How NRNs and Expats Can Register a Business in Nepal

Foreign company registration in Nepal has become one of the most searched topics among Non-Resident Nepalis (NRNs) and expatriates looking to enter South Asia’s fastest-opening frontier market. Nepal offers low operating costs, a young workforce, and improving investment protections.

Yet the legal path differs depending on whether you are an NRN with Nepali roots or a foreign national with no Nepali citizenship. This guide explains exactly how NRNs and expats can register a business in Nepal, which structure fits best, and how to stay compliant from day one.

This article is written for founders, directors, and investors who want clarity, not legal jargon.

Why NRNs and Expats Are Choosing Nepal

Nepal is no longer just a tourism or remittance-based economy. Policy reforms over the past decade have actively encouraged foreign investment.

Key drivers include:

• Competitive labor and operating costs

• English-speaking professional talent

• Strategic access to India and China

• 100% foreign ownership in most sectors

• Repatriation of profits permitted under law

According to government investment data, foreign direct investment approvals have consistently increased in services, IT, energy, and manufacturing.

Who Can Register a Business in Nepal?

Non-Resident Nepalis (NRNs)

NRNs are individuals of Nepali origin who hold foreign citizenship or residency. Under Nepal’s investment laws, NRNs are treated similarly to foreign investors, with some procedural advantages in practice.

NRNs can:

• Own up to 100% equity in permitted sectors

• Invest individually or jointly

• Repatriate dividends and capital

Expatriates / Foreign Nationals

Foreign nationals with no Nepali citizenship can also register and own companies in Nepal, subject to:

• Minimum investment thresholds

• Sectoral restrictions

• Foreign investment approvals

Both NRNs and expats must comply with Nepal’s foreign investment framework.

Business Structures Available for NRNs and Expats

Choosing the right structure is the most important strategic decision.

1. Private Limited Company (FDI Company)

This is the most common and recommended structure.

Best for:

• Long-term operations

• Hiring local staff

• Generating revenue in Nepal

Features:

• Separate legal entity

• Limited liability

• Can be 100% foreign-owned

2. Branch Office

Suitable if:

• You already have a parent company overseas

• Activities are limited to the parent’s scope

Limitations:

• Cannot operate outside approved scope

• Profit repatriation is more controlled

3. Liaison Office

Used mainly for:

• Market research

• Relationship building

• Non-commercial presence

Important:

• Cannot generate revenue

• Cannot issue invoices

Comparison: Which Structure Is Right for You?

Original insight:
If your goal is talent hiring, client billing, and long-term presence, the private limited company almost always outperforms branch or liaison models within 12 months.

Step-by-Step Process for Foreign Company Registration in Nepal

Step 1: Confirm Sector Eligibility

Not all sectors are open to foreign investment. Restricted areas include:

• Small retail trade

• Personal services

• Certain media activities

Professional services, IT, consulting, manufacturing, energy, and outsourcing are widely permitted.

Step 2: Meet Minimum Investment Requirements

For most sectors:

• Minimum foreign investment: NPR 20 million

This applies to both NRNs and expats.

Step 3: Apply for Foreign Investment Approval

You must submit a foreign investment proposal including:

• Business plan

• Shareholding structure

• Investment source declaration

Approval is granted by the relevant authority depending on investment size.

Step 4: Company Incorporation

Once investment approval is obtained:

• Reserve company name

• Register with the Company Registrar

• Issue shares to foreign investors

Step 5: Tax and Regulatory Registrations

Mandatory registrations include:

• Permanent Account Number

• VAT registration if applicable

• Social security registration for employees

Step 6: Capital Injection and Bank Setup

Foreign capital must be:

• Remitted through approved banking channels

• Certified by the bank

• Reported to authorities

Step 7: Ongoing Compliance

Annual obligations include:

• Tax filings

• Audit and financial statements

• Renewals and reporting

Documents Required for NRNs and Expats

Typical documentation checklist:

• Passport and visa copies

• NRN card (for NRNs)

• Board resolution or investor declaration

• Business plan

• Source of funds confirmation

• Company incorporation documents

Clean documentation significantly reduces approval timelines.

Timeline: How Long Does Registration Take?

On average:

• Foreign investment approval: 2–4 weeks

• Company incorporation: 1 week

• Tax and bank setup: 1–2 weeks

Total: Approximately 4–6 weeks when properly managed.

Common Mistakes NRNs and Expats Should Avoid

1. Choosing the wrong entity type

2. Underestimating compliance obligations

3. Incomplete source-of-funds documentation

4. Registering a liaison office when revenue is planned

5. Not planning profit repatriation early

Avoiding these errors can save months of delay.

Taxation Overview for Foreign-Owned Companies

Key points:

• Corporate tax applies on net profits

• Withholding tax applies on dividends

• Double taxation relief may apply depending on country

Proper structuring at registration stage reduces long-term tax exposure.

Hiring Staff and Payroll Compliance

Foreign-owned companies can legally:

• Hire Nepali nationals

• Sponsor expatriate work visas

• Register employees under social security

Employment contracts must comply with local labor regulations.

Profit Repatriation for NRNs and Expats

Yes, profits can be repatriated if:

• Taxes are fully paid

• Financials are audited

• Regulatory approvals are obtained

Advance planning ensures smooth outward remittance.

Why Professional Support Matters

Foreign company registration in Nepal involves multiple authorities, overlapping laws, and strict documentation standards.

Professional advisors help with:

• Structuring decisions

• Faster approvals

• Compliance risk reduction

• Long-term scalability

For NRNs especially, blending local insight with international compliance is critical.

Conclusion

Foreign company registration in Nepal is not only possible for NRNs and expats, it is increasingly attractive. The key is choosing the right structure, meeting investment rules, and staying compliant from the start.

With proper planning and expert guidance, Nepal can become a profitable and strategic base for your regional or global operations.

Call to Action

Thinking of registering a company in Nepal?
Book a confidential consultation to assess eligibility, structure options, timelines, and compliance requirements tailored to NRNs and expatriates.

Frequently Asked Questions

Can NRNs own 100% of a company in Nepal?

Yes. NRNs can own up to 100% equity in most permitted sectors, subject to foreign investment approval.

Can foreigners register a business in Nepal without living there?

Yes. Physical presence is not mandatory. Authorized representatives can complete the process.

What is the minimum investment for foreign company registration in Nepal?

The standard minimum foreign investment is NPR 20 million for most sectors.

Is profit repatriation allowed for foreign-owned companies?

Yes. Profits and capital can be repatriated after tax clearance and regulatory approvals.

Which business structure is best for expats?

For most expats, a private limited company with foreign investment is the most flexible and scalable option.