Can Foreigners Register a Private Limited Company in Nepal

You’ve decided to expand into Nepal. Maybe you’re attracted by its low operational costs, growing talent pool, or untapped regional potential between India and China. You’ve found your local partner, explored the market, and now comes the real question: Can foreigners register a Private Limited Company in Nepal?

If you’ve already searched online, you probably found contradictory answers. Some sources say “yes, 100% foreign ownership is possible.” Others warn about “restrictions, approvals, and endless paperwork.” The truth lies in between, foreigners can absolutely register a Private Limited Company in Nepal, but you must follow the proper legal process under the Foreign Investment and Technology Transfer Act (FITTA) 2019 and the Companies Act 2006.

This guide will help you cut through the noise. It explains what foreign ownership really means in Nepal, which authorities approve it, how much capital is required, and what steps you need to follow, from investment approval to final incorporation.

Understanding Foreign Investment in Nepal

Nepal welcomes foreign investors under a structured framework designed to balance opportunity with national regulation. The country’s investment environment is governed mainly by:

• FITTA 2019 (Foreign Investment and Technology Transfer Act)

• Companies Act 2006

• Foreign Exchange Regulation Act 1962

• Industrial Enterprise Act 2020

Together, these laws allow foreign companies and individuals to invest directly by registering a Private Limited Company or forming a Joint Venture (JV) with local partners.

However, the investment must be approved by government authorities before registration. The key bodies include:

1. Department of Industry (DOI) for investments below NPR 6 billion.

2. Investment Board of Nepal (IBN) for larger projects above NPR 6 billion or of national significance.

3. Nepal Rastra Bank (NRB) for recording foreign capital inflow.

Can a Foreigner Fully Own a Company in Nepal

Yes. A foreigner can own up to 100 percent of a Private Limited Company in most sectors open to foreign investment. However, certain industries remain restricted under Nepal’s Negative List, such as:

• Cottage industries and small-scale crafts

• Personal retail trading

• Real estate brokerage

• Arms, defense, and tobacco manufacturing

• Some agricultural activities

For all other industries, IT, outsourcing, manufacturing, education, tourism, hydropower, and professional services, full foreign ownership is legally permitted.

Legal Process for Private Limited Company Registration in Nepal for Foreigners

Registering a Private Limited Company in Nepal as a foreigner involves a few additional steps compared to local investors. The process ensures your investment complies with FDI regulations.

Step 1: Prepare Your Investment Proposal

Foreign investors must first prepare an investment proposal outlining:

• Nature of the business

• Proposed capital investment

• Shareholding ratio (foreign vs local, if any)

• Source of funds

• Business objectives and projected employment

This proposal is submitted to the Department of Industry (DOI) or the Investment Board of Nepal (IBN), depending on the investment size.

Step 2: Obtain FDI Approval

Once your proposal is submitted, the respective authority reviews your documents. If approved, you will receive an FDI Approval Letter that legally authorizes your investment in Nepal.

Typical documents required include:

• Application form for FDI approval

• Memorandum and Articles of Association

• Certificate of incorporation of the parent company (if applicable)

• Board Resolution approving the investment

• Passport copies of shareholders

• Power of Attorney appointing a local representative

Step 3: Name Reservation through OCR Portal

The Office of the Company Registrar (OCR) operates an online portal where you can reserve your company name. The name should:

• End with “Private Limited”

• Reflect your business purpose

• Be unique and not conflict with existing names

OCR usually approves the name within two to three working days.

Step 4: Incorporation and Document Submission

After obtaining FDI approval and reserving your name, the next step is to submit incorporation documents through the OCR portal.

You must upload:

• Memorandum of Association (MoA) and Articles of Association (AoA)

• Proof of registered office in Nepal (lease agreement or ownership papers)

• Passport and photo of shareholders and directors

• Power of Attorney authorizing a local signatory

• Copy of FDI Approval Letter

Once approved, the OCR issues your Certificate of Incorporation, marking your company’s official legal status in Nepal.

Step 5: Post-Registration Compliance

After registration, the following compliance steps are mandatory:

Completing these ensures your company can operate and repatriate profits lawfully.

Minimum Investment Requirement for Foreigners

Nepal’s minimum threshold for foreign investment is NPR 20 million (approximately USD 150,000). This amount can include equity, machinery, or technology transfer value.

Investments below this threshold are not accepted as FDI. However, joint ventures with local partners can sometimes meet this requirement collectively if structured properly.

Repatriation of Profits and Dividends

One of the most common questions foreign investors ask is whether they can repatriate profits from Nepal. The answer is yes, but only after fulfilling tax and compliance obligations.

You can repatriate:

• Dividends from profits

• Sale proceeds of shares

• Loan principal and interest

• Royalties, franchise, or technology transfer fees

To do this, the company must provide audited financial statements, tax clearance certificates, and NRB approval for each transfer.

Challenges Foreign Investors Often Face

While Nepal is welcoming to foreign investment, some practical challenges remain:

1. Regulatory overlap: Different authorities often require repetitive documentation.

2. Inconsistent interpretations: Local officers may interpret FDI rules differently.

3. Translation issues: English-to-Nepali document translation errors can delay approvals.

4. Limited digital integration: Though OCR and DOI are online, manual verification still occurs.

5. Timeline unpredictability: Approval times vary by industry and region.

Working with a local expert helps navigate these challenges smoothly.

Strategic Advantages of Registering in Nepal

Foreign companies register in Nepal not just for low costs but for strategic growth. Key advantages include:

• Access to a skilled workforce at competitive salaries

• Gateway to South Asia with proximity to India and China

• Liberal FDI regime in services, manufacturing, and IT

• Tax incentives for priority industries like hydropower and tourism

• Strong double taxation treaties with major countries

These advantages position Nepal as a smart base for outsourcing, regional operations, or export-oriented businesses.

10-Step Checklist for Foreign Company Registration in Nepal

1. Confirm business eligibility under FITTA.

2. Prepare investment proposal and financial plan.

3. Submit proposal to DOI or IBN.

4. Obtain FDI approval letter.

5. Reserve the company name through the OCR portal.

6. Draft and translate the MoA and AoA.

7. File incorporation documents with OCR.

8. Obtain PAN and VAT registrations.

9. Record capital inflow with NRB.

10. Register with SSF if hiring local employees.

FAQ — People Also Ask

1. Can a foreigner fully own a company in Nepal?
Yes. Foreigners can own 100 percent of a Private Limited Company in most sectors except those restricted by the government.

2. What is the minimum capital for foreign investment in Nepal?
The minimum investment threshold is NPR 20 million, which can include cash, machinery, or technology value.

3. How long does it take for foreigners to register a company in Nepal?
The process typically takes 3 to 5 weeks, depending on the speed of FDI approval and document verification.

4. Can foreign companies repatriate profits from Nepal?
Yes, after paying applicable taxes and securing approval from Nepal Rastra Bank, profits and dividends can be legally repatriated.

5. Do foreigners need a local partner or director?
No, but appointing a local authorized representative is highly recommended for compliance and communication purposes.

Starting a business in a new country is both exciting and daunting. Understanding how foreigners can register a Private Limited Company in Nepal is just the first step. The real challenge lies in navigating complex approvals, legal translations, and compliance across multiple authorities.

That’s where Digital Consulting Ventures (DCV) comes in. We act as your end-to-end partner, from investment approval and OCR registration to tax setup, payroll, and HR compliance. Our team works closely with regulators to ensure your company is established correctly, quickly, and transparently.

Ready to expand confidently into Nepal?
Book your free consultation with DCV today and turn your investment vision into a fully registered, compliant business in Nepal.