Business registration in Nepal: startup roadmap 2025

If you are exploring business registration in Nepal, this 2025 roadmap gives you a complete, plain-English guide built for foreign founders and cross-border teams. We unpack entity choices, FDI approvals, timelines, costs, banking, tax, and compliance—plus practical pitfalls to avoid. The goal is simple: help you set up fast, stay compliant, and operate confidently in Nepal.

Why Nepal, and why now?

Nepal sits between two huge markets and offers a cost-efficient base for services, tech, manufacturing support, and shared back-office teams. The government continues to streamline online filings, foreign investment approvals, and industry licensing. For many founders, the country is ideal for building engineering teams, outsourced operations, and regional support centers—while staying close to India and China supply chains.

Business registration in Nepal: entity options for foreign investors

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Choosing the right structure drives your tax, HR, invoicing, and profit repatriation rights. Below are the common paths.

Private Limited Company (most common for FDI)

• Separate legal entity with limited liability.

• Can be 100 percent foreign-owned in most open sectors.

• Issues shares; directors manage the company.

• Eligible for profit repatriation after audits and tax clearance.

• Best for operating activities, staff hiring, and invoicing.

Public Limited Company

• Suitable for regulated or capital-intensive ventures.

• Higher governance and disclosure standards.

• Rare for early-stage foreign entrants unless planning a public float.

Branch Office (of a foreign company)

• An extension of the foreign parent.

• May be allowed in selected sectors or projects.

• Taxed on Nepal-sourced income; compliance can be heavier.

• Repatriation via parent; profits treated at branch level.

Liaison (Representative) Office

• Non-commercial presence for research, marketing liaison, and coordination.

• Cannot invoice or generate local revenue.

• Lower operational scope; simpler but limited.

Partnership / Sole Proprietorship (resident-led)

• Simple for local founders.

• Not suitable for FDI or cross-border structures.

Not-for-Profit Company (Section-166)

• For social purpose; restrictions apply on profit distribution.

• Sometimes used for development or sector alliances.

The 2025 setup roadmap (step by step)

Short sentences. Clear actions. This is your execution checklist.

1) Strategy and name clearance

• Confirm sector openness to FDI and any caps.

• Check proposed name availability and restrictions.

• Prepare brief business plan and initial capital plan.

2) FDI approval pathway (if any foreign shareholding)

• Determine competent authority by sector and investment size.

  • Most projects: Department of Industry (DoI).

  • Large/infrastructure: Investment Board Nepal (IBN).

• Submit application with shareholder IDs, corporate docs, plan, and capital structure.

• Receive a Letter of Approval authorizing investment and company formation.

3) Company registration at the Office of the Company Registrar (OCR)

• Draft and file Memorandum and Articles of Association.

• Provide director/secretary consents and registered office details.

• Obtain Certificate of Incorporation and company registration number.

4) Bank account opening and inward remittance

• Open an FDI account with a commercial bank.

• Bring in equity capital as approved.

• Bank issues inward remittance evidence used for share allotment and later repatriation.

5) Share allotment and corporate records

• Allot shares after funds land.

• Update shareholder registers and statutory records.

• Issue share certificates.

6) PAN and VAT (if applicable) at Inland Revenue Department (IRD)

• PAN is mandatory for all companies.

• VAT registration required if crossing thresholds, importing, or by sector rule.

7) Social Security Fund (SSF) and labor onboarding

• Register employer and employees with SSF.

• Set up payroll, leave registers, and HR policies.

• Comply with minimum wage and benefits standards.

8) Industry-specific licenses

• Examples: ICT/telecom, health, education, energy, finance, hospitality, e-commerce, and food.

• Sequence licenses early to avoid go-live delays.

9) Immigration planning (if deploying expatriates)

• Secure business visa, work permits, and labor approvals as required.

• Prepare assignment letters and police clearances if requested.

10) Operating go-live

• Sign office lease and utilities.

• Implement accounting, invoicing, inventory, and tax systems.

• Launch vendor/customer onboarding.

Indicative timeline: what to expect in 2025

• Strategy, name search, and document prep: 1–2 weeks.

• FDI approval (DoI typical): 3–6 weeks from complete filing.

• OCR incorporation: 3–7 working days from acceptance.

• Bank account and first remittance: 1–2 weeks depending on KYC.

• PAN/VAT: 2–7 working days after incorporation.

• SSF and payroll launch: 1 week.

• Sector licenses: 2–8 weeks based on regulator and sector.

Critical path items are FDI approval, first remittance, and any sector license. Build buffers around those.

2025 cost map: government fees and operating costs (indicative)

• Company registration fees: scale with authorized capital.

• Stamp duties for AOA/MOA and share certificates.

• PAN/VAT filing: nominal fees but consider operational set-up costs.

• Notarization, translation, and legalization for foreign documents.

• Banking KYC and remittance charges vary by bank.

• Accounting, audit, and tax filing costs depend on volume and deadlines.

Budget buffers for legalization, translations, and couriering original documents.

Comparison table: choose the right structure

Original insight for decision-making.

