Company registration in Nepal is often the first and most critical step for foreign companies entering the Nepali market. Yet many investors struggle to understand legal fees, timelines, compliance rules, and the correct structure to choose. This guide answers the most common questions foreign companies ask before incorporating in Nepal. You will learn the exact process, realistic costs, legal requirements, and how to avoid delays while staying fully compliant.
This article is written from an advisor’s perspective. It reflects real regulatory practice, not theory.
Nepal is positioning itself as a strategic South Asian hub for services, IT, outsourcing, hydropower, tourism, and manufacturing. Government reforms under FITTA 2019 and the Industrial Enterprises Act 2020 have made foreign investment clearer, though not simpler.
Registering correctly protects your capital, ensures profit repatriation, and prevents regulatory penalties.
Foreign companies typically register in Nepal to:
Establish a long-term market presence
Hire local or outsourced staff legally
Secure FDI approval and banking access
Repatriate dividends and service fees
Comply with tax, labour, and immigration laws
Choosing the wrong structure is the most expensive mistake foreign companies make.
This is the most common structure for foreign investors.
Key features:
Minimum 1 shareholder
Can be 100 percent foreign-owned
Requires FDI approval
Separate legal entity
Best for operating businesses, hiring staff, and generating revenue.
A branch is an extension of a foreign parent company.
Key features:
No separate legal identity
Allowed for revenue-generating activities
Requires approval from multiple regulators
Best for companies executing contracts in Nepal.
A liaison office is non-commercial.
Key features:
No income-generating activities
Limited to marketing, coordination, research
Lower compliance burden
Best for market entry testing.
Often confused with liaison offices. Functionally similar but used less frequently.
The company registration in Nepal process involves multiple regulators. Understanding the correct sequence saves months.
You apply to the Office of Company Registrar (OCR).
Requirements:
Proposed company name
Business objectives
Promoter details
Approval usually takes 1 to 3 working days.
Foreign investment approval is mandatory.
Authorities involved:
Department of Industry or IBN
Nepal Rastra Bank (post-investment)
Documents required:
Board resolution
Parent company documents
Investment plan
Passport copies
Once FDI is approved, the company is incorporated.
Documents:
Memorandum of Association
Articles of Association
Shareholder agreements
You receive a Certificate of Incorporation.
Registration with the Inland Revenue Department is compulsory.
PAN is mandatory. VAT applies if thresholds are met.
FDI capital must enter Nepal through an approved bank channel.
This step triggers NRB reporting obligations.
You must register:
Local ward office
Social Security Fund
Labour office
Foreign investors often underestimate total legal costs. Below is a realistic breakdown.
Name reservation: NPR 100
Company registration: NPR 1,000 to 15,000 (based on capital)
PAN registration: No fee
VAT registration: No fee
These vary by complexity.
Typical ranges:
Company incorporation support: USD 800 to 1,500
FDI approval handling: USD 1,000 to 3,000
Compliance setup and licensing: USD 500 to 2,000
Audit and tax filings
Company renewals
Labour and SSF compliance
| Criteria | Private Limited (FDI) | Branch Office | Liaison Office |
|---|---|---|---|
| Revenue allowed | Yes | Yes | No |
| Legal entity | Separate | Extension | Extension |
| FDI approval | Mandatory | Mandatory | Mandatory |
| Hiring allowed | Yes | Yes | Limited |
| Compliance level | High | High | Medium |
| Best for | Long-term operations | Project execution | Market research |
While official timelines are optimistic, real-world timelines differ.
Typical duration:
Name approval: 1 to 3 days
FDI approval: 15 to 30 days
Company incorporation: 3 to 5 days
Tax and bank setup: 7 to 10 days
Total realistic timeline: 4 to 8 weeks
Delays often occur due to incomplete documents or unclear investment objectives.
Foreign investors often repeat the same errors.
Avoid these pitfalls:
Choosing the wrong entity structure
Understating capital requirements
Ignoring labour law compliance
Delaying NRB reporting
Using generic legal templates
Early advisory support reduces long-term costs significantly.
Registration is only the beginning.
Post-incorporation obligations include:
Annual returns to OCR
Income tax filings
VAT filings if applicable
Social Security Fund contributions
Statutory audit
Non-compliance can lead to penalties or FDI suspension.
Key tax points:
Corporate income tax: 25 percent standard rate
Withholding tax on dividends: 5 percent
VAT: 13 percent
Transfer pricing rules apply
Double Taxation Avoidance Agreements may reduce tax exposure.
Key legislation governing company registration in Nepal includes:
Companies Act 2006
Foreign Investment and Technology Transfer Act 2019
Industrial Enterprises Act 2020
Income Tax Act 2002
Labour Act 2017
These laws collectively regulate ownership, repatriation, employment, and compliance.
Professional support is recommended if:
Investment exceeds USD 100,000
Multiple shareholders are involved
You plan to repatriate profits
You require work visas
Experienced advisors prevent regulatory backtracking.
Yes. Under FITTA 2019, foreigners can own 100 percent equity in approved sectors.
The minimum FDI threshold is NPR 20 million, subject to sector-specific rules.
For foreign companies, the process usually takes 4 to 8 weeks.
Not initially. Registration can be handled through a local representative.
Yes. Profits and dividends can be repatriated after tax compliance and NRB approval.
Company registration in Nepal is a regulated but highly rewarding process for foreign companies that approach it correctly. Understanding legal fees, timelines, and compliance obligations from the start prevents delays and protects your investment. With the right structure and expert guidance, Nepal offers a stable and cost-effective entry into South Asia.
Planning to register a company in Nepal as a foreign investor?
Speak with our regulatory and FDI specialists for a step-by-step consultation tailored to your business model.