How to Register a Company in Nepal: Step-by-Step Guide (2025)

Nepal has become one of South Asia’s most dynamic investment destinations. With improved digital systems, liberalized ownership laws, and access to a skilled workforce, many foreign firms are setting up entities in Kathmandu, Pokhara, and beyond.

But registering a company in Nepal requires careful navigation of multiple authorities — the Department of Industry (DoI), the Office of the Company Registrar (OCR), the Inland Revenue Department (IRD), and Nepal Rastra Bank (NRB).

This 2025 definitive guide explains:

• Legal framework and reforms.

• Entity types and their suitability.

• FDI rules and restricted industries.

• Step-by-step registration workflow.

• Sector-specific obligations.

• Post-registration compliance.

• Common pitfalls and strategic insights.

1. Historical & Policy Context

Nepal’s foreign investment regime has evolved considerably:

• FITTA 1992 – First law opening foreign direct investment.

• FITTA 2019 (2075) – Modernized framework, introduced minimum foreign investment threshold of NPR 20 million (approx. USD 150k).

• Digital Nepal Framework (2019) – Pushed e-governance, resulting in OCR’s eServices portal for online company registration.

• Ease of Doing Business Initiatives (2020–2025) – Reduced paperwork and allowed parallel applications for some steps.

These reforms reflect Nepal’s ambition to integrate into the regional economy and attract foreign capital in IT, hydropower, agriculture, and tourism.

2. Types of Entities in Nepal

2.1 Private Limited Company (Pvt. Ltd.)

• Most flexible option.

• Requires 1–100 shareholders.

• Liability limited to shareholding.

• Up to 100% foreign ownership permitted in most sectors.

• Common for IT, BPO, consulting, trading, education services.

2.2 Public Limited Company

• Requires minimum 7 promoters.

• Eligible for listing on NEPSE.

• Mandatory for banking, insurance, hydropower, telecom.

• Suitable for large-scale, capital-intensive projects.

2.3 Branch Office of a Foreign Company

• Extension of parent company.

• Requires DoI and sometimes line ministry approval.

• Parent is fully liable.

• Common for EPC contractors, consultancies, foreign service firms.

2.4 Liaison Office

• Purely representative, no commercial activity.

• Used for brand promotion, coordination, or research.

• Registered directly with OCR (no FDI approval needed).

2.5 NGOs and Not-for-Profits

• Foreign NGOs must register under Social Welfare Council (SWC).

• Separate compliance regime from companies.

Comparison Table

3. Foreign Direct Investment (FDI) Rules

3.1 Minimum Investment

• Foreign investors must commit at least NPR 20 million (approx. USD 150,000).

• Applies to equity contribution, not debt.

• Exceptions: Some IT/startup projects may qualify for reduced thresholds under government schemes.

3.2 Restricted Sectors

Foreign investment is prohibited in areas such as:

• Cottage industries.

• Security printing.

• Arms and ammunition.

• Real estate business (buy/sell for speculation).

• Retail trading (except international chains).

• Personal services (beauty parlors, tailoring, etc.).

3.3 Approval Authority

• DoI approves projects up to NPR 6 billion.

• Investment Board Nepal (IBN) approves projects above NPR 6 billion or in priority sectors like hydropower, transport, infrastructure.

3.4 What DoI Examines in Proposals

• Financial viability.

• Environmental impact.

• Sectoral restrictions.

• Investor’s track record.

4. Nepal Rastra Bank (NRB) Registration

One of the most critical steps after company incorporation is registering your investment with Nepal’s central bank.

Why it matters:

• NRB records your foreign capital inflow.

• Without NRB registration, you cannot repatriate profits, dividends, or sale proceeds.

• NRB issues an Investment Approval Letter confirming the capital brought in.

Documents required:

• DoI approval certificate.

• OCR incorporation certificate.

• Bank remittance documents (swift copy, credit advice).

• Share allotment details.

• Share register and minutes confirming allotment.

