Foreign company registration in Nepal is governed primarily by the Company Act Nepal, supported by foreign investment and sector-specific laws. For global companies, Nepal offers cost-effective talent, strategic access to South Asia, and an increasingly investor-friendly regulatory framework.
Yet, compliance matters. Choosing the wrong entry structure or misunderstanding statutory obligations can delay approvals, restrict operations, or expose directors to legal risk.
This guide explains foreign company registration in Nepal through the lens of the Company Act Nepal, while integrating practical insights from foreign investment regulations, tax law, and labour compliance. It is written for founders, general counsel, and expansion leaders seeking clarity, not jargon.
The backbone of corporate law in Nepal is the Company Act 2006. It regulates:
Incorporation and registration
Corporate governance
Director and shareholder obligations
Reporting and disclosure
Winding-up and exit
For foreign businesses, the Act works alongside:
Foreign Investment and Technology Transfer Act 2019
Department of Industry
Office of Company Registrar
Together, these laws define how a foreign company may legally operate in Nepal.
Under the Company Act Nepal, a foreign company includes:
Companies incorporated outside Nepal
Entities with majority foreign ownership
Overseas companies establishing a Nepal presence
A foreign company cannot operate commercially in Nepal unless registered under an approved structure.
Foreign investors may enter Nepal using one of four legally recognised routes.
A liaison office is a non-commercial presence.
Permitted activities
Market research
Brand representation
Coordination with head office
Restrictions
No revenue generation
No local contracts
This is suitable for early-stage market testing only.
A branch office allows limited commercial activity linked to the parent company.
Key features
No separate legal personality
Parent company bears full liability
Must register under the Company Act Nepal
Branch offices are common in infrastructure, consulting, and donor-funded projects.
This is the most flexible and scalable structure.
Advantages
Separate legal entity
Eligible for full commercial operations
Clear exit and repatriation mechanisms
Most long-term investors choose this route.
Foreign and Nepali partners may form a joint venture.
Best for
Regulated sectors
Local market access
Government-linked projects
Ownership ratios depend on sector caps.
| Structure | Legal Entity | Revenue Allowed | Liability | Best Use Case |
|---|---|---|---|---|
| Liaison Office | No | No | Parent company | Market research |
| Branch Office | No | Limited | Parent company | Project-based work |
| Private Limited | Yes | Yes | Limited | Long-term operations |
| Joint Venture | Yes | Yes | Limited | Regulated sectors |
Foreign company registration in Nepal follows a predictable but document-heavy process.
Applications are submitted to the Department of Industry under FITTA.
Required details include:
Shareholding structure
Business objectives
Capital commitment
Once approved, the entity is registered with the Office of Company Registrar.
Documents include:
Memorandum of Association
Articles of Association
Parent company resolutions
After incorporation, the company must register with:
Inland Revenue Department
Local ward office
Sector regulators if applicable
Foreign capital must be remitted through approved banking channels and reported to Nepal Rastra Bank.
A typical checklist includes:
Certificate of incorporation of parent company
Board resolution approving Nepal entry
Passport copies of directors
Power of attorney
Approved investment application
All foreign documents must be notarised and apostilled.
The minimum foreign investment threshold is typically NPR 20 million, subject to sectoral rules.
Capital must be:
Injected through formal banking channels
Reported within statutory timelines
Failure to comply can suspend operating licenses.
Foreign companies registered in Nepal must comply with:
Annual returns under the Company Act Nepal
Tax filings and audits
Labour law compliance
Social Security Fund contributions
Non-compliance may result in penalties or deregistration.
Avoid these frequent issues:
Choosing a liaison office for revenue activities
Delayed capital injection
Ignoring labour law obligations
Weak shareholder agreements
Proper structuring at entry prevents costly restructuring later.
The Company Act Nepal determines:
Director liabilities
Share transfer rules
Dividend distribution
Exit and liquidation
Understanding it is essential for risk management and investor confidence.
Foreign businesses that succeed in Nepal typically:
Choose the correct entity from day one
Align FITTA approvals with company objects
Maintain clean compliance records
Use local advisors familiar with regulators
Yes. Most sectors allow 100 percent foreign ownership, subject to negative lists and sector caps.
Typically 4 to 8 weeks, depending on approvals and document readiness.
Yes. Branch offices must register and comply with reporting provisions.
Yes. Repatriation is permitted after tax compliance and regulatory reporting.
Yes. Nepal labour laws apply once employees are hired locally.
Foreign company registration in Nepal under the Company Act Nepal is a structured, transparent process when handled correctly. The law provides flexibility, but only for investors who respect compliance, governance, and reporting standards.
Choosing the right entry model and aligning approvals with long-term strategy is the difference between smooth expansion and regulatory friction.
If you are planning foreign company registration in Nepal, speak with specialists who combine legal precision with commercial insight. Book a consultation to receive a tailored entry strategy, compliance roadmap, and risk assessment.