Company incorporation Nepal has become a strategic gateway for Non-Resident Nepalis (NRNs) and foreign nationals seeking access to South Asia’s emerging market. Nepal offers competitive labour costs, investment protections, and a steadily improving regulatory framework.
Yet incorporation rules differ sharply for foreigners and NRNs compared to local founders. Foreign investment thresholds, approvals, and compliance obligations apply from day one.
This definitive guide explains how company incorporation in Nepal works for NRNs and foreign nationals, what the law allows, and how to structure your entry correctly.
Nepal’s investment environment has evolved rapidly since the enactment of FITTA 2019.
Key macro drivers include:
Strategic access to India and China
Young, English-speaking workforce
Competitive operating costs
Government incentives for priority sectors
Guaranteed profit repatriation under law
According to Nepal Rastra Bank and the Department of Industry, foreign direct investment approvals have grown steadily year-on-year since 2020.
Foreign-owned company incorporation in Nepal is governed by multiple statutes. Understanding their interaction is critical.
Companies Act, 2006 – company formation and governance
Foreign Investment and Technology Transfer Act (FITTA), 2019
Industrial Enterprises Act, 2020
Income Tax Act, 2002
Labour Act, 2017
Social Security Act, 2018
Nepal Rastra Bank (NRB) Foreign Exchange Directives
These laws collectively define who can invest, how much, and under what conditions.
NRNs enjoy preferential treatment compared to other foreigners.
They may:
Own up to 100% equity in most sectors
Invest individually or jointly
Repatriate dividends, capital, and royalties
NRN status must be proven through an NRN ID card issued by the Government of Nepal.
Foreign nationals and overseas companies may incorporate subject to:
Minimum investment thresholds
Sectoral restrictions
Government approvals
Certain industries remain restricted or capped under the negative list published by the Government of Nepal.
Most common structure for company incorporation Nepal.
Features:
Separate legal entity
Limited liability
Suitable for long-term operations
Allows 100% foreign ownership in permitted sectors
Extension of a foreign parent company.
Best for:
Project-based work
Donor-funded contracts
Short to medium-term presence
Branches cannot engage in independent commercial trading.
Non-commercial presence only.
Permitted activities:
Market research
Relationship management
Promotion
Revenue generation is prohibited.
Under FITTA 2019, the minimum foreign investment threshold is:
NPR 20 million (approx. USD 150,000)
This applies per foreign investor, not per company, unless exempted.
Certain technology transfer arrangements
Priority industries with cabinet approval
NRN investments under specific schemes
Below is the practical process foreign founders follow.
Confirm your business is not on the negative list.
Reserve a unique name at the Office of the Company Registrar (OCR).
Apply to:
Department of Industry (DOI) or
Investment Board Nepal (IBN) for large projects
Submit constitutional documents to OCR.
Open a foreign investment bank account.
Inject capital through formal banking channels.
Obtain PAN and VAT registration if applicable.
Register employees under Nepal’s Social Security Fund.
Foreign founders should prepare the following:
Passport copies of shareholders and directors
Certificate of incorporation of parent company
Board resolution approving Nepal investment
Shareholder agreement
Memorandum and Articles of Association
Power of attorney
Bank reference letter
Project report or business plan
All foreign documents must be notarised and apostilled or consularised.
| Criteria | NRN Investor | Foreign National |
|---|---|---|
| Ownership | Up to 100% | Up to 100% (sector-based) |
| Minimum Investment | Often flexible | NPR 20 million |
| Approval Authority | DOI | DOI / IBN |
| Repatriation Rights | Guaranteed | Guaranteed |
| Compliance Burden | Moderate | Higher |
Understanding tax exposure is essential.
Standard rate: 25%
Special industries: 20%
Banks and financial institutions: 30%
Dividends: 5%
Royalties: 15%
Technical service fees: 15%
Double taxation avoidance treaties (DTAs) apply with several countries.
FITTA 2019 guarantees repatriation of:
Dividends
Capital on exit
Loan repayments
Royalties and fees
Repatriation requires:
Audited financials
Tax clearance
NRB approval
Funds must exit through formal banking channels only.
Foreign-owned companies must comply fully with Nepali labour law.
Key requirements include:
Written employment contracts
Minimum wage compliance
Mandatory SSF contributions
Leave and termination rules
Bonus Act compliance
Failure to comply can delay repatriation and visa renewals.
Avoid these frequent errors:
Assuming local incorporation rules apply to foreigners
Underestimating approval timelines
Injecting capital without NRB approval
Ignoring SSF registration
Structuring shareholding incorrectly
Professional structuring at incorporation saves years of compliance risk.
Typical timelines:
Name reservation: 1–2 days
Foreign investment approval: 2–4 weeks
Company registration: 2–3 days
NRB clearance & capital inflow: 1–2 weeks
End-to-end: 4–6 weeks on average.
Expect costs across:
Government fees
Legal drafting
Investment approvals
Banking and compliance setup
Professional advisory support often reduces long-term compliance costs.
If you want to:
Hire quickly
Avoid upfront capital thresholds
Test the market
An Employer of Record (EOR) model may be more suitable initially.
Many foreign firms transition from EOR to full incorporation later.
Yes. Company incorporation Nepal allows 100% foreign ownership in permitted sectors under FITTA 2019.
The standard minimum is NPR 20 million per foreign investor unless exempted.
Risk is manageable with proper legal structuring, approvals, and ongoing compliance.
Yes. FITTA 2019 guarantees repatriation of dividends, capital, and royalties.
Yes. NRN investments still require foreign investment approval.
Company incorporation Nepal offers real opportunities for NRNs and foreign nationals who plan carefully. The legal framework is supportive, but procedural discipline matters.
With the right structure, approvals, and compliance systems, Nepal can be a highly efficient regional base.
Speak with our foreign investment specialists to assess eligibility, structure your entity, and manage approvals end-to-end.
👉 Book a consultation today and start your Nepal expansion with confidence.