Company formation Nepal: service packages and inclusions

Company registration in Nepal is straightforward when you know the steps, documents, and the right partner. This guide breaks down end-to-end incorporation, from name reservation to post-registration compliance, with clear service packages and inclusions designed for foreign companies. You’ll see transparent timelines, what each package covers, and how to avoid common delays—all written in plain language.

At a glance: who this guide is for

• Foreign founders planning a private limited company, branch, or liaison office

• Investors setting up an FDI entity under Nepal’s current rules

• Regional HQs comparing “subsidiary vs branch” in South Asia

• Scale-ups that want plug-and-play finance, HR, and tax compliance from day one

The legal framework you’ll operate under 

• Companies Act 2063 (2006) – core company law (incorporation, governance, filings).

• Foreign Investment and Technology Transfer Act (FITTA) 2019 – FDI approvals, investment modes, repatriation.

• Industrial Enterprises Act 2076 (2019) – sector incentives and operational norms.

• Income Tax Act 2058 (2002) & VAT Act 2052 (1996) – corporate income tax, VAT, TDS.

• Labour Act 2074 (2017) & Social Security Fund Rules – employment terms and social security.

• Nepal Rastra Bank (central bank) FX rules – capital inflow, share purchase, and repatriation procedures.

• Office of the Company Registrar (OCR) – online name reservation and incorporation filings.

• Department of Industry (DOI) / Investment Board Nepal (IBN) – FDI approvals depending on project size/sector.

• Inland Revenue Department (IRD) – PAN/VAT registration and ongoing returns.

Note: Thresholds, fees, and minor procedures change periodically. Treat the figures below as planning ranges and verify specifics during onboarding.

Company registration in Nepal: service packages at a glance 

Our packages are built for speed, compliance, and smooth operations. Each tier includes a dedicated project manager, document templates, and status updates.

Package comparison 

How to read this:

• Starter suits straightforward private limited companies with minimal complexity.

• Growth is ideal for foreign-owned subsidiaries with VAT, payroll, and FDI.

• FDI-Plus covers multi-licence or regulated sectors (e.g., healthcare, finance-adjacent, manufacturing).

What’s actually included 

Phase 1 — Strategy & eligibility

1. Structure mapping: Private limited vs branch vs liaison office.

2. Shareholding & capital plan: Align with FITTA and bank FX documentation.

3. Object clause & name check: Avoid restricted or mis-classified activities.

4. Roadmap & risk register: Dependencies, holiday calendars, and third-party touchpoints.

Phase 2 — Documents & drafting

• Promoter KYC checklist and attestation guidance.

• Drafting Memorandum of Association (MOA) and Articles of Association (AOA) aligned with Companies Act.

• Board/shareholder resolutions (for foreign parent entities).

• Notarization guidance (if documents originate outside Nepal).

Phase 3 — Filings & registrations

• OCR online submission and physical verification where required.

• PAN registration with IRD; VAT if needed.

• Labour registration and SSF setup for employees.

Phase 4 — Banking & capital

• Bank account KYC pack preparation.

• Inward remittance advisory for foreign capital under NRB rules.

• Share allotment and FIRC (foreign inflow) documentation where applicable.

Phase 5 — Licences & sector permits

• Trading licence, municipal approvals, and sector-specific clearances.

• Import/export, quality, or health & safety certifications if required.

Trading licence, municipal approvals, and sector-specific clearances.

• Import/export, quality, or health & safety certifications if required.

Phase 6 — Go-live compliance

• Compliance calendar (monthly, quarterly, annual).

• Payroll setup, basic HR policies, onboarding forms.

• VAT/TDS return setup and guidance.

• First AGM planning checklist and annual filing timetable.

Which structure is right for you?

Private limited subsidiary

Pros: Liability protection, wider activity scope, easier scaling, clean tax filings.
Cons: Full compliance burden; may need VAT registration and payroll from month one.

Branch office 

Pros: Simpler brand/control alignment; revenue-earning allowed within permitted scope.
Cons: Tax treatment at branch level; approvals and reporting can be heavier than a subsidiary.

Liaison/representative office

Pros: Low-risk market entry; great for market research and partner development.
Cons: No commercial revenue allowed; expenditure only; approvals/renewals required.

Snapshot comparison

Documents checklist 

For promoters/beneficial owners

• Passport (notarized/certified).

• Proof of address.

• Bank reference or financial standing letter (if requested).

• CV or profile (for regulated sectors).

For corporate shareholders

• Certificate of incorporation.

• Memorandum & Articles (or Charter/Bylaws).

• Board resolution approving investment / setting up entity.

• Good standing certificate (if available).

For all

• Proposed company name and primary activities.

• Registered office address in Nepal (can be virtual in many cases).

• Capital structure and share split.

• Local director details (if any).

Tip: Notarization and apostille (or embassy attestation) may be required for foreign documents. Build this into your timeline.

Realistic timelines 

• Name reservation: 1–2 business days if object clauses are clean.

• OCR incorporation: Typically 3–7 business days after complete filing.

• PAN: 1–2 business days.

• VAT: 2–5 business days depending on inspections.

• Bank account: 3–10 business days subject to KYC and signatory presence.

