Company registration in Nepal: complete founder checklist

Foreign founders love Nepal’s growth story. Company registration in Nepal is also practical. You get a clear legal path, predictable steps, and helpful regulators. This guide gives you the founder view. It covers entities, FDI approvals, taxes, payroll, and banking. It focuses on risk, time, and cost. It keeps sentences short. It shows you what to do and when.

Why Nepal, why now

Nepal offers strategic access to South Asia. Costs are competitive. Talent is loyal and skilled. Policy reforms support foreign direct investment. Digital government improves each year. Many sectors welcome high-value projects. You can build services, light manufacturing, or tech. You can test ideas fast. You can scale with confidence.

Key legal anchors you should know

• Companies Act, 2063 (2006).

• Foreign Investment and Technology Transfer Act, 2019 (FITTA).

• Industrial Enterprises Act, 2020.

• Labor Act, 2017, and Social Security Act, 2018.

• Income Tax Act, 2002, and VAT Act, 1996.

• Nepal Rastra Bank foreign exchange directives.

These set the rules. They define entities, filings, and investor rights. They also guide repatriation and payroll.

Company registration in Nepal: entity options for foreign investors

Choose the right entry route. Your model, risk, and control should drive it.

Quick comparison

Founder tip: Most new investors pick a Private Limited. It is flexible and bank-friendly. It supports growth and exits.

Regulator map and who does what

• Office of the Company Registrar (OCR): Name reservation and incorporation.

• Department of Industry (DOI) or Investment Board Nepal (IBN): FDI approval based on size and sector.

• Inland Revenue Department (IRD): PAN, VAT, and tax administration.

• Nepal Rastra Bank (NRB): Foreign exchange controls and repatriation approvals.

• Social Security Fund (SSF): Employer registration and payroll compliance.

• Sector regulators: ICT, health, energy, and finance have extra rules.

The founder checklist: end-to-end steps

Follow this order. It reduces rework and delays.

1) Pre-entry checks and project framing

1. Define the business model, revenue sources, and contracts.

2. Confirm the sector is open for FDI.

3. Choose the entity route based on control, risk, and tax.

4. Draft a three-year budget and hiring plan.

5. Map banking needs and capital remittance stages.

6. Identify any technology transfer elements under FITTA.

Deliverables: Concept note, compliance memo, cap table, and draft timelines.

2) Name reservation at OCR

1. Pick unique names aligned with Nepal rules.

2. Prepare primary and backup names.

3. Reserve the selected name with OCR.

Deliverables: Name reservation confirmation.

3) FDI approval (FITTA)

1. Prepare a concise business plan.

2. Add projected financials and hiring detail.

3. Attach parent documents and board resolutions.

4. File with DOI or IBN as required.

5. Respond to clarifications quickly.

Deliverables: FDI approval letter, approved project scope, and capital structure.

4) Incorporation with OCR (Private Limited)

1. Draft the Memorandum and Articles.

2. Set registered office and local contact.

3. Appoint directors and shareholders.

4. Finalize share capital and classes.

5. Notarize and submit forms.

Deliverables: Certificate of Incorporation, company number, and charter documents.

5) Tax registrations with IRD

1. Apply for PAN for the company.

2. Register for VAT if the model requires VAT.

3. Configure e-tax accounts and officials.

Deliverables: PAN certificate, VAT certificate (if applicable).

6) Banking and capital remittance

1. Open a corporate account with an A-class bank.

2. Complete know-your-customer steps.

3. Remit approved share capital through banking channels.

4. Keep swift messages and bank advice slips.

5. Log inward remittance for NRB records.

Deliverables: Bank account, capital credit notes, and remittance files.

7) Statutory registers and first board actions

1. Approve share allotment and issue share certificates.

2. Appoint auditors as per law.

3. Approve company seals and authority matrix.

4. Set financial year and accounting policies.

Deliverables: Board minutes, registers, share certificates.

