Company incorporation Nepal is becoming a strategic move for foreign companies seeking cost efficiency, skilled talent, and access to South Asia. Nepal offers a growing digital workforce, improving ease of doing business, and strong legal protections for investors.
If you are a foreign founder, SME, or multinational exploring Nepal, this guide gives you a complete, practical, and legally accurate roadmap. You will learn the exact legal steps, required documents, timelines, and common pitfalls.
This article is written for decision-makers who want clarity, not complexity.
Nepal is no longer just a low-cost outsourcing destination. It is evolving into a structured investment market.
Key drivers include:
Competitive operating and salary costs
English-speaking, graduate-level workforce
Government-backed FDI protection under FITTA 2019
Free repatriation of profits and capital
Access to India and China via regional trade routes
For service-based, tech, consulting, and professional firms, Nepal is especially attractive.
Before starting company incorporation in Nepal, foreign companies must understand the governing laws.
Companies Act 2006 – Core incorporation law
Foreign Investment and Technology Transfer Act (FITTA) 2019
Industrial Enterprises Act 2020
Income Tax Act 2002
Labour Act 2017 & Social Security Act 2018
These laws collectively regulate ownership, taxation, employment, and investor rights.
Foreign companies can choose from several structures depending on their goals.
This is the most common option.
Can be 100 percent foreign-owned in permitted sectors
Separate legal entity
Suitable for long-term operations
Extension of the foreign parent company
No separate legal personality
Restricted business activities
Non-commercial
Used for market research and coordination
Cannot generate revenue
For most foreign investors, a Private Limited Company under FDI is the preferred model.
This is the exact process foreign companies must follow.
First, confirm whether your business sector is open to foreign investment.
Nepal maintains a Negative List, covering restricted industries such as:
Defense
Certain media businesses
Small-scale retail trade
Most IT, consulting, outsourcing, and service sectors are fully open.
The proposed company name is submitted to the Office of Company Registrar (OCR).
Requirements:
Unique name
No similarity to existing companies
No prohibited or sensitive terms
Approval usually takes 1 to 3 working days.
For foreign shareholders, FDI approval is mandatory.
Documents submitted include:
Application form
Project profile
Shareholder details
Investment amount and structure
Approval timelines typically range from 7 to 15 working days.
Once FDI approval is granted, the company is incorporated.
OCR issues:
Certificate of Incorporation
Company Registration Number
PAN eligibility
At this stage, the company legally exists.
Every company must register for tax.
This includes:
Permanent Account Number (PAN)
VAT registration if applicable
Tax registration is done at the Inland Revenue Department.
A local bank account is opened in Nepal.
Foreign investors then:
Remit capital through banking channels
Declare source of funds
Obtain capital credit confirmation
This step is critical for profit repatriation later.
After incorporation, companies must complete:
Local ward registration
Social Security Fund (SSF) enrollment
Labour office registration
This ensures full operational compliance.
Foreign companies must prepare documents carefully to avoid delays.
Certificate of Incorporation of parent company
Memorandum and Articles of Association
Board resolution approving Nepal investment
Passport copies of directors and shareholders
Power of Attorney
All foreign documents must be notarised and apostilled.
Memorandum of Association (MOA)
Articles of Association (AOA)
Share subscription agreement
Joint venture agreement, if applicable
Accuracy here prevents future legal disputes.
Nepal mandates a minimum FDI threshold.
Minimum foreign investment: NPR 20 million
Applies to equity capital, not operating expenses
This threshold is set under FITTA 2019 and may change via government notification.
Here is a realistic timeline foreign companies can expect.
| Stage | Estimated Time |
|---|---|
| Name reservation | 1–3 days |
| FDI approval | 7–15 days |
| OCR registration | 2–3 days |
| Tax and PAN registration | 2–3 days |
| Bank account & capital injection | 5–10 days |
Total estimated timeline: 3 to 5 weeks
Costs vary depending on structure and advisors used.
Government registration fees
Legal and compliance advisory fees
Notarisation and apostille costs
Bank and compliance charges
Compared to other South Asian markets, Nepal remains cost-efficient.
Company incorporation Nepal is only the beginning.
Foreign-owned companies must comply with:
Annual financial audits
Tax filings and TDS submissions
SSF contributions for employees
Annual returns to OCR
Non-compliance can result in penalties or operational restrictions.
| Factor | FDI Company | Branch Office | Liaison Office |
|---|---|---|---|
| Revenue generation | Yes | Limited | No |
| Legal entity | Separate | Extension | Extension |
| Ownership | Up to 100% foreign | Parent owned | Parent owned |
| Compliance burden | Medium | Medium | Low |
| Best for | Long-term operations | Contract execution | Market research |
This comparison helps foreign companies choose the right entry path.
Avoid these frequent errors:
Underestimating compliance workload
Incorrect document apostille
Poor capital structuring
Ignoring labour and SSF laws
Working with local experts reduces risk significantly.
Key points to know:
Corporate tax typically ranges from 25%
Withholding tax applies on salaries and services
Dividend tax applies on repatriation
Nepal has double taxation avoidance agreements with several countries.
Foreign investors are legally allowed to repatriate:
Dividends
Royalties
Loan repayments
Capital on exit
Repatriation is governed by Nepal Rastra Bank regulations and requires proper documentation.
Company incorporation Nepal involves:
