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.
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).
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.
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.
| 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. |
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.
Here is the general roadmap:
Foreign Investment Approval – Apply to DOI or IBN with a project report and investor documents.
Company Name Reservation – Reserve your name through the Office of Company Registrar.
Incorporation – Submit forms, Memorandum & Articles of Association, and approval letter.
Tax Registration – Obtain a Permanent Account Number (PAN).
Local Body Registration – Register with the local municipality or ward office.
Industry Registration – Required for manufacturing or certain services.
Fund Infusion – Transfer FDI funds into a Nepalese bank and register with Nepal Rastra Bank.
Final Filings – Submit records and meet sector-specific approvals.
Timeline: 2–3 months overall (1–2 weeks for incorporation after approvals).
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).
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.
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.
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.