The Company Act Nepal is the backbone of corporate compliance in Nepal.
For foreign companies, it defines how you incorporate, operate, report, and exit.
Non-compliance can result in fines, operational restrictions, or cancellation of registration.
This guide is a practical compliance checklist.
It is written for founders, CFOs, legal teams, and foreign investors entering Nepal.
You will find legal obligations, timelines, penalties, and best-practice insights.
Whether you are setting up a subsidiary, joint venture, or scaling operations, this article helps you stay compliant from day one.
The Company Act Nepal (Companies Act, 2006, with amendments) regulates:
Company incorporation
Corporate governance
Director and shareholder duties
Statutory filings
Financial reporting
Compliance enforcement
All companies registered in Nepal must follow it.
Foreign-owned companies are not exempt.
Foreign entities fall under the Act if they:
Incorporate a Private Limited Company in Nepal
Register a Public Company
Hold shares through Foreign Direct Investment (FDI)
Operate a branch office registered with OCR
Liaison offices are regulated differently.
However, most operational businesses fall squarely under the Act.
Below is a stage-wise compliance checklist used by advisors and regulators.
Every company must submit and maintain:
Memorandum of Association (MOA)
Articles of Association (AOA)
Shareholder details
Director appointments
Registered office address
Foreign companies must also provide:
Parent company registration certificate
Board resolution approving Nepal investment
Power of attorney to local representative
Key risk:
Incorrect object clauses in MOA restrict future business activities.
Authorized capital must be declared upfront
Issued and paid-up capital must match filings
Share allotments must be reported
Foreign investors must ensure alignment with:
FDI approval letters
Sectoral investment caps
Shareholding ratios
Common mistake:
Changing shareholding without OCR filing.
Under the Company Act Nepal:
Minimum one director for private companies
Directors owe fiduciary duties to the company
Director details must be updated with OCR
Directors must ensure:
Statutory filings are timely
Financial statements are accurate
Compliance risks are addressed
Failure may trigger personal liability.
Every company must maintain:
Share register
Director register
Minutes of meetings
Statutory books
These must be available at the registered office.
OCR inspections can occur without prior notice.
This is where most foreign companies fail.
You must file annually:
Annual return
Audited financial statements
Shareholding confirmation
Deadlines are fixed.
Late filings attract penalties.
| Compliance Item | Authority | Due Timeline | Penalty Risk |
|---|---|---|---|
| Annual Return | OCR | Within fiscal deadline | Monetary fine |
| Audited Accounts | OCR | Annually | Late fee + scrutiny |
| AGM Resolution Filing | OCR | Post AGM | Filing default |
| Director Changes | OCR | Within 7–35 days | Compliance notice |
Insight:
OCR cross-checks filings with tax and NRB data.
Private companies must:
Hold Annual General Meeting (AGM)
Record board decisions
Approve accounts formally
Minutes must be:
Properly drafted
Signed
Archived
Informal decisions do not hold legal value.
All companies must:
Maintain proper books of accounts
Appoint a registered auditor
Complete annual audits
Accounts must reflect:
True and fair view
Nepal Financial Reporting Standards
Consistency with tax filings
False reporting can lead to criminal liability.
Penalties include:
Monetary fines
Daily late fees
OCR warnings
Registration suspension
Company strike-off
Directors may also face personal consequences.
| Area | Local Company | Foreign-Owned Company |
|---|---|---|
| Capital Approval | Simple | Requires FDI approval |
| Reporting Scrutiny | Moderate | High |
| Regulatory Overlap | OCR only | OCR + NRB + DOI |
| Exit Process | Simple | Regulated |
Foreign companies face higher scrutiny.
Proactive compliance is essential.
Maintain a compliance calendar
Appoint local compliance officers
Conduct quarterly internal reviews
Align OCR, tax, and FDI filings
Seek professional oversight
Compliance is not paperwork.
It is a risk-management function.
✔ MOA and AOA compliant and updated
✔ Shareholding properly filed
✔ Directors legally appointed
✔ Registered office active
✔ Statutory records maintained
✔ Annual returns filed
✔ Audits completed
✔ AGM conducted
Missing even one item creates exposure.
Common reasons include:
Misunderstanding local timelines
Assuming home-country rules apply
Ignoring OCR notices
Fragmented legal and accounting support
The Act is strict but predictable.
Compliance issues are preventable.
Expert advisors help you:
Interpret the Company Act Nepal correctly
Maintain real-time compliance
Liaise with OCR and regulators
Avoid penalties and reputational risk
This is critical during scaling or restructuring.
The Company Act Nepal is not optional.
For foreign companies, it defines your legal existence.
A structured compliance approach protects:
Your investment
Your directors
Your ability to operate and scale
Treat compliance as a strategic priority, not a formality.
If you are a foreign company planning to incorporate, invest, or scale in Nepal, expert guidance matters.
👉 Book a compliance consultation to review your Company Act Nepal obligations and avoid costly mistakes.
Yes. Any company registered in Nepal, including foreign-owned subsidiaries and branches, must comply fully with the Company Act Nepal.
Companies must file annual returns, audited financial statements, and AGM records with the Office of the Company Registrar within prescribed deadlines.
Penalties include monetary fines, late fees, regulatory notices, and possible strike-off. Directors may also face liability.
Yes. Directors, including foreign nationals, owe fiduciary duties and can be held accountable for compliance failures.
Yes. Persistent non-compliance can lead to suspension or cancellation of company registration by OCR.