8) Labor and payroll setup

1. Register with the Social Security Fund.

2. Create employment contracts and HR policies.

3. Configure payroll withholding and benefits.

4. Obtain work permits for expatriate staff.

Deliverables: SSF registration, HR handbook, permit files.

9) Commercial readiness

1. Sign office lease and utility contracts.

2. Obtain sector licenses if needed.

3. Configure invoicing and VAT books.

4. Implement cybersecurity and data policies.

Deliverables: Trade operations checklist and license copies.

10) Ongoing compliance calendar

1. Prepare annual returns and board meetings.

2. Track tax filings and advance payments.

3. Update SSF and labor registers.

4. Maintain NRB filings for repatriation.

5. Monitor license renewals and address changes.

Deliverables: Twelve-month compliance calendar with owners.

Document checklist for a smooth file

Use this list to reduce regulator queries.

From the foreign parent

• Certificate of incorporation and constitution.

• Board resolution authorizing the Nepal investment.

• Ultimate beneficial ownership declaration.

• Audited financial statements or proof of funds.

• Passport copies of directors and shareholders.

For the Nepal company

• Proposed MOA and AOA.

• Lease intent or office address proof.

• Local director or authorized representative details.

• Auditor consent letter.

• Specimen signatures and photo IDs.

Banking and FX

• KYC forms and sanctions screening.

• Source of funds declaration.

• Inward remittance documents and swift copies.

HR and payroll

• Employment contracts.

• SSF registration pack.

• Work permit filings for expatriates.

Timelines and effort: what founders can expect

Your timeline depends on sector, complexity, and approvals. The critical path has three locks. Name reservation. FDI approval. Incorporation. Banking runs in parallel, but needs KYC. Tax and SSF are fast after incorporation.

Indicative sequence

1. Name reservation: short.

2. FDI approval: moderate.

3. Incorporation: short after FDI.

4. PAN and VAT: short.

5. Banking and remittance: moderate.

6. HR and SSF: short.

Founder tip: Respond to clarifications in one business day. Delays compound fast.

Tax and invoicing basics you should plan for

• Corporate income tax applies to Nepal-source profits.

• VAT currently stands at 13% on taxable supplies.

• Withholding tax applies to defined payments.

• Transfer pricing rules apply for related-party deals.

• Dividends and service fees have repatriation steps.

• Export services may have specific VAT treatment.

• Maintain robust documentation for audits.

Work with a local tax adviser. Model your pricing and margins early. Align your contracts with tax and FX rules.

Banking, repatriation, and NRB touchpoints

Foreign exchange rules protect stability. They also enable clean exits.

• Remit share capital through licensed banks only.

• Keep every bank advice, swift copy, and FDI letter.

• Record capital in statutory registers.

• Seek NRB permissions for dividends and fees.

• Track each inflow and outflow in a control sheet.

• Use board minutes to document repatriation decisions.

Result: You will move money in and out with confidence.

Sector flags and the “negative list”

Not all sectors are open. FITTA defines restricted and conditional areas. Some activities need extra scrutiny. Some need higher approvals. Some are not allowed. Always check the latest Gazette and schedules. Seek a formal written view if doubt remains.

Private Limited vs Branch: a decision helper

Use this quick model. It saves time in early talks.

• Choose Private Limited if you need hiring freedom.

• Choose Private Limited if you want local contracts.

• Choose Branch if you will execute a parent contract.

• Choose Branch if you want tight parent control.

• Choose Liaison for research only. No invoicing.

You can convert your posture later. Yet conversion carries friction. Try to get it right at the start.

Governance best practices for foreign boards

• Keep board composition simple and skilled.

• Use a clear authority matrix for bank and contracts.

• Approve a compliance calendar at the first meeting.

• Conduct quarterly reviews with finance and legal.

• Maintain a related-party register.

• Approve intercompany pricing and service levels.

• Store minutes and registers in digital vaults.

These steps build trust. Banks and auditors value this discipline.