• FDI approvals (DOI/IBN): Expect 3–8+ weeks depending on sector and completeness.

• Licences: Vary widely by municipality and activity.

Common causes of delay: Incomplete KYC, unclear object clauses, peak seasons/festivals, and physical verification requirements.

Estimated cost ranges 

Figures below are planning estimates for professional services and typical government outlays. Actuals vary by capital, sector, and municipal norms.

• Incorporation (OCR + drafting): Commonly modest government fees; professional fees vary by complexity.

• VAT registration: Low direct fee; allocate for inspections and documentation.

• Payroll/HR setup: One-time setup plus monthly processing fees if outsourced.

• FDI processing & banking FX paperwork: Additional professional time; bank charges for SWIFT/FX.

• Licences/permits: Highly sector-specific; budget a contingency.

Budgeting tip: Reserve a 10–20% contingency for unforeseen municipal or inspection-related costs.

Compliance calendar 

Monthly / bi-monthly

• VAT returns (if registered).

• TDS withholding and deposits.

• Payroll processing and SSF contributions.

Quarterly

• Advance tax (if applicable).

• Management accounts and cashflow review.

Annual

• Financial statements and statutory audit (if thresholds apply).

• Annual return and AGM filings per Companies Act.

• Licence renewals and municipal taxes.

• Transfer pricing documentation (if intra-group transactions).

Numbered step-by-step: how your project will run

1. Kick-off call & scope lock. Confirm structure and deliverables.

2. Document collection. KYC, corporate papers, and templates issued.

3. Drafting. MOA/AOA and resolutions tailored to your activities.

4. OCR filing. We file and track until registration certificate is issued.

5. Tax registrations. PAN and VAT (if applicable).

6. Banking. Account opening pack, signatory coordination, and KYC support.

7. FDI workflow. Where relevant—approval, remittance, and share allotment.

8. Licences & municipal filings. Only if your sector needs them.

9. Operational handover. Payroll/HR starter kit, compliance calendar, and training.

10. Post-go-live support. Returns, renewals, and audits as per plan.

Bulleted best-practice checklist 

• Choose object clauses that match real operations—don’t over-promise.

• Decide early on VAT registration to avoid supplier friction.

• Confirm signatory travel or arrange notarized power of attorney ahead of bank KYC.

• Keep a single data room for all approvals, letters, and receipts.

• Map your cash in/out with NRB FX rules for clean repatriation later.

• Book compliance reminders around major Nepali festivals to avoid last-minute filings.

Service packages and inclusions 

Starter – for straightforward private limited setup

You get:

• Name clearance, MOA/AOA, OCR filing.

• PAN registration.

• Bank account support.

• Compliance calendar + first 30-day helpdesk.

• Optional registered/virtual office.

Good fit if: Few shareholders, non-regulated activity, no immediate VAT or payroll.

Growth – the FDI-ready workhorse

You get:

• Everything in Starter.

• VAT registration and employee onboarding (Labour + SSF).

• FDI filing and approval handling (DOI/IBN) where required.

• Inward remittance & share allotment advisory.

• Two months of return-filing hand-holding.

• HR starter kit (policies, offer letters, forms).

Good fit if: Foreign parent, revenue operations, early hiring needs.

FDI-Plus – for regulated or multi-licence operations

You get:

• Everything in Growth.

• Sector-specific licences and municipal permits.

• Enhanced governance documents, board packs, and policy suite.

• Dedicated compliance manager and quarterly reviews.

• Transfer pricing framework for inter-company services.

Good fit if: Manufacturing, health-adjacent, or multiple approvals expected.

Risk controls we implement for you

• KYC precision: Pre-screen documents to prevent rejection.

• Object clause accuracy: Align with permitted activities under law.

• Timeline buffers: Build in festival and inspection windows.

• Audit trail: Maintain a complete paper and digital trail for investors and banks.

• Change control: Resolutions for directors, address, capital, or bank signatories.

What changes often 

• Municipal interpretation of VAT site visits.

• Bank KYC standards and acceptable proofs.

• FDI thresholds and sector lists.

• Social Security and labour notifications.

• Filing portals and documentary formats.

We track circulars and practice changes weekly so your plan stays current.

Real-world example paths

• SaaS subsidiary: Starter → Growth once VAT threshold or enterprise clients require VAT number.

• Trading company: Start directly with Growth for VAT and import support.

• Market-entry liaison: Liaison package now; convert to subsidiary after 6–12 months.

Frequently Asked Questions 

1) How long does company registration in Nepal take?
Most straightforward private limited setups complete in 2–4 weeks including PAN and bank account. FDI approvals or sector licences can extend this to 5–12+ weeks.

2) Do I need to be in Nepal to open the bank account?
Many banks require at least one authorized signatory to appear or provide notarized/attested POA. Plan early to save time.

3) Is VAT mandatory from day one?
Not always. It depends on activity, turnover, and customer demands. Many B2B firms register early to avoid vendor friction.

4) Can a foreign company own 100% of a Nepali subsidiary?
Often yes, except in restricted sectors. Review FITTA rules and any sector-specific caps before structuring.

5) What ongoing filings should I expect?
VAT/TDS (if applicable), payroll and SSF, annual return/AGM, audit as required, licence renewals, and corporate tax filings.