--- title: Top 7 Things to Know Before Registering a Business in Nepal description: Expert guide for foreign companies on business registration in Nepal. 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[Nepal Accounting](https://digitalconsultingventures.com/insights/tag/nepal-accounting) # Top 7 Things to Know Before Registering a Business in Nepal [![Vijay Shrestha](https://digitalconsultingventures.com/hs-fs/hubfs/s%20(2)-1.png?width=48&height=48&name=s%20(2)-1.png)](https://digitalconsultingventures.com/insights/author/vijay-shrestha) [Vijay Shrestha](https://digitalconsultingventures.com/insights/author/vijay-shrestha) Sep 10, 2025 9:41:31 AM 3 min read ![Nepal company incorporation process infographic showing 7 key steps](https://digitalconsultingventures.com/hubfs/Untitled%20design%20%282%29-1.jpg) Starting a company in Nepal offers a fast-growing market but also involves unique rules. **Business registration in Nepal** is governed by the Company Act and the Foreign Investment and Technology Transfer Act (FITTA). Foreign investors must comply with investment rules, secure approvals, and meet capital thresholds. This guide – written for foreign companies – covers the top 7 things to know, from choosing an entity type to understanding the approval process and compliance requirements. --- ## 1. Foreign Investment Regulations and Approvals Nepal uses a *negative list* approach: most industries are open to foreign investment, but a few are prohibited or capped. Under FITTA, foreign investors must first obtain investment approval from the Department of Industry (for projects below a certain value) or the Investment Board Nepal (for larger projects). A refundable security fee is required at approval. The minimum investment for foreign direct investment (FDI) approval is **NPR 20 million** (about USD 155,000). ### Industry Restrictions (Negative List) - **Primary agriculture:** Activities like poultry, fish, and dairy farming are prohibited. - **Cottage and small industries:** Traditional small-scale industries are reserved for local investors. - **Personal services:** Sectors such as beauty parlors, barber shops, and driving schools are restricted to Nepalese owners. - **Arms & ammunition:** Manufacturing of guns, explosives, and related products is closed to foreign investors. - **Real estate trading:** Only construction is allowed; pure real estate resale or brokerage is banned. - **Consulting services:** Foreigners can own up to 51% in management, engineering, or legal consulting firms. --- ## 2. Choosing the Right Business Structure Foreign investors can enter Nepal through different entities. The most common are: - **Private Limited Company (Subsidiary):** Requires at least one shareholder and minimum paid-up capital of NPR 100,000. Foreigners can own up to 100% in most sectors. - **Branch Office:** An extension of your existing company. Can conduct business similar to its parent company. Not a separate legal entity; profits are repatriated. - **Liaison Office:** A non-revenue office for market research or liaison. Cannot carry out commercial transactions or earn income. ### Comparison Table | **Business Structure** | **Foreign Equity Allowed** | **Minimum Capital** | **Main Activities** | **Key Considerations** | | --- | --- | --- | --- | --- | | Private Limited Company | Up to 100% | NPR 100,000 | Full business operations and revenue | Requires incorporation; subject to taxes. | | Branch Office | 100% | NPR 500k–2M deposit | Same as parent company | Annual audits; NRB filings required. | | Liaison Office | 100% | NPR 500k–1M | Market research, coordination | Cannot earn income; easier setup. | --- ## 3. Minimum Capital & Investment Thresholds Domestic company incorporation requires modest capital (NPR 100k for a private company). Foreign investors face higher thresholds. FITTA sets a **minimum FDI of NPR 20 million** (~USD 155k). In practice: - You must show proof of funds and a financial plan. - Certain sectors (like banking or hydropower) may have additional capital requirements. - Deposits (typically NPR 500k–2M) may be required when opening a branch. --- ## 4. Step-by-Step Registration Process Here is the general roadmap: 1. **Foreign Investment Approval** – Apply to DOI or IBN with a project report and investor documents. 2. **Company Name Reservation** – Reserve your name through the Office of Company Registrar. 3. **Incorporation** – Submit forms, Memorandum & Articles of Association, and approval letter. 4. **Tax Registration** – Obtain a Permanent Account Number (PAN). 5. **Local Body Registration** – Register with the local municipality or ward office. 6. **Industry Registration** – Required for manufacturing or certain services. 7. **Fund Infusion** – Transfer FDI funds into a Nepalese bank and register with Nepal Rastra Bank. 8. **Final Filings** – Submit records and meet sector-specific approvals. **Timeline:** 2–3 months overall (1–2 weeks for incorporation after approvals). --- ## 5. Required Documents, Fees, and Timeline Typical required documents include: - Parent company incorporation certificate (translated and notarized) - Board Resolution authorizing the Nepal office - Details of directors and local representative - Proof of office address in Nepal - Financial plan and bank credibility certificate **Fees:** - Domestic incorporation: NPR 1,000–9,500 (depending on capital). - Branch: NPR 15,000–160,000 (based on investment). - Additional stamp duties and small publication costs. **Timeline:** - Domestic company: 5–10 working days. - Foreign investors: 2–3 months (including FDI approvals). --- ## 6. Compliance and Ongoing Obligations After registration, ongoing requirements include: - Filing audited financial statements annually. - Filing income tax returns by mid-October each year. - Paying monthly VAT by the 25th (if applicable). - Holding an annual general meeting. - Branches must submit the parent company’s balance sheet annually. - Liaison offices must file yearly activity reports. For profit repatriation, approval from Nepal Rastra Bank is mandatory. --- ## 7. Working with Local Experts Nepal’s regulatory environment can be complex. A local lawyer or consultant can: - Handle name reservation, MOA/AOA drafting, and filings. - Liaise with authorities in Nepali language. - Ensure compliance with deadlines. - Provide local representation and credibility. **Tip:** Ensure your business objectives in the Memorandum match the approved activities to avoid compliance issues.   --- ## FAQ **Q: Can foreign individuals register a company in Nepal?** A: Yes. Foreign investors can set up a private limited company or open a branch/liaison office. Investment approval is required first. **Q: What are the steps to register a company in Nepal?** A: Obtain foreign investment approval, reserve a name, incorporate at OCR, register for PAN, register with the local ward, get licenses, and finalize filings. **Q: How long does business registration in Nepal take?** A: About 5–10 working days for local companies. For foreign investors, expect 2–3 months due to FDI approvals. **Q: Is there a minimum investment required for foreigners?** A: Yes. The minimum foreign investment threshold is NPR 20 million (around USD 155,000). **Q: Which industries are closed or restricted for foreign investment?** A: Agriculture (poultry, dairy, fish farming), arms, small personal services, real estate trading, and some consulting services are restricted or capped. #### Don't forget to share this post! 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Sep 10, 2025 10:01:40 AM Vijay Shrestha [Nepal Accounting](https://digitalconsultingventures.com/insights/tag/nepal-accounting) ### Business registration in Nepal: total cost breakdown Sep 16, 2025 10:46:09 AM Pjay Shrestha ![Digital Consulting Ventures](https://digitalconsultingventures.com/hs-fs/hubfs/Digital%20Consulting%20(15).png?width=239&height=40&name=Digital%20Consulting%20(15).png) Digital Consulting Ventures helps rapidly scaling companies that have a demand for outsourced talent. 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