For many foreign investors, expanding into Nepal feels like a maze of paperwork and approvals. Questions like “What documents do I need?” or “Which authority should I contact first?” often delay the process.
Understanding the exact requirements, forms, and compliance procedures for company formation in Nepal can save weeks of confusion.
This guide breaks it all down clearly. You will learn about the types of companies allowed, key legal documents required, approvals under FITTA 2019, and how to stay compliant after incorporation.
Starting a business in Nepal is not just about registration, it’s about meeting every requirement set by the country’s financial, labour, and tax laws.
Proper compliance ensures:
Legal protection and limited liability for shareholders.
Smooth repatriation of profits under Nepal Rastra Bank (NRB) directives.
Eligibility for investment incentives under the Industrial Enterprises Act 2020.
Easier access to foreign exchange, credit, and tax refunds.
Failure to comply can result in penalties, suspension, or even cancellation of registration under Companies Act 2006 (Section 135).
Every company in Nepal operates within a structured legal framework:
| Area | Applicable Law / Authority |
|---|---|
| Company Incorporation | Companies Act 2006 & Rules 2064 |
| Foreign Investment | FITTA 2019 |
| Capital Inflow & Repatriation | NRB Directives |
| Industry Licensing | Department of Industry (DOI) / Investment Board Nepal (IBN) |
| Tax Registration | Income Tax Act 2002 / VAT Act 1996 |
| Labour & Social Security | Labour Act 2017 / Social Security Act 2018 |
| Audit & Reporting | Companies Act 2006 / Tax Administration Act |
| Work Permits (Foreign Staff) | Immigration and Labour Rules |
| Requirement | Local Company | Foreign-Invested Company (FDI) |
|---|---|---|
| Shareholders | Minimum 2 | Minimum 2 (can include foreign individuals or entities) |
| Directors | At least 1 | At least 1 local or foreign director |
| Company Secretary | Mandatory for public companies | Optional for private companies |
| Registered Office | Must have a local address | Must have a local address with lease documentation |
| Minimum Capital | No minimum | USD 20,000 per investor (FITTA 2019, Section 3) |
Every company must prepare and submit a precise set of forms and documents:
1. Application Form for Incorporation
Available through the Office of the Company Registrar (OCR) online portal.
2. Memorandum of Association (MOA)
Defines your company’s name, objectives, capital, and registered address.
3. Articles of Association (AOA)
Details internal governance—board structure, meetings, dividend distribution, and voting rights.
4. Power of Attorney (POA)
Authorizes a local representative to act on behalf of foreign promoters.
5. Identification Documents
Passport copies of foreign directors and shareholders.
6. Lease Agreement
Proof of physical office address registered with IRD.
7. NRB Inflow Documents (For FDI)
Foreign capital must be transferred via convertible foreign currency and verified by NRB.
Foreign investors often underestimate how many official forms are involved. Here are the key ones you will need:
| Form Name | Purpose | Submitted To |
|---|---|---|
| Form 1: Name Reservation Request | Reserve proposed company name | OCR |
| Form 2: Company Incorporation Application | Official company registration request | OCR |
| Form 3: Details of Shareholders and Directors | Declare ownership and control | OCR |
| Form 4: FDI Application Form | Seek DOI/IBN approval under FITTA 2019 | DOI / IBN |
| Form 5: NRB Capital Inflow Form | Verify capital remittance in foreign currency | NRB |
| Form 6: PAN and VAT Application | Tax registration | IRD |
| Form 7: Labour and SSF Registration | Employee social security compliance | Labour Office / SSF |
Each form has to be filled with precision, errors can lead to rejection or resubmission delays.
Below is the full procedural roadmap for company formation in Nepal.
Ensure your company name is unique, relevant, and ends with “Private Limited” or “Limited.”
(Ref: Companies Act 2006, Section 9)
Define company structure, shareholding pattern, and objectives. Include capital structure clearly.
