Company Registration Process in Nepal for Foreigners and NRNs

The company registration process in Nepal has become significantly more transparent and structured in recent years, especially for foreign investors and Non-Resident Nepalis (NRNs). With updated laws, online systems, and clearer foreign investment rules, Nepal is positioning itself as a viable destination for international businesses seeking South Asian expansion.

If you are a foreign company, startup founder, or NRN planning to enter Nepal, this guide explains the exact legal steps, documents, timelines, costs, and compliance obligations you must understand before incorporating. The goal is simple: help you register correctly the first time and avoid regulatory risk later.

This article reflects current practice under Nepal’s Companies Act, FITTA 2019, and related regulations.

Why Foreign Companies and NRNs Are Registering Businesses in Nepal

Nepal offers several strategic advantages for foreign investors and NRNs:

• Competitive labor costs with a young, English-speaking workforce
• Preferential treatment and guarantees under FITTA 2019
• Access to the Indian and South Asian markets
• Growing IT, outsourcing, tourism, hydropower, and service sectors
• Full foreign ownership permitted in many industries

However, success depends on choosing the right registration structure and complying with investment laws from day one.

Legal Framework Governing Company Registration in Nepal

Understanding the legal foundation is essential before starting the registration process.

Key Laws and Authorities

• Companies Act, 2006 – governs incorporation, structure, and governance
• Foreign Investment and Technology Transfer Act (FITTA), 2019 – regulates foreign and NRN investment
• Industrial Enterprises Act, 2020 – classification and licensing
• Income Tax Act, 2002 – taxation framework
• Labor Act, 2017 and Social Security Fund Act, 2018 – employment compliance

Key Regulatory Bodies

• Office of the Company Registrar (OCR)
• Department of Industry (DOI) or Investment Board Nepal (IBN)
• Nepal Rastra Bank (NRB)
• Inland Revenue Department (IRD)

Types of Business Entities Available to Foreigners and NRNs

Choosing the correct entity is the most important strategic decision.

1. Private Limited Company (Most Common)

This is the preferred structure for most foreign companies and NRNs.

• Minimum one shareholder
• Maximum 101 shareholders
• Limited liability
• Can be 100 percent foreign-owned in permitted sectors

2. Public Limited Company

• Minimum seven shareholders
• Suitable for large investments or capital markets
• Higher compliance burden

3. Branch Office

• Extension of a foreign company
• No separate legal personality
• Restricted to specific approved activities

4. Liaison or Representative Office

• No revenue-generating activities allowed
• Used for market research or coordination

Company Registration Process in Nepal (Step-by-Step)

Below is the official company registration process in Nepal for foreigners and NRNs.

Step 1: Sector and Investment Eligibility Check

Before any filing, confirm that your proposed business activity is:

• Open to foreign investment
• Not on Nepal’s negative or restricted list
• Meets minimum foreign investment thresholds

Most service, IT, consulting, and outsourcing businesses are permitted.

Step 2: Name Reservation at the Office of the Company Registrar

You must reserve a unique company name online through OCR.

Requirements:

• Three proposed names in priority order
• Name must not conflict with existing companies
• Approval typically within 1–3 working days

Step 3: Prepare Incorporation Documents

The following documents are mandatory:

• Memorandum of Association (MOA)
• Articles of Association (AOA)
• Passport copies of shareholders and directors
• NRN ID card (for NRNs)
• Board resolution of foreign parent company (if applicable)

Step 4: Company Registration with OCR

Once documents are ready, the company is formally incorporated.

OCR issues:

• Certificate of Incorporation
• Company Registration Number

This establishes the company as a legal entity in Nepal.

Step 5: Foreign Investment Approval (DOI or IBN)

Foreigners and NRNs must obtain investment approval under FITTA 2019.

