FAQs About the Company Registration Process in Nepal (2026 Update)

The company registration process in Nepal is often misunderstood by foreign companies entering South Asia for the first time. Nepal welcomes foreign direct investment, but its legal, regulatory, and compliance framework is layered and documentation-heavy. Many investors lose months due to incorrect structuring, missing approvals, or poor compliance planning.

This 2026-updated guide answers the most common and high-intent questions foreign companies ask. It is written from a legal, regulatory, and operational perspective to help founders, CFOs, and expansion leaders make confident decisions.

If you are planning to enter Nepal through FDI, a subsidiary, or a long-term operating presence, this article is designed to give you clarity and direction.

Why Foreign Companies Ask So Many Questions About Nepal Registration

Nepal is not a “plug-and-play” jurisdiction. Unlike Singapore or Hong Kong, registration is only one part of market entry. Foreign companies must align company law, FDI approval, tax registration, labour compliance, and banking from day one.

Foreign investors typically ask questions because:

• Multiple authorities are involved.

• FDI approval is separate from company incorporation.

• Sector-specific rules apply.

• Repatriation depends on compliance history.

• Timelines vary based on structure and preparedness.

Understanding these early reduces risk and accelerates market entry.

Overview of the Company Registration Process in Nepal

The company registration process in Nepal for foreign companies usually follows a structured sequence.

Step-by-Step Overview

1. Investment structure decision
   Subsidiary, joint venture, or conversion from EOR to FDI.

2. FDI approval
   Approval from DOI or IBN under FITTA 2019.

3. Company incorporation
   Registration at the Office of Company Registrar (OCR).

4. Tax registrations
   PAN, VAT (if applicable), and local registrations.

5. Bank account opening
   Capital account and operational account.

6. Post-registration compliance
   Labour, SSF, accounting, and annual filings.

Each step has dependencies. Skipping one causes delays later.

Key Laws Governing Company Registration in Nepal

Foreign companies must comply with several core laws.

Primary Legislation

• Companies Act 2006
  Governs incorporation, directors, shareholding, and filings.

• Foreign Investment and Technology Transfer Act (FITTA) 2019
  Governs foreign ownership, approval thresholds, and repatriation.

• Industrial Enterprises Act 2020
  Defines sector classification and licensing.

• Income Tax Act 2002
  Corporate tax, withholding tax, and permanent establishment rules.

• Labour Act 2017 & SSF Act 2018
  Employment, payroll, and social security obligations.

These laws operate together. Registration without compliance planning creates long-term exposure.

Who Is Eligible to Register a Company in Nepal?

Foreign companies are eligible if they meet statutory conditions.

Eligibility Criteria

• Minimum foreign investment threshold met.

• Sector not listed under the negative list.

• Lawful source of funds.

• Clear business objective and structure.

Certain sectors require additional approvals or caps. Examples include media, aviation, and defense-related activities.

Minimum Investment Requirement for Foreign Companies

As of 2026, Nepal requires a minimum foreign investment of NPR 20 million for most FDI projects.

This amount must be:

• Approved under FITTA 2019.

• Remitted through formal banking channels.

• Reflected in the company’s capital structure.

Service-based businesses sometimes qualify for phased investment, but this requires justification and approval.

How Long Does the Company Registration Process Take?

Timelines vary depending on preparation quality.

Typical Timeline Breakdown

Incomplete documentation is the biggest cause of delay.

Documents Required for Company Registration in Nepal

Foreign companies must submit notarized and apostilled documents.

Commonly Required Documents

• Certificate of incorporation of parent company.

• Board resolution approving Nepal investment.

• Passport copies of shareholders and directors.

• Memorandum and Articles of Association.

• FDI application and business plan.

• Power of attorney for local representatives.

All foreign documents must meet Nepal’s legalization standards.

Choosing the Right Structure: Subsidiary vs Liaison vs Branch

Structure impacts taxation, control, and repatriation.

Comparison Table: Entry Models for Foreign Companies

Most foreign companies choose a 100% foreign-owned subsidiary for control and scalability.

Common Mistakes Foreign Companies Make

Avoiding early mistakes saves months.

Frequent Errors

• Assuming OCR registration equals FDI approval.

• Underestimating labour compliance.

• Poor capital structuring.

• Ignoring permanent establishment risks.

• Using incorrect shareholder resolutions.

These mistakes often lead to blocked repatriation or penalties.

Taxation After Company Registration

Registration triggers tax obligations.

Key Tax Points

• Corporate income tax generally applies.

• VAT registration is mandatory above thresholds.

• Withholding tax applies on salaries and payments.

• Transfer pricing rules may apply to parent transactions.

Early tax structuring is critical for profit repatriation.

Employment and Payroll Compliance

Hiring employees creates statutory duties.

Mandatory Employment Compliance

• Written employment contracts.

• Social Security Fund registration.

• Monthly SSF contributions.

• Leave, gratuity, and bonus compliance.

• Payroll tax withholding.

Non-compliance exposes directors to liability.

Repatriation of Profits and Capital

Foreign companies may repatriate:

• Dividends.

• Royalty and service fees.

• Loan repayments.

• Capital on exit.

Repatriation is permitted under FITTA 2019, subject to tax clearance and regulatory approval.

Can You Start with EOR Before Full Registration?

Yes. Many foreign companies start with an Employer of Record (EOR) model.

Why Companies Use EOR First

• Faster market testing.

• No immediate FDI requirement.

• Reduced compliance burden.

• Talent hiring within weeks.

EOR can later transition into an FDI subsidiary.

Cost of Company Registration in Nepal

Costs depend on complexity.

Typical Cost Components

• Government fees.

• Legal and advisory fees.

• Translation and notarization.

• Bank charges.

• Compliance setup costs.

Cheap registration often results in expensive corrections later.

FAQs: Company Registration Process in Nepal

Is company registration in Nepal fully online?

Partially. OCR filings are online, but FDI approval, banking, and notarization still require physical processes.

Can a foreign company own 100% of a Nepal company?

Yes. Most sectors allow 100% foreign ownership under FITTA 2019.

Do directors need to be Nepal residents?

No. Foreign directors are permitted, but local representation is required.

Is VAT mandatory after registration?

Only if turnover exceeds the statutory threshold or the business falls under mandatory VAT categories.

Can profits be freely repatriated?

Yes, subject to tax clearance and approval under Nepal Rastra Bank regulations.

Why Expert Guidance Matters

The company registration process in Nepal is not just about incorporation. It is about building a compliant, scalable, and repatriation-ready operation.

Foreign companies that succeed in Nepal plan their entry holistically. They align legal, tax, HR, and regulatory frameworks from day one.

Call to Action

If you are considering registering a company in Nepal, speak with experts who handle FDI approval, company incorporation, tax, payroll, and compliance under one roof.

👉 Book a free consultation to map your optimal Nepal market entry strategy and avoid costly mistakes.

Conclusion

The company registration process in Nepal offers strong opportunities for foreign companies, but only when approached with clarity and compliance. With the right structure and guidance, Nepal can become a stable and profitable regional base.