5. Step-by-Step Registration Workflow

Step 1: Name Reservation (OCR)

• Apply online via OCR portal.

• Must be unique in both Nepali and English.

• Reserved for 30 days.

Step 2: Draft MoA & AoA

• Use OCR-prescribed format.

• Define objectives clearly (broad scope recommended).

• Ensure notarization if signed abroad.

Step 3: FDI Approval (DoI/IBN)

• File project proposal.

• Provide shareholder details and financial plan.

• Receive FDI Certificate (valid for 6 months).

Step 4: Incorporation (OCR)

• File online incorporation form.

• Upload MoA, AoA, IDs, FDI approval.

• OCR issues Certificate of Incorporation.

Step 5: PAN/VAT (IRD)

• Mandatory PAN registration.

• VAT registration if turnover exceeds threshold.

Step 6: Local Ward Registration

• Submit office lease agreement.

• Pay annual local taxes/fees.

Step 7: Bank Account Opening

• Submit incorporation certificate, PAN, board resolution.

• Required for FDI remittance.

Step 8: NRB Investment Registration

• Submit proof of inward remittance.

• Obtain NRB Investment Approval Letter.

6. Sector-Specific Requirements

• Banking & Insurance: Need Nepal Rastra Bank and Insurance Board licenses.

• Hydropower: Requires generation license from Department of Electricity Development.

• Telecom: Licensed by Nepal Telecommunications Authority.

• Education: Approval from Ministry of Education for foreign-owned schools/colleges.

• Tourism & Hospitality: Hotel licenses via Department of Tourism.

7. Compliance After Incorporation

• Annual Return Filing (OCR): Must submit shareholder details, AGM minutes, auditor’s report.

• Audit: Mandatory annual audit by licensed auditor.

• Tax: Corporate tax, VAT, excise duties (depending on sector).

• Labor & Social Security: Registration with Social Security Fund (SSF), provident fund contributions.

• Foreign Employees: Work permit from Department of Labor, business visa linked to investment.

• NRB Reporting: Dividends and royalty/loan payments must pass through NRB clearance.

8. Common Mistakes Foreign Investors Make

• Not drafting MoA/AoA with broad enough objectives.

• Missing NRB registration — blocking repatriation later.

• Failing to renew ward registration annually.

• Underestimating time for FDI approval (2–4 weeks minimum).

• Assuming liaison office can do commercial work (it cannot).

9. Pre-Investment Checklist

• Certified passports/citizenship documents.

• Parent company incorporation certificate (for branch/liaison).

• Board resolution approving investment.

• Detailed project proposal (financials, staffing, sectoral plan).

• Draft MoA & AoA in OCR format.

• Local office address/lease agreement.

• Power of Attorney (if appointing agent).

10. Outlook for 2025–2030

Nepal is expected to further modernize business registration:

• Expansion of OCR eServices with full digital signatures.

• Potential reduction of FDI minimum for startups.

• Growth of SEZs (Special Economic Zones) offering tax incentives.

• Policy reforms to attract IT/BPO outsourcing.

• Improved repatriation framework via NRB digital platforms.

Conclusion

Company registration in Nepal involves multiple steps but is increasingly streamlined through digital systems and legal reforms. Foreign investors must carefully manage approvals (DoI/IBN, OCR, NRB, IRD, Ward Offices) and comply with post-incorporation obligations.

👉 Digital Consulting Ventures specializes in guiding foreign companies through every stage of registration and compliance. Contact us today to start your Nepal entry strategy with confidence.

FAQs

How long does it take to register a company in Nepal?
Around 6–8 weeks including FDI approval, OCR incorporation, tax, and NRB registration.

Can foreigners fully own a Nepalese company?
Yes. 100% foreign ownership is allowed in most permitted sectors.

Do I need a Nepali partner?
No, except in restricted industries.

What documents are required?
MoA, AoA, IDs, FDI approval, Board Resolution, office address proof, NRB remittance documents.

What happens after registration?
You must register for tax, file annual returns, maintain audits, and comply with NRB, labor, and ward regulations.