Authority depends on investment size:

• Department of Industry – standard projects
• Investment Board Nepal – large or strategic projects

Approval covers:

• Investment amount
• Shareholding structure
• Business activity

Step 6: Capital Inflow and Nepal Rastra Bank Compliance

After approval, capital must be remitted through:

• A Nepali commercial bank
• Designated foreign currency account

NRB reporting is mandatory to ensure lawful capital inflow.

Step 7: PAN and VAT Registration

Every company must register for tax.

• PAN is mandatory for all companies
• VAT registration required if turnover exceeds NPR 5 million

Issued by the Inland Revenue Department.

Step 8: Local Ward and Industry Registration

Depending on the business:

• Ward office registration
• Industry registration under Industrial Enterprises Act

Documents Required for Company Registration in Nepal

Here is a consolidated checklist.

For Foreign Shareholders:

• Passport copy
• Company incorporation documents (if corporate shareholder)
• Board resolution approving Nepal investment

For NRNs:

• Passport copy
• NRN ID card
• Address proof

Company Documents:

• MOA and AOA
• Name reservation approval
• Investment approval letter

Timeline for Company Registration in Nepal

The realistic timeline is as follows:

1. Name reservation: 1–3 days

2. OCR incorporation: 3–5 days

3. Foreign investment approval: 2–4 weeks

4. Bank and NRB compliance: 1–2 weeks

5. Tax registration: 2–3 days

Total estimated time: 4–6 weeks

Cost of Company Registration in Nepal

Government Fees and Professional Costs

Costs vary based on capital size and complexity.

Compliance Obligations After Registration

Registering the company is only the beginning.

Ongoing Compliance Includes:

• Annual financial statements
• Annual returns to OCR
• Tax filings and withholding compliance
• Social Security Fund registration
• Labor law compliance

Failure to comply can result in penalties or investment restrictions.

Key Differences: Foreigners vs NRNs

NRNs often benefit from simplified procedures and preferential treatment.

Common Mistakes Foreign Companies Make

Avoid these frequent issues:

• Selecting restricted business activities
• Incorrect MOA drafting
• Improper capital remittance
• Ignoring labor and tax compliance
• Treating Nepal entity as informal extension

Professional structuring prevents future disputes.

Taxation Overview for Foreign-Owned Companies

• Corporate tax: Generally 25 percent
• VAT: 13 percent (if applicable)
• Withholding tax on services and dividends
• Double taxation treaties may apply

Tax planning should be addressed during incorporation.

Why Professional Support Matters

The company registration process in Nepal involves multiple regulators and sequential approvals. Foreign companies that rely on ad-hoc support often face delays, rejections, or compliance exposure.

A structured advisory approach ensures:

• Faster approvals
• Correct legal positioning
• NRB and tax compliance
• Long-term operational readiness

Call to Action

If you are planning to start or expand your business in Nepal, the right structure and compliance setup are critical.

Book a free consultation to assess your eligibility, costs, timelines, and risk profile before you register your company in Nepal.

Conclusion

The company registration process in Nepal is highly achievable for foreigners and NRNs when approached strategically. With clear laws, improving digital systems, and strong investor protections under FITTA 2019, Nepal offers real opportunities for international businesses.

The key is preparation, compliance, and expert guidance from day one.

FAQs – Company Registration Process in Nepal

1. Can a foreigner fully own a company in Nepal?

Yes. Foreigners can own 100 percent of a company in permitted sectors under FITTA 2019, subject to approval.

2. How long does company registration in Nepal take?

Typically four to six weeks, including foreign investment approval and bank compliance.

3. What is the minimum investment required for foreigners?

The minimum foreign investment threshold is generally NPR 20 million, subject to sector-specific rules.

4. Is NRB approval mandatory for foreign investors?

Yes. Capital inflow must be reported through a Nepali bank in compliance with Nepal Rastra Bank regulations.

5. Can NRNs register companies more easily?

Yes. NRNs often receive preferential treatment and streamlined procedures compared to other foreign nationals.