Taxes and accounting basics for foreign-owned companies

• Corporate income tax applies to Nepal-sourced profits.

• Withholding taxes can apply on services, royalties, interest, and dividends.

• VAT at standard rates for taxable supplies; exemptions by sector.

• Year-end statutory audit is required for companies.

• Maintain compliant books, vouchers, and e-invoicing where needed.

• Consider transfer pricing for cross-border group services.

• Tax holidays and incentives may apply in promoted sectors or zones.

Work with a local tax adviser for rate specifics and incentive eligibility. Rates can change through annual Finance Acts.

Banking, foreign exchange, and repatriation

• Bring capital only through Nepal’s regulated banking channel.

• Keep inward remittance evidence and share allotment records organized.

• Repatriate dividends or technical service fees after: audited accounts, tax clearance, and bank compliance checks.

• Notify your bank early about expected timelines and documents.

Employment, payroll, and HR compliance

• Put written employment agreements in place.

• Register and contribute to SSF within deadlines.

• Track attendance, leave, and overtime per labor standards.

• File payroll taxes and social contributions monthly.

• Maintain a safe and inclusive workplace policy set.

• For expatriates, keep visas and work permits current.

Sector and location considerations

• IT / BPO / Shared Services: Favor urban centers with talent pools. Plan robust data and IP clauses in contracts.

• Manufacturing support / logistics: Assess customs, warehousing, and cross-border rules.

• Tourism and hospitality: License sequencing and safety standards matter.

• Healthcare / education: Expect higher licensing and facility compliance.

• Energy and infrastructure: Larger approvals and environmental clearances.

Documents checklist (founder pack)

Corporate and personal IDs

• Passports or national IDs for all foreign shareholders and directors.

• Company documents for corporate shareholders, with notarization and legalization as required.

Company-formation set

• Draft MOA and AOA.

• Board resolutions and consents.

• Registered office lease or consent letter.

FDI and banking

• DoI/IBN approval letter.

• Share subscription plan and capital schedule.

• Bank KYC forms and inward remittance slips.

Tax and labor

• PAN certificate.

• VAT certificate (if registered).

• SSF registration and payroll set-up documents.

Licensing and operations

• Sector license applications and supporting technical files.

• Environmental or safety documents if required.

• Standard contracts: employment, vendor, and customer terms.

A 12-month compliance calendar (sample)

1. Month 1–2: Incorporation, PAN/VAT, SSF, first audit engagement letter.

2. Month 3: First VAT and withholding filings; payroll cycle stable.

3. Month 4–6: Sector license renewals; internal controls review.

4. Month 7–9: Transfer pricing and intercompany agreements review.

5. Month 10–11: Pre-audit reconciliations; stock and fixed asset checks.

6. Month 12: Annual audit, board approvals, tax clearance, and dividend planning.

Keep a rolling checklist with owners and due dates. Missed filings cause delays in repatriation.

Mistakes to avoid (and how to fix them)

• Skipping FDI approval: Leads to blocked remittances. Always secure approval first.

• Under-documented capital inflows: Keep remittance slips and allotment proofs.

• Treating a liaison office like a trading entity: It cannot invoice. Choose a private limited instead.

• Late VAT or withholding filings: Triggers penalties and tax clearance delays. Build filing cadences early.

• No transfer pricing policy: Align intercompany services and document benchmarking.

Service packages and pricing (indicative, 2025)

Transparent inclusions help you budget. Final quotes depend on your sector, capital, volume, and licensing.

Out-of-scope add-ons: translations, notarization/legalization, couriering originals, bank charges, and government fees.

Numbered launch plan you can follow

1. Confirm sector openness and equity split.

2. Pick structure: private limited vs branch vs liaison.

3. Prepare founder KYC and corporate docs.

4. File FDI approval and respond to queries fast.

5. Register company at OCR; obtain certificate.

6. Open bank account; remit capital; allot shares.

7. Obtain PAN and, if needed, VAT.

8. Register with SSF; finalize payroll.

9. Secure sector licenses.

10. Go live with accounting, invoicing, and tax filings.

Bullet quick tips for faster approvals

• Submit complete packs with clear, consistent spellings.

• Use checklists for notarization and legalization chains.

• Maintain a single source folder for all approvals and certificates.

• Align board resolutions with local templates.

• Keep bank in the loop on timelines and expected remittances.

FAQ 

1) Can foreign investors fully own a company in Nepal?
Yes, in most open sectors. Restrictions and caps exist in specific activities. Always confirm sector status before investing.

2) Do I need FDI approval if I am a foreign shareholder?
Yes. Secure approval from the competent authority first. Your bank and tax office will rely on this for capital, audits, and repatriation.

3) How long does business registration in Nepal take in 2025?
Simple local setups can be done in weeks. FDI projects with licensing may span 6–12+ weeks, depending on sector and completeness.

4) Can a liaison office issue invoices in Nepal?
No. A liaison office cannot trade or invoice. Choose a private limited or branch if you need billing and revenue.

5) How do I repatriate profits?
Complete audits, obtain tax clearance, and provide bank compliance documents. Dividends and service fees can be remitted per rules.