Government Taxes and Charges During Company Registration in Nepal

Understanding the cost of company registration in Nepal is one of the first concerns for foreign companies entering the Nepali market. While Nepal offers one of South Asia’s most cost-effective incorporation regimes, government taxes and statutory charges can feel opaque to international investors.

This guide breaks down every government tax, registration charge, and mandatory payment you may encounter. It is written for foreign founders, CFOs, and legal teams who want clarity, predictability, and compliance from day one.

By the end, you will know exactly what you must pay, to whom, and why—with no hidden surprises.

Why Government Charges Matter More Than Service Fees

Professional advisory fees vary by provider.
Government charges do not.

These statutory payments are non-negotiable, regulated, and enforced by law. Misunderstanding them often leads to delays, penalties, or rejected applications.

For foreign companies, government costs are especially important because they interact with:

• Foreign investment approvals

• Capital repatriation

• Ongoing tax compliance

• Banking and licensing timelines

Key Authorities You Will Pay During Company Registration

Foreign companies interact with multiple regulators. Each charges specific statutory fees.

• Office of the Company Registrar (OCR)

• Inland Revenue Department (IRD)

• Nepal Rastra Bank (NRB)

• Department of Industry (DOI)

Each authority plays a distinct role in determining the cost of company registration in Nepal.

Cost of Company Registration in Nepal: Government Taxes and Charges (Overview)

At a high level, government costs fall into four categories:

1. Company incorporation charges

2. Tax registration and compliance fees

3. Foreign investment approvals and banking costs

4. Ongoing statutory charges after registration

We explore each in detail below.

1. Office of Company Registrar (OCR) Charges

Registration Fee Based on Authorized Capital

Nepal uses a capital-based slab system. The higher your authorized capital, the higher your registration fee.

Insight for foreign companies:
Setting unnecessarily high capital increases cost without tax benefits.

Name Reservation Fee

• Mandatory before incorporation

• Valid for limited time

Cost: NPR 100

A rejected name requires re-application and additional time.

Amendment and Filing Fees (Often Overlooked)

Foreign investors frequently incur additional OCR costs later:

• Capital increase

• Director change

• Shareholding change

• Registered address update

Each amendment attracts a separate statutory fee.

2. Inland Revenue Department (IRD) Charges

Permanent Account Number (PAN) Registration

PAN registration is mandatory for all companies, including foreign-owned entities.

• Government fee: NPR 0

• Mandatory before bank accounts and invoicing

While PAN itself is free, delays here can halt operations.

Value Added Tax (VAT) Registration

VAT registration is mandatory if:

• Annual turnover exceeds NPR 5 million

• Engaged in VAT-applicable services

Government fee: NPR 0
Compliance impact: Monthly filings required.

Digital Signature and Tax Filing Setup

While not always charged directly by IRD, companies incur indirect government-mandated costs for:

• Digital tax filing systems

• Authorized signatories

3. Foreign Direct Investment (FDI) Approval Charges

Foreign companies must obtain approval under Foreign Investment and Technology Transfer Act 2019.

Department of Industry (DOI) Processing Fees

• Application processing charges

• Documentation review fees

Indicative government cost: NPR 20,000 – 50,000
(varies by sector and investment size)

Minimum Investment Threshold

Nepal mandates a minimum FDI commitment.

• Current threshold: NPR 20 million

This is not a fee, but it directly affects capital planning and cash flow.

4. Nepal Rastra Bank (NRB) Charges

Foreign Currency Approval and Banking Compliance

NRB approvals are required for:

• Capital inflow

• Dividend repatriation

• Loan structuring

While NRB itself charges minimal direct fees, banks pass on:

• Swift charges

• Compliance processing fees

These costs are regulatory-driven and unavoidable.

One-Time vs Ongoing Government Costs (Comparison)

Strategic takeaway:
Low entry cost does not mean low ongoing compliance responsibility.

Hidden Government Charges Foreign Companies Miss

Many investors underestimate the true cost of company registration in Nepal by ignoring indirect statutory costs.

Commonly missed items include:

• Annual company renewal fees

• Late filing penalties

• Withholding tax compliance costs

• Social Security Fund registration fees

• Labor office registrations

These are not optional.

Legal Basis for Government Charges (EEAT Reinforcement)

All charges described are governed by:

• Companies Act 2006

• Income Tax Act 2002

• Industrial Enterprises Act 2020

Understanding the law protects foreign shareholders from compliance risk.

Step-by-Step: Government Payments During Registration

Here is a simplified sequence foreign companies follow:

1. Reserve company name at OCR

2. Pay OCR incorporation fee

3. Obtain PAN from IRD

4. Apply for FDI approval at DOI

5. Inject capital via NRB-approved bank

6. Register for VAT (if applicable)

Missing a step can restart the process.

How Nepal Compares Regionally on Government Costs

Nepal remains one of the lowest-cost jurisdictions in South Asia for incorporation.

• No paid-up capital tax

• No stamp duty on share issuance

• No incorporation VAT

This is a strategic advantage for lean market entry.

Frequently Asked Questions (People Also Ask)

Is company registration in Nepal expensive for foreigners?

No. Government charges are low compared to regional markets. Most costs relate to compliance, not incorporation.

Are government fees different for foreign-owned companies?

Yes. FDI approvals add additional statutory steps and costs.

Do I pay tax during company registration?

No income tax is due at registration. Only administrative charges apply.

Can government fees change annually?

Yes. OCR and DOI fees may be revised through notices.

Is VAT mandatory at registration?

Only if your activity or turnover meets VAT thresholds.

Call to Action: Get a Precise Cost Breakdown

Government charges are only one part of the equation.
Incorrect planning leads to delays and penalties.

👉 Request a tailored cost and compliance roadmap for your Nepal entry.
Our specialists guide foreign companies through registration, FDI approval, and ongoing compliance—end to end.

Conclusion

The cost of company registration in Nepal is transparent, affordable, and highly competitive.
The real value lies in understanding government taxes and statutory charges upfront.

Foreign companies that plan correctly enjoy faster approvals, smoother banking, and risk-free operations.
Those who guess often pay more later.