Company incorporation Nepal is no longer limited to local entrepreneurs. Over the past decade, Nepal has actively opened its economy to foreign investors, startups, and multinational companies. Today, foreigners can legally incorporate a company in Nepal, provided they follow the correct foreign investment framework.
If you are a foreign company or individual exploring South Asia for expansion, Nepal offers a compelling mix of cost efficiency, a young workforce, and growing digital and service sectors. This guide explains whether foreigners can incorporate a company in Nepal, the laws that apply, and the exact process to follow, written from a legal, tax, and compliance perspective.
This article is designed to be the most authoritative resource on company incorporation Nepal for foreign investors.
Yes. Foreigners can incorporate a company in Nepal, but only under the Foreign Direct Investment (FDI) framework.
Foreign ownership is regulated. You cannot incorporate a company in Nepal as a foreigner under the same rules as a Nepali citizen. Instead, you must comply with Nepal’s foreign investment laws, approvals, and sector restrictions.
Foreigners may incorporate:
• A 100% foreign-owned company, or
• A joint venture with Nepali shareholders,
subject to FDI approval and sector eligibility.
Foreign company incorporation in Nepal is governed by multiple overlapping laws. Understanding them is essential for compliance and risk management.
Foreign Investment and Technology Transfer Act (FITTA) 2019
Governs foreign ownership, capital thresholds, approvals, and repatriation rights.
Companies Act 2006
Regulates incorporation, governance, directors, and shareholder obligations.
Industrial Enterprises Act 2020
Classifies industries and determines which sectors are open to FDI.
Income Tax Act 2002
Governs corporate tax, withholding tax, and profit repatriation tax.
Nepal Rastra Bank (NRB) Directives
Regulate foreign currency inflow, share capital remittance, and dividends.
These laws collectively define how company incorporation Nepal works for foreign investors.
Foreign eligibility is broad, but not unlimited.
• Foreign individuals
• Foreign companies or corporations
• Foreign investment funds
• Overseas Nepali citizens (NRNs)
As per FITTA 2019:
• Minimum FDI amount: NPR 20 million (approx. USD 150,000) per investor
• This amount must be injected as share capital or approved investment
Not all industries allow foreign ownership.
• IT and software development
• Business process outsourcing (BPO)
• Consulting and professional services
• Manufacturing and light industry
• Tourism and hospitality
• Renewable energy
• Education and training services
• Small retail trading
• Local personal services
• Certain media and cultural industries
• Cottage industries reserved for locals
Always verify sector eligibility before starting company incorporation in Nepal.
This is the preferred structure for foreign investors.
Key features:
• Limited liability
• 1–101 shareholders
• Suitable for FDI and joint ventures
• Flexible governance
Used for large-scale projects and capital markets.
Less common for initial foreign entry.
A branch is not a separate legal entity. It is allowed only for:
• Short-term projects
• Infrastructure and donor-funded work
Foreigners seeking long-term operations usually choose incorporation, not branches.
This section explains the actual process foreign investors follow.
Confirm:
• Sector is open to FDI
• Investment meets minimum threshold
• Business activity aligns with Nepal law
Submit an FDI proposal to:
• Department of Industry (DOI), or
• Investment Board Nepal (IBN) for large projects
Documents include:
• Business plan
• Investor profile
• Passport or corporate documents
• Shareholding structure
Once FDI approval is granted:
• Register the company at the Office of Company Registrar
• Reserve company name
• Submit Memorandum and Articles of Association
• PAN and VAT registration
• Local ward registration
• Industry registration certificate
• Open a foreign investment bank account
• Remit share capital through approved banking channels
• NRB approval for capital verification
• Employment contracts
• Social Security Fund registration
• Annual filings and audits
This structured process ensures lawful company incorporation in Nepal.
| Stage | Estimated Time |
|---|---|
| FDI approval | 15–30 days |
| Company registration | 5–7 days |
| Tax and local registrations | 5–10 days |
| NRB capital verification | 7–14 days |
Total estimated timeline: 30–60 days
Costs vary by investment size and complexity.
• Government registration fees
• Legal and advisory fees
• Notarization and translation
• Capital remittance costs
| Cost Category | Estimated Range |
|---|---|
| Government fees | NPR 25,000–50,000 |
| Legal & compliance | NPR 150,000–400,000 |
| Bank & NRB processing | Variable |
| Minimum capital | NPR 20 million |
Costs should always be evaluated against long-term compliance savings.
Foreigners often ask about control and governance.
• 100% foreign ownership allowed in eligible sectors
• Joint ventures permitted
• At least one director required
• Foreign directors allowed
• No mandatory Nepali director under company law
• Work visas required for foreign staff
• Local hiring encouraged for operations
• Standard corporate tax: 25%
• Certain industries receive concessions
• Dividends: 5%
• Service payments: varies
FITTA 2019 guarantees:
• Repatriation of dividends
• Repatriation of capital on exit
• Repatriation of royalties and fees
Subject to NRB approval and tax clearance.
After incorporation, compliance is ongoing.
• Financial audit
• Annual return filing
• Tax returns
• SSF and labor compliance
Failure to comply can lead to penalties or restrictions on repatriation.
Foreign investors choose Nepal for strategic reasons.
• Competitive operating costs
• English-speaking workforce
• Growing IT and services sector
• Access to South Asian markets
• Legal guarantees under FITTA
For service-based companies, Nepal offers strong ROI.
Avoid these pitfalls:
• Choosing a restricted sector
• Underestimating compliance costs
• Improper capital remittance
• Poor structuring of shareholder agreements
Expert guidance significantly reduces risk.
Some foreign companies test the market before incorporation.
| Model | Best For | Key Limitation |
|---|---|---|
| EOR | Hiring quickly | No local entity |
| Incorporation | Long-term presence | Higher setup cost |
Many companies start with EOR, then transition to incorporation.
Yes. Foreigners can own 100% of a company in Nepal if the sector is open to foreign investment and FDI approval is obtained under FITTA 2019.
The minimum foreign investment is NPR 20 million per investor, as required by FITTA 2019.
Typically 30 to 60 days, depending on FDI approval, documentation readiness, and banking processes.
Yes. FITTA 2019 guarantees repatriation of dividends, capital, and approved payments after tax clearance and NRB approval.
No. A Nepali partner is not mandatory unless the sector specifically requires local participation.
Company incorporation Nepal is fully accessible to foreign investors who follow the FDI framework. With the right structure, sector selection, and compliance support, Nepal offers a stable and cost-effective destination for regional expansion.
Foreigners who approach incorporation strategically can enjoy full ownership, profit repatriation, and long-term operational control.
If you are planning company incorporation in Nepal and want a clear legal, tax, and compliance roadmap, speak with our specialists.
👉 Book a free consultation to assess your eligibility, sector approval, and incorporation timeline.