Submit the digital application along with notarized MOA, AOA, and identification documents.
Foreign investors must submit Form 4 to DOI or IBN depending on the investment amount.
Up to NPR 6 billion → DOI
Above NPR 6 billion → IBN
(Ref: FITTA 2019, Section 3)
Transfer capital in convertible foreign currency. NRB verifies and issues a Capital Inflow Confirmation Letter.
Register at Inland Revenue Department (IRD) for taxation purposes under the Income Tax Act 2002 and VAT Act 1996.
Comply with the Labour Act 2017 by registering employment contracts and SSF accounts under Social Security Act 2018.
Submit annual return to OCR and maintain accounting records as per Nepal Financial Reporting Standards (NFRS).
| Aspect | Private Limited | Public Limited | Branch Office (Foreign) |
|---|---|---|---|
| Minimum Shareholders | 2 | 7 | 1 parent entity |
| FDI Approval | Required if foreign shareholding | Required | Required |
| Audit Requirement | Annual | Mandatory | Mandatory |
| Reporting | Moderate | Extensive | Annual report to DOI |
| Setup Timeline | 15–20 days | 20–30 days | 30+ days |
Private Limited Companies are most common for foreign investors due to their flexibility and simpler compliance load.
Once your company is formed, maintaining compliance is an ongoing responsibility.
| Obligation | Governing Law | Frequency |
|---|---|---|
| Annual Financial Statement Submission | Companies Act 2006 | Yearly |
| Annual Tax Return | Income Tax Act 2002 | Yearly |
| VAT Return | VAT Act 1996 | Monthly |
| SSF Contribution | Social Security Act 2018 | Monthly |
| Employee Bonus Payment | Bonus Act 1974 | Yearly |
| Audit Report Submission | Companies Act 2006, Section 80 | Yearly |
Late Filing Penalty: OCR may impose fines up to NPR 10,000.
Tax Default Penalty: IRD can charge interest and late fees for unpaid taxes.
SSF Default: Employers can face a 5% penalty on unpaid contributions.
Audit Non-Submission: Companies may face suspension from future filings.
Builds credibility with banks, investors, and regulators.
Simplifies profit repatriation under NRB guidelines.
Reduces audit risk and tax penalties.
Facilitates visa and work permit approvals for foreign staff.
Enhances valuation during mergers or fundraising.
Staying compliant is not an expense, it’s a business investment.
Since 2021, Nepal has digitized many registration and filing systems:
OCR e-filing: Name reservation, incorporation, and return filing.
IRD eTax Portal: PAN, VAT, and TDS submissions online.
SSF Portal: Digital submission of employee contributions.
NRB FDI Portal: Streamlined capital inflow verification.
These changes make Nepal one of South Asia’s more efficient jurisdictions for mid-size businesses.
1. What are the main requirements for company formation in Nepal?
At least two shareholders, a local office address, and notarized MOA and AOA under the Companies Act 2006.
2. What forms are needed for foreign investment approval?
Form 4 for DOI or IBN under FITTA 2019, plus NRB inflow verification form.
3. How long does company formation take in Nepal?
Local companies: 5–7 days; FDI companies: 15–30 days depending on DOI and NRB approvals.
4. What are the key compliance obligations after registration?
Annual audit, tax filings, SSF registration, and yearly return submission to OCR.
5. Can a foreigner own 100% of a Nepalese company?
Yes, except in restricted sectors listed under FITTA 2019 Schedule.
Company formation in Nepal is straightforward when managed by professionals who understand the legal and regulatory landscape.
Digital Consulting Ventures (DCV) helps foreign companies navigate every stage, from OCR registration to FDI approval and ongoing compliance.
Our in-house legal, tax, and accounting experts ensure full compliance with Companies Act 2006, FITTA 2019, and NRB Directives, saving you time and cost.
Book a consultation today to get a tailored roadmap and all necessary forms to register and manage your company in Nepal seamlessly.