Risk controls founders should implement early

• Sanctions and PEP screening for all counterparties.

• Vendor due diligence and conflict checks.

• Two-factor approvals for payments.

• Cybersecurity policies and backups.

• Physical access controls in offices.

• Incident response plan with owners.

• Quarterly internal audits for the first year.

Small controls prevent big issues. Start strong.

Hiring and HR: the essentials

• Written employment contracts are a must.

• Register in the Social Security Fund on time.

• Track leave, overtime, and benefits properly.

• Obtain work permits for expatriates before joining.

• Respect health, safety, and welfare rules.

• Maintain an employee handbook and grievance policy.

Great HR reduces turnover. It also protects leadership time.

Compliance calendar: sample first-year plan

Quarter 1

• Board meeting and auditor appointment.

• PAN, VAT, and SSF registrations.

• First payroll and withholding setup.

• Banking and inward remittance filings.

Quarter 2

• VAT returns and TDS payments.

• Sector license progress.

• Internal audit of registers and minutes.

Quarter 3

• Transfer pricing documentation checkpoint.

• Asset register and inventory check.

• SSF reconciliation.

Quarter 4

• Annual return to OCR.

• Financial statements and audit.

• Tax computations and filings.

• NRB repatriation planning if needed.

Founder’s quick-start numbered roadmap

1. Confirm sector openness under FITTA.

2. Decide entity: Subsidiary, Branch, or Liaison.

3. Reserve name at OCR.

4. Prepare FDI pack and apply to DOI or IBN.

5. Incorporate with OCR.

6. Obtain PAN and VAT from IRD.

7. Open bank account and remit share capital.

8. Issue shares and appoint auditor.

9. Register with SSF and complete HR setup.

10. Start billing and maintain registers.

Print this. Share it with your team. Track each step to done.

Practical budget lines founders forget

• Translation, notarization, and legalization costs.

• Courier and government receipts management.

• Board meeting logistics and recording tools.

• Cybersecurity and insurance cover.

• Extra rent deposits and fit-out costs.

• ERP or accounting software licenses.

Plan these. Your cash flow will thank you.

What “good” looks like after six months

• Clean registers and accurate cap table.

• Up-to-date tax and VAT filings.

• SSF compliance without penalties.

• Contracts aligned with transfer pricing.

• NRB files ready for future dividends.

• A trained finance and HR team.

• A founder who sleeps well.

Citations and authority notes 

• Companies Act, 2063 (Government of Nepal).

• Foreign Investment and Technology Transfer Act, 2019.

• Industrial Enterprises Act, 2020.

• Labor Act, 2017, and Social Security Act, 2018.

• Income Tax Act, 2002, and Value Added Tax Act, 1996.

• Nepal Rastra Bank unified circulars and foreign exchange directives.

• Office of the Company Registrar, Department of Industry, Inland Revenue Department.

These are the core sources used by practitioners. Use them for internal checks. Keep copies in your deal room.

Frequently asked questions 

1) How long does company registration in Nepal take?
Time varies by sector and approvals. The longest step is FDI approval. Incorporation and tax registrations follow quickly. Good files move faster. Clear and complete documents save weeks.

2) Can a foreign company own 100% of a Nepal entity?
Yes, in many sectors. Ownership depends on FITTA schedules and sector rules. Some areas are restricted or conditional. Confirm your sector early. Seek a formal view before committing capital.

3) Do I need a local director?
You need local representation for filings and bank work. A resident director improves execution and speed. Many founders appoint a trusted local executive. Define duties and powers in board minutes.

4) Can I invoice customers from a Liaison Office?
No. Liaison Offices cannot conduct revenue activities. They support research and coordination. Use a Private Limited or Branch to invoice. Choose based on model and control needs.

5) How do I repatriate profits?
Keep bank advice notes and NRB-ready files. Approve dividends through board resolutions. File repatriation requests with required proofs. The process is routine if your records are clean and complete.