Everything You Need to Know About Company Incorporation in Nepal (2025 Guide)

Company incorporation in Nepal is increasingly becoming an attractive option for foreign companies looking to expand into South Asia. With strategic location, low operational costs, an educated English-speaking workforce, and ongoing reforms in business regulation, Nepal presents unique opportunities for global investors.

This 2025 guide provides a comprehensive, step-by-step breakdown of how foreign entities can incorporate a company in Nepal, highlighting key legal processes, documents, costs, timelines, compliance duties, and government incentives — all while optimizing content for Google rankings.

Why Incorporate a Company in Nepal?

Nepal’s economic policy is geared toward attracting foreign investment across sectors like IT, manufacturing, renewable energy, tourism, and agro-processing. Foreign companies can own up to 100% equity in most permitted sectors.

Key Benefits for Foreign Investors:

• 100% foreign ownership allowed in most sectors

• Skilled, cost-effective workforce

• Improved FDI approval systems (including automatic routes)

• Digital incorporation systems with government reforms

• Growing infrastructure and favorable tax incentives

Legal Framework: Foreign Investment and Technology Transfer Act (FITTA)

All foreign investment in Nepal is governed by the Foreign Investment and Technology Transfer Act (FITTA), 2019, which outlines procedures for investment approval, repatriation rights, and the regulatory framework.

Key FITTA Provisions:

• Minimum FDI threshold: NPR 20 million (~USD 150,000)
  (Note: Exemptions exist for IT-based companies)

• FDI must be approved by either the Department of Industry (DoI) or Investment Board Nepal (IBN)

• Investments can be made via:

  • Equity shares

  • Joint ventures

  • Lease financing

  • Technology transfer

Once FDI is approved, the investor must incorporate the company through the Office of the Company Registrar (OCR) and subsequently fulfill tax and central bank compliance.

Step-by-Step Guide to Company Incorporation in Nepal (2025)

Step 1: Determine Eligibility

Ensure the business is not on Nepal’s Negative List (e.g. small-scale retail, personal services, weapons manufacturing, etc.). Foreign companies are welcome in sectors like:

• Software and IT services

• Renewable energy

• Manufacturing

• Education

• Infrastructure

Step 2: Apply for Foreign Investment Approval (FDI)

Foreign investors must submit a proposal to the Department of Industry (DoI), including:

• Investor profile

• Business proposal

• Financial credibility certificate

• Board resolution (for corporate investors)

• Passport copies (for individuals)

2025 Update: Automatic FDI Approval

Investments up to NPR 500 million in designated sectors (like IT, tourism, services) are eligible for online automatic approval, significantly reducing wait times.

Timeline: 3–30 days depending on sector and route
Security Deposit: NPR 20,000 (refundable upon investment realization)

Step 3: Reserve Company Name

Register a unique company name through the Office of the Company Registrar (OCR). The name must:

• Be available and not identical to existing companies

• Include “Private Limited” or “Ltd.”

Fee: ~NPR 500
Approval Time: 1–3 days

Step 4: Draft Incorporation Documents

Required documents include:

• Memorandum of Association (MoA) – objectives, capital structure

• Articles of Association (AoA) – governance framework

• FDI approval letter

• Investor IDs or corporate documents

• Power of Attorney (if appointing a local representative)

Language: English (plus Nepali version recommended)

Step 5: Company Registration at OCR

Submit incorporation documents to OCR either:

• Physically

• Via Nepal’s online company registration portal

Fees Based on Authorized Capital:

Processing Time: 7–10 days

Deliverable: Certificate of Incorporation

Step 6: Post-Incorporation Compliance

a) Tax Registration

Register with the Inland Revenue Department (IRD) for:

• Permanent Account Number (PAN) – required for all transactions

• VAT Registration – if annual turnover exceeds NPR 2 million

b) Industry Registration (if applicable)

Required for manufacturing and export businesses via the DoI. You may need:

• Local Ward Office recommendation

• Business location documentation

c) Nepal Rastra Bank (NRB) Registration

Before remitting capital into Nepal:

• Open a corporate bank account

• Get NRB approval for inward remittance

• Bank issues Foreign Inward Remittance Certificate

d) Capital Injection and Share Allotment

Wire investment capital into Nepal. Upon receipt:

• Allot shares to the foreign investor

• Update shareholder register

• Notify OCR (if structure changes)

Typical Timeline (Estimation)

Costs at a Glance

Incentives for Foreign Companies in Nepal (2025)

• 100% repatriation rights for profits and capital

• 5–10 year tax holidays for certain industries (e.g. export, tourism)

• Customs duty exemptions on capital equipment

• No capital ceiling for IT companies (especially under automatic route)

• Fast-tracked approval system for FDI via online OSS portal

Common Pitfalls to Avoid

• Submitting incomplete documentation for FDI approval

• Not aligning MoA business objectives with FDI proposal

• Failing to remit capital within one year of approval

• Missing VAT threshold and facing penalties

• Using a restricted business sector without checking the Negative List

Final Thoughts

Company incorporation in Nepal is now more accessible for foreign companies thanks to regulatory reforms, digital government systems, and investor incentives. Whether you’re setting up a software firm, manufacturing plant, or consultancy, Nepal offers a compelling environment with favorable ownership rules, skilled human resources, and a growing economy.

Key Takeaways for Foreign Companies

✅ 100% foreign ownership allowed in most sectors
✅ Minimum capital: NPR 20 million (waived for IT under automatic route)
✅ FDI and company registration can be completed in 4–6 weeks
✅ Digital systems and one-stop centers reduce paperwork
✅ Post-registration compliance is critical for long-term operation