do I need VAT?
Register when your activity and scale require it. Many B2B exporters or service providers register from day one to claim input VAT and ensure compliant invoicing.
Q4. What is SSF and is it mandatory?
The Social Security Fund is a contribution system for employees. Employers register and contribute for staff under current schemes. Build this into payroll before hires start.
Q5. Can a liaison office sign sales contracts?
No. A liaison office is non‑commercial. It can coordinate or research, but it cannot invoice or sign revenue contracts in Nepal.