Foreign Investment Board (IBN) and OCR Role in Company Registration

Foreign company registration in Nepal is not handled by a single authority. Instead, it is a coordinated process led by two core institutions: the Investment Board Nepal (IBN) and the Office of Company Registrar (OCR).

Understanding who does what is essential for foreign investors. Many delays and rejections occur simply because applications are submitted to the wrong authority or in the wrong sequence.

This guide explains, in plain language, how IBN and OCR interact, when each body is involved, and how foreign companies can register efficiently while staying fully compliant.

Why two authorities are involved in foreign company registration in Nepal

Nepal separates investment approval from company incorporation.

This distinction protects national interest while ensuring corporate governance standards are met.

• IBN evaluates whether foreign investment is allowed and on what terms.

• OCR formalizes how the business legally exists in Nepal.

Both approvals are mandatory for most foreign companies.

The Investment Board Nepal (IBN): Gateway for foreign investment approval

What is the Investment Board Nepal?

The Investment Board Nepal is the apex government body responsible for facilitating and approving foreign direct investment (FDI), particularly for:

• Large-scale investments

• Strategic sectors

• Priority industries defined by law

IBN operates under Nepal’s foreign investment framework and acts as a single-window facilitator for qualifying projects.

When is IBN approval required?

IBN approval is required when:

1. Foreign investment exceeds the prescribed capital threshold

2. The sector is classified as sensitive or strategic

3. The investment involves infrastructure, energy, or public-private partnerships

4. The project seeks investment incentives or special approvals

Smaller investments may be approved by the Department of Industry instead, but the legal logic remains the same.

What IBN evaluates during foreign company registration in Nepal

IBN does not register companies. It evaluates the investment proposal itself.

IBN typically reviews:

• Sector eligibility under foreign investment laws

• Capital structure and funding sources

• Shareholding and control rights

• Technology transfer or knowledge inflow

• Employment and economic contribution

• Repatriation and exit mechanisms

This ensures Nepal receives sustainable, compliant foreign investment.

Key deliverables issued by IBN

Once approved, IBN issues:

• FDI Approval Letter

• Approved investment structure

• Capital commitment confirmation

These documents are legally required before OCR incorporation can proceed.

The Office of Company Registrar (OCR): Legal incorporation authority

What is the OCR?

The Office of Company Registrar is Nepal’s official corporate registry.

OCR is responsible for:

• Incorporating companies

• Registering branches and liaison offices

• Maintaining statutory company records

Without OCR registration, a foreign entity has no legal existence in Nepal.

What OCR does in foreign company registration in Nepal

OCR handles the legal formation, not the investment approval.

OCR’s responsibilities include:

• Reviewing constitutional documents

• Verifying ownership and governance structure

• Issuing the Company Registration Certificate

• Maintaining compliance records

OCR ensures the company meets the Companies Act requirements.

Documents OCR requires after IBN approval

Once IBN approval is secured, OCR requires:

• IBN approval letter

• Memorandum of Association (MOA)

• Articles of Association (AOA)

• Board resolutions of the foreign parent

• Passport and corporate documents of shareholders

• Registered office address in Nepal

OCR will not proceed without valid IBN approval where required.

How IBN and OCR work together in practice

Step-by-step flow of foreign company registration in Nepal

1. Investment structuring and eligibility assessment

2. FDI approval application to IBN

3. Receipt of IBN approval letter

4. Company incorporation filing at OCR

5. Issuance of Company Registration Certificate

6. Post-registration tax, bank, and compliance activation

This sequence is legally mandatory.

Common mistake foreign investors make

A frequent error is attempting OCR registration before securing IBN approval.

This results in:

• Application rejection

• Loss of government fees

• Delays of several months

Correct sequencing saves time and cost.

Comparison: IBN vs OCR in foreign company registration in Nepal

This division of authority is deliberate and legally enforced.

Types of foreign entities registered through OCR

After IBN approval, OCR registers:

• Foreign-owned private limited companies

• Branch offices

• Liaison offices

• Joint venture companies

Each structure has different compliance and operational rights.

Post-registration obligations most investors overlook

Foreign company registration in Nepal does not end at OCR.

After incorporation, companies must complete:

• Tax registration with the Inland Revenue Department

• Bank account opening and capital injection

• Industry registration where applicable

• Social Security Fund enrollment

• Annual filings and audits

Failure here can invalidate investment approvals.

Regulatory laws governing IBN and OCR

Foreign company registration in Nepal is primarily governed by:

• Foreign Investment and Technology Transfer Act (FITTA)

• Companies Act

• Industrial Enterprises Act

• Nepal Rastra Bank foreign exchange directives

These laws define the powers of IBN and OCR.

Why professional guidance matters

IBN and OCR processes are interlinked but handled by different ministries.

Professional advisors help:

• Determine the correct approving authority

• Prepare compliant investment structures

• Coordinate approvals efficiently

• Avoid costly restructuring later

This is especially important for regulated sectors.

Frequently Asked Questions (People Also Ask)

Is IBN approval mandatory for all foreign company registration in Nepal?

No. IBN approval depends on investment size and sector. Smaller investments may be approved by other authorities, but OCR registration is always required.

Can a foreign company register directly with OCR without IBN?

Only if the investment does not require IBN approval. If IBN approval is mandatory, OCR will reject the application without it.

Does IBN issue a company registration certificate?

No. IBN issues investment approval. The company registration certificate is issued only by the OCR.

How long does foreign company registration in Nepal take?

With proper documentation, IBN approval can take several weeks. OCR incorporation typically takes 7–15 working days after approval.

Can a foreign company operate immediately after OCR registration?

Not fully. Tax registration, bank capitalization, and statutory registrations must be completed before operations begin.

Conclusion

Foreign company registration in Nepal is a two-stage process by design.

The Investment Board Nepal decides whether and how foreign investment is permitted. The Office of Company Registrar then gives that investment a legal corporate identity.

Understanding their distinct but connected roles is the key to faster approvals, lower risk, and long-term compliance.

Call to action

If you are planning foreign company registration in Nepal, speak with a specialist before filing.
Book a consultation to structure your investment correctly, coordinate IBN and OCR approvals, and enter Nepal with confidence.