Foreign company registration in Nepal is governed by a structured legal and regulatory framework designed to protect investors while aligning with national economic priorities. For foreign companies, Nepal offers a growing consumer market, competitive labour costs, and a clear foreign investment regime.
That said, success depends on understanding government rules, approvals, and compliance obligations from day one. This guide explains the exact process, laws, timelines, and risks so you can enter Nepal with confidence and avoid costly delays.
Nepal has steadily improved its investment climate. According to government data, foreign direct investment has increased across sectors such as IT services, hydropower, tourism, manufacturing, and professional services.
Foreign investors are attracted by:
Strategic location between India and China
Liberal repatriation rules for profits and capital
Competitive operational costs
100 percent foreign ownership in most permitted sectors
Dedicated government bodies for FDI facilitation
Foreign company setup in Nepal is not based on one single law. It is regulated through multiple statutes and government authorities.
Foreign Investment and Technology Transfer Act (FITTA 2019)
Companies Act
Industrial Enterprises Act
Income Tax Act
Nepal Rastra Bank foreign exchange directives
These laws collectively govern entry approval, company incorporation, taxation, profit repatriation, and foreign exchange compliance.
Foreign companies cannot operate informally in Nepal. One of the following government-approved structures must be used.
This is the most common and flexible route.
Minimum investment threshold set by government policy
Allows revenue-generating activities
Eligible for profit repatriation
Suitable for IT, consulting, manufacturing, and services
A branch is an extension of the foreign parent company.
Allowed only for approved activities
No separate legal personality
Requires prior approval for contracts or projects
Limited revenue scope
This structure is for market presence only.
No commercial or income-generating activity
Used for coordination, research, or promotion
Lower compliance burden
Foreign company registration in Nepal involves coordination with several government bodies.
Department of Industry – FDI approval
Office of Company Registrar – Company incorporation
Inland Revenue Department – Tax registration
Nepal Rastra Bank – Foreign exchange and repatriation approval
Below is the exact sequence followed by successful foreign investors.
Authorities first assess whether your proposed activity is:
Fully open
Conditionally allowed
Restricted or prohibited
This assessment avoids rejection later.
An application is filed with:
Investor details
Proposed investment amount
Business plan
Shareholding structure
Approval timelines typically range from 15 to 30 working days.
Once FDI approval is granted:
Company name is reserved
Memorandum and Articles are filed
Company is registered as a Nepal entity
Foreign capital must enter Nepal via:
Approved commercial bank
Inward remittance in foreign currency
Proper FDI reporting
Post-incorporation compliance includes:
Permanent Account Number registration
VAT registration if applicable
Local ward office registration
Foreign companies should prepare documents carefully to avoid delays.
Key documents include:
Certificate of incorporation of parent company
Board resolution approving Nepal investment
Passport and identification of shareholders
Business plan and financial projections
Power of attorney for local representative
All foreign documents must be notarised and, in many cases, consularised.
| Criteria | FDI Private Company | Branch Office | Liaison Office |
|---|---|---|---|
| Revenue generation | Allowed | Limited | Not allowed |
| Legal entity | Separate | Extension | Extension |
| Profit repatriation | Yes | Limited | Not applicable |
| Compliance level | Medium | Medium | Low |
| Best for | Long-term operations | Project execution | Market research |
Foreign company registration in Nepal does not end at incorporation.
Annual tax filing
Monthly payroll and withholding tax
Social Security Fund contributions
Annual audit by licensed Nepali auditor
Regulatory reporting for foreign exchange
Failure to comply can affect profit repatriation and renewal approvals.
One of the strongest advantages of Nepal’s FDI regime is repatriation certainty.
Foreign investors can repatriate:
Dividends
Sale proceeds of shares
Loan repayments
Technology transfer fees
All repatriation must follow Nepal Rastra Bank procedures with audited financials.
Avoiding these errors saves months of delay.
Choosing the wrong entry structure
Underestimating documentation formalities
Injecting capital before approval
Ignoring payroll and labour compliance
Not planning repatriation documentation early
Foreign company registration in Nepal is rule-driven, not discretionary. Authorities expect precision, legal clarity, and compliance from day one.
Working with specialists ensures:
Correct structure selection
Faster approvals
Bank-compliant capital inflow
Audit-ready compliance systems
Yes. Most sectors permit full foreign ownership unless listed as restricted under prevailing industrial policy.
Typically 4 to 8 weeks, depending on sector and document readiness.
Government policy sets a minimum threshold, which may vary by sector and revision.
Yes, subject to tax clearance and Nepal Rastra Bank approval.
A local authorised representative is required, but foreign directors are permitted.
Foreign company registration in Nepal offers a legally secure and commercially attractive entry into South Asia. With the right structure, documentation, and compliance partner, foreign investors can operate smoothly and repatriate profits without friction.
If you are planning foreign company registration in Nepal, early strategic guidance makes all the difference.