Company incorporation in Nepal has become a strategic move for foreign companies seeking cost efficiency, skilled talent, and long-term access to South Asia. Nepal is no longer just a low-cost outsourcing destination. It is a legally structured, investment-friendly market backed by modern FDI laws and improved regulatory clarity.
With reforms under FITTA 2019, the Companies Act 2006, and digital company registration systems, incorporating a company in Nepal is more transparent than ever. This guide explains the process step by step, in plain language, so foreign founders, CFOs, and expansion leaders can make confident decisions.
Company incorporation in Nepal refers to the legal registration of a business entity with the Office of the Company Registrar (OCR), allowing it to operate as a recognized corporate body.
Once incorporated, the company gains:
Separate legal identity
Ability to hire employees locally
Eligibility to open bank accounts
Access to tax registration and profit repatriation
For foreign companies, incorporation is typically done through Foreign Direct Investment (FDI) approval.
Nepal offers a rare combination of low operational costs and strong legal protections for foreign investors.
Competitive salary and operating costs
English-speaking, educated workforce
Investor protections under FITTA 2019
Profit and capital repatriation rights
Time-zone overlap with Asia, Europe, and Australia
According to Nepal Rastra Bank and the Department of Industry, FDI approvals have steadily increased over recent years, particularly in IT, services, and consulting sectors.
Foreign companies must choose the correct structure before starting company incorporation in Nepal.
Separate legal entity
Minimum 1 shareholder
Suitable for FDI and scaling
Minimum 7 shareholders
Used for large capital-intensive ventures
Extension of foreign parent
Limited operational scope
Non-revenue generating
For market research only
| Structure | Can Earn Revenue | FDI Allowed | Scalability | Best For |
|---|---|---|---|---|
| Private Limited Company | Yes | Yes | High | Long-term operations |
| Branch Office | Yes | Yes | Medium | Controlled operations |
| Liaison Office | No | Yes | Low | Market entry testing |
Insight: Over 80 percent of foreign investors choose a Private Limited Company due to flexibility and repatriation rights.
Company incorporation in Nepal is regulated by multiple laws:
Companies Act 2006
Foreign Investment and Technology Transfer Act (FITTA) 2019
Industrial Enterprises Act 2020
Income Tax Act 2002
Labour Act 2017
Social Security Act 2018
These laws collectively protect investors, employees, and the state.
Submit proposed names to the OCR portal.
Apply to the Department of Industry with:
Investment plan
Shareholding structure
Parent company documents
Register Memorandum and Articles of Association with OCR.
Register with the Inland Revenue Department.
Open a local bank account and inject foreign capital.
Mandatory compliance for hiring employees.
Foreign investors should prepare the following:
Certificate of Incorporation of parent company
Board resolution approving Nepal investment
Passport copies of shareholders and directors
Project report and financial projections
Memorandum and Articles of Association
All documents must be notarized and apostilled.
As per FITTA 2019:
Minimum foreign investment: NPR 20 million
Sector-specific thresholds may apply
Capital must be brought into Nepal through formal banking channels.
Standard corporate tax: 25 percent
Certain sectors receive incentives
Withholding tax: 5 percent
Progressive slabs as per Income Tax Act
Nepal has Double Tax Avoidance Agreements (DTAA) with multiple countries, reducing tax exposure for foreign companies.
Once company incorporation in Nepal is complete, employers must comply with:
Written employment contracts
Minimum wage regulations
Paid leave and holidays
Social Security Fund contributions
Payroll tax deductions
Non-compliance can lead to penalties or license suspension.
Avoid these frequent errors:
Choosing the wrong entity structure
Underestimating compliance workload
Delaying capital injection
Ignoring SSF and labour filings
Using unlicensed local agents
Professional guidance reduces regulatory risk significantly.
Typical timeline:
Name approval: 2–3 days
FDI approval: 2–4 weeks
Company registration: 3–5 days
Tax and bank setup: 1–2 weeks
Total: Approximately 4–6 weeks.
Costs vary based on structure and advisory support.
Government registration fees
FDI application charges
Legal and consulting fees
Notarization and translation
Transparent advisors provide fixed-fee packages.
Yes. FITTA 2019 guarantees:
Protection against nationalization
Equal treatment with local investors
Full repatriation of profits and capital
Dispute resolution mechanisms
Nepal is also a signatory to international investment protection conventions.
Some companies start with:
Employer of Record (EOR)
Outsourcing partnerships
They later transition to full company incorporation in Nepal once scale and stability are achieved.
Company incorporation in Nepal is no longer complex or risky when done correctly. For foreign companies seeking sustainable expansion, Nepal offers legal certainty, cost advantages, and strong investor protections.
With the right structure and local expertise, incorporation becomes a strategic asset rather than a compliance burden.
Thinking about company incorporation in Nepal?
Speak with our FDI and company registration specialists for a free consultation and incorporation roadmap tailored to your business goals.
Yes. FITTA 2019 allows full foreign ownership in approved sectors.
Usually between four and six weeks, depending on approvals.
Yes. Profits and capital can be repatriated through formal banking channels.
No. Foreign nationals can serve as directors.
No. The process can be completed remotely with authorized representatives.