Business registration in Nepal: NRB & FDI approvals guide

Starting your business registration in Nepal is exciting and complex. Foreign investors must align three tracks: company formation, FDI approval, and Nepal Rastra Bank (NRB) compliance. This guide breaks each step into plain actions. You get timelines, document lists, and regulator expectations. You also learn how to avoid common mistakes that delay approvals and money movement.

Who is this for?
Overseas founders, PE/VC funds, multinational groups, and export-oriented manufacturers planning Nepal entry.

What you will get.
A field-tested roadmap that matches how regulators actually work today.

Quick answer: the three-track playbook

1. Choose an entry route. Subsidiary, branch, or liaison office.

2. Secure FDI approval. Department of Industry or Investment Board Nepal, based on project scope.

3. Form the entity. Register at the Office of the Company Registrar.

4. Open the bank account. Prepare to receive foreign capital.

5. Bring in capital. Remit through banking channels and comply with NRB reporting.

6. Register for tax. Obtain PAN and, if required, VAT at Inland Revenue.

7. Post-setup compliance. Board, payroll, SSF, and sector approvals.

8. Operate and repatriate. Maintain accounts and complete NRB checks before dividends or exits.

Why Nepal, now?

• Strategic location. Access to India and China trade corridors.

• Young workforce. Competitive wages and trainable talent.

• Policy support. FDI promotion through one-stop desks and streamlined approvals.

• Sector pull. Hydropower, tourism, agritech, BPO, and light manufacturing show steady demand.

Citations you can rely on (no links):
Foreign Investment and Technology Transfer Act, 2019 (FITTA 2019).
Companies Act, 2063 (2006).
Industrial Enterprises Act and Rules.
NRB Foreign Investment and Foreign Loan Management regulations and circulars.
Income Tax Act, 2058 and VAT Act, 2052.

Always confirm sector-specific notices and current thresholds before filing. Policies evolve.

Business registration in Nepal: NRB and FDI pathways 

Foreign sponsors must align corporate, FDI, and forex processes. Think in parallel, not sequence.

• Corporate track: Name reservation and incorporation at the Office of the Company Registrar (OCR).

• FDI track: Approval at the Department of Industry (DoI) or Investment Board Nepal (IBN).

• Forex track: Capital inflow and repatriation under NRB rules and bank due diligence.

Where approvals usually sit

• DoI handles most FDI, technology transfer, and standard sectors.

• IBN reviews large or strategic projects under the IBN Act and FITTA.

• NRB controls foreign exchange, capital inflow, loans, and repatriation.

Entry routes for foreign investors

You can enter Nepal using a subsidiary, branch, or liaison office. A joint venture with a local partner is also common.

Comparison table: route, approvals, and use-case

Restricted or approval-heavy sectors may require extra steps. Check sectoral caps, environmental clearances, and line-ministry approvals.

FDI approval path: DoI vs IBN

Department of Industry (DoI)

• Handles most foreign equity and technology transfer cases.

• Reviews shareholding, paid-up capital, and business plan.

• Issues the FDI approval letter and technology transfer approval if applicable.

Investment Board Nepal (IBN)

• Governs large or strategic investments.

• Coordinates with ministries for hydropower, infrastructure, and public-private partnerships.

• Grants approval and, where relevant, a project development agreement.

Legal anchors: FITTA 2019 for approvals and minimum investment, IBN Act for qualifying projects, and Industrial Enterprises Rules for operational licensing.

What NRB looks for and why it matters

NRB safeguards foreign exchange. It verifies that capital arrives through banking channels and that returns flow back legally.

Core NRB checkpoints

• Inward remittance proof. SWIFT copy and bank advice with investor’s name.

• Capital registration. The bank records the equity inflow against your shares.

• Foreign loan/ECB registration. Register terms and drawdowns before disbursement.

• Share transfers. NRB approval is needed when foreign shareholders change.

• Repatriation. Dividends, sale proceeds, and liquidation require NRB clearance.

Citations: NRB Foreign Investment and Foreign Loan Management bylaws and unified circulars. Keep all bank advices and board resolutions ready.

Step-by-step: from decision to first invoice

Phase 1: Strategy and eligibility

• Confirm sector openness and any caps.

• Choose subsidiary, branch, or liaison based on revenue needs.

• Draft shareholding, director mix, and governance rules.

Phase 2: Name and documents

• Reserve the company name at OCR.

• Prepare charter documents: MOA, AOA, and board resolutions.

• Notarize investor KYC documents and parent company papers, if any.

Phase 3: FDI approval

• File FDI application at DoI or IBN with business plan and projections.

• Seek technology transfer approval if using royalty, trademark, or technical fees.

• Receive approval letter and conditions.

Phase 4: Incorporation

• Register at OCR with the FDI approval attached.

• Obtain the certificate of incorporation and company number.

• Appoint directors and issue share certificates.

Phase 5: Banking and capital inflow

• Open a company bank account and, if required, a designated FDI account.

• Remit capital through banking channels to the company.

• Ensure SWIFT details match investor identity and purpose.

Phase 6: Tax and local operations

• Obtain PAN.

• Register for VAT if mandatory.

• Enroll in the Social Security Fund if hiring.

