Company Incorporation Cost in Nepal: Breakdown of Fees & Charges

Understanding the company incorporation cost in Nepal is one of the first and most important questions foreign investors ask. While Nepal is known for its affordable labour market and growing digital economy, incorporation costs vary widely depending on your structure, capital, and compliance needs.

This guide offers the most comprehensive, transparent, and up-to-date breakdown of company incorporation Nepal costs. It is written specifically for foreign companies planning market entry, FDI, or long-term operations. By the end, you will know exactly what to budget, what is mandatory, and what costs are often overlooked.

What Determines Company Incorporation Cost in Nepal?

Company incorporation in Nepal is not a flat-fee process. Costs depend on several variables defined under the Companies Act, 2006, FITTA 2019, and related regulations.

Key cost drivers include:

• Ownership structure (foreign-owned or local)

• Type of entity registered

• Authorised capital

• Sector-specific approvals

• Compliance and post-registration needs

Foreign companies should budget not only for registration but also for legal, tax, and operational compliance.

Types of Business Entities and Their Cost Impact

Private Limited Company (Most Common)

This is the preferred structure for foreign investors.

Why it matters for cost:
Private limited companies require higher compliance, capital disclosure, and approvals.

Branch Office

A branch is not a separate legal entity.

Cost impact:
Lower incorporation fees, but higher regulatory scrutiny and limited scope.

Liaison Office

Used for market research only.

Cost impact:
Lower setup cost but no revenue generation allowed.

Government Fees for Company Incorporation in Nepal

Government fees are paid mainly to the Office of the Company Registrar (OCR).

Company Registration Fee (Based on Authorised Capital)

This fee structure is prescribed under the Companies Act, 2006.

Foreign Investment Approval Costs (FDI-Specific)

Foreign companies must obtain approval under the Foreign Investment and Technology Transfer Act (FITTA) 2019.

One-Time Government Costs

• FDI approval application: Minimal government fee

• Sector ministry approval (if applicable)

• Nepal Rastra Bank (NRB) reporting

While government fees are modest, professional handling is essential to avoid rejection.

Legal and Professional Fees (Major Cost Component)

Legal and advisory fees often exceed government fees.

Typical professional services include:

• Company name reservation

• MOA and AOA drafting

• FDI application preparation

• OCR registration filing

• NRB compliance

• PAN and VAT registration

Estimated range:
NPR 150,000 to NPR 400,000 depending on complexity.

Capital Requirements and Their Cost Implications

Nepal does not mandate a fixed minimum capital for all sectors. However, FDI projects generally require a minimum investment threshold, often interpreted at NPR 20 million depending on sectoral guidelines.

Capital-related costs include:

• Bank account opening

• Capital remittance charges

• Currency conversion losses

• Audit verification of capital inflow

Tax Registration and Compliance Costs

After incorporation, companies must register with the Inland Revenue Department (IRD).

Mandatory registrations:

• Permanent Account Number (PAN)

• VAT (if applicable)

• Withholding tax setup

These registrations are low-cost but require accurate documentation.

Labour, Payroll, and Social Security Costs

Foreign companies often underestimate post-incorporation HR costs.

Mandatory employer obligations:

• Social Security Fund (SSF) registration

• Employer contribution: 20%

• Employee contribution: 11%

• Payroll compliance filings

These costs begin immediately after hiring employees.

Hidden and Often Overlooked Costs

Foreign investors frequently overlook these expenses.

Common hidden costs include:

• Notary and translation fees

• Stamp duties

• Digital signature certificates

• Annual compliance filings

• Accounting and audit retainers

• Visa and work permit processing

Total Cost Comparison: What Should Foreign Companies Budget?

Estimated Cost Ranges (Private Limited Company)

Total estimated first-year cost:
NPR 320,000 to NPR 900,000+

Step-by-Step Cost Timeline for Company Incorporation in Nepal

1. Name reservation and document preparation

2. Government registration fee payment

3. FDI approval submission

4. OCR incorporation certificate issuance

5. PAN and tax registration

6. Bank account and capital remittance

7. Labour and SSF compliance

Each step has direct or indirect cost implications.

Cost vs Value: Why Cheapest Is Not Always Best

Low-cost incorporation often results in:

• Incorrect shareholding structures

• FDI rejection

• Delayed capital repatriation

• Tax penalties

• Labour compliance risks

Professional structuring saves long-term cost and legal exposure.

How Long Does Incorporation Take Relative to Cost?

Time and cost are directly related.

• Standard incorporation: 2–4 weeks

• FDI-backed incorporation: 4–8 weeks

• Fast-tracked filings: Higher professional fees

Compliance Costs After Incorporation

Company incorporation Nepal costs do not end at registration.

Ongoing annual costs include:

• Annual return filing

• Financial audit

• Tax returns

• SSF filings

• Board resolutions

• Regulatory renewals

Budgeting for compliance avoids regulatory shutdowns.

Why Nepal Remains Cost-Effective for Foreign Companies

Despite compliance requirements, Nepal offers:

• Low labour costs

• Affordable professional services

• Strategic South Asia access

• Investor protections under FITTA 2019

When structured correctly, Nepal offers strong ROI.

Frequently Asked Questions (People Also Ask)

How much does company incorporation cost in Nepal for foreigners?

Foreigners should budget NPR 320,000 to NPR 900,000 depending on structure, capital, and compliance needs.

Is there a minimum capital requirement for foreign companies?

There is no universal minimum, but FDI projects often require higher capital thresholds based on sector.

Are government fees the biggest cost?

No. Professional, compliance, and post-registration costs usually exceed government fees.

Can foreigners incorporate a company without visiting Nepal?

Yes. Incorporation can be completed remotely using Power of Attorney.

Is incorporation cost refundable if FDI is rejected?

Government fees are non-refundable. Professional fees depend on service terms.

Conclusion

The company incorporation cost in Nepal is affordable, but only when approached with clarity and compliance. Foreign companies that understand the full cost landscape avoid delays, penalties, and restructuring expenses.

A properly structured incorporation is not a cost. It is an investment in stability, compliance, and long-term growth.