• Set up payroll, accounting, and statutory registers.

Phase 7: Sector approvals and leases

• Get industry licenses if required.

• Finalize office or plant leases.

• Complete environmental checks where applicable.

Phase 8: Ongoing and repatriation readiness

• Close books monthly and quarterly.

• Prepare for dividend remittance with NRB and tax filings.

• Update FDI records on share changes.

Documents checklist for foreign sponsors

Corporate and sponsor documents

• Passports of promoters and directors.

• Parent company registration and board resolutions for branch or JV.

• Power of Attorney for local filing.

FDI and project documents

• Business plan and financial projections.

• Technology transfer agreements, if any.

• Lease intent or location plan for operations.

Banking and NRB documents

• SWIFT inflow copy and bank credit advice.

• Auditor’s certification for capital recognition.

• Board resolutions on share allotment and dividends.

Tax and HR documents

• PAN certificate and VAT certificate, as applicable.

• Employment contracts and SSF enrollment proof.

Keep notarized copies and translations where required.

Capital inflow and equity recognition

Getting money in is not enough. You must register it correctly.

• Remit from the investor’s bank account only.

• The bank must tag the inflow as share capital.

• The company must allot shares and update statutory registers.

• Auditors confirm paid-up capital and file returns.

Mis-tagged inflows cause repatriation issues years later.

Foreign loans and related-party funding

You can raise foreign loans for working capital or capex. Follow these rules.

• Get prior registration of loan terms with NRB.

• Observe interest caps, tenor, and debt-equity expectations.

• Report drawdowns, interest, and repayments on time.

• For shareholder loans, align with transfer pricing and thin capitalization norms.

Repatriation: dividends, exits, and liquidation

You can repatriate profits and capital if you follow the trail.

• Dividends. Ensure audited accounts, tax clearance, and board approval.

• Share sale proceeds. Get valuation and NRB approval for transfer and remittance.

• Liquidation. Clear liabilities, obtain regulator no-objections, and remit balances.

Citations: FITTA 2019 for repatriation rights and NRB rules for documentation and timing.

Taxes you should budget

• Corporate Income Tax. Rates depend on sector and incentives.

• Withholding Tax. Applies to services, royalties, interest, and dividends.

• VAT. Many services and goods are in scope.

• Social Security Fund. Employer and employee contributions apply when hiring.

Citations: Income Tax Act, VAT Act, Social Security Fund Rules, and sector incentive notices.

Timelines and practical expectations

Actual times depend on filings and sector reviews. Use these planning ranges.

• Name reservation: 1–2 working days.

• FDI approval (standard): several weeks from a complete file.

• Company registration: about one week after FDI approval.

• PAN: 1–3 days after incorporation.

• VAT: usually within a week with complete documentation.

• Capital registration at bank: within days of accurate SWIFT and board allotment.

Early board resolutions and clean KYC save weeks.

Costs to factor beyond fees

• Translations and notarization. For foreign documents.

• Legal and audit. Drafting, filings, and confirmations.

• Bank charges. Inward remittance and compliance checks.

• Lease and fit-out. For offices or plants.

• Licensing. Sector permits, environmental work, and inspections.

Technology transfer and royalties

Many investors combine equity with technology transfer. Examples include brand licensing and technical support.

• Get technology transfer approval along with FDI.

• Price at arm’s length and document services.

• Pay and report withholding tax on fees.

• Align royalty terms with the business plan and currency rules.

Governance and boards

Keep control and compliance aligned.

• Minimum directors per the Companies Act.

• Clear roles for local director signatories.

• Board meetings and minutes maintained.

• Related-party policies for group transactions.

Compliance calendar: your first year

Month 1–2

• Incorporate, obtain PAN, and open bank accounts.

• Remit capital and allot shares.

• Register for VAT if needed.

Month 3–6

• Hire staff and enroll in SSF.

• Set up accounting and payroll.

• Begin sector licensing if required.

Month 7–12

• Complete first audit cycle.

• Prepare dividend policy.

• Review tax and NRB compliance status.

Numbered list: avoid these common mistakes

1. Filing company registration before FDI approval.

2. Remitting capital without the correct purpose code.

3. Allotting shares without bank advice or SWIFT copies.

4. Forgetting technology transfer approval while using royalties.

5. Missing VAT registration when invoices start.

6. Treating liaison office as a trading entity.

7. Ignoring NRB approval on foreign share transfers.

8. Under-documenting board minutes and allotments.

Bulleted list: practical tips that speed approvals

• Use consistent names across all documents.

• Prepare a clear sources-of-funds write-up.

• Align the lease address with filings.

• Number every page of your application sets.

• Keep originals and notarized copies in separate folders.

Sector notes you should not skip

Hydropower and infrastructure

• Expect IBN involvement for large projects.

• Environmental and power purchase approvals are core.

BPO and outsourcing

• Straightforward route via subsidiary.

• VAT treatment depends on service export.

Manufacturing and agritech

• Check Industrial Enterprises registration.

• Consider bonded warehousing and customs incentives.

Education and healthcare

• Licensing is strict.

• Factor longer timelines and local partnerships.

Original insight table: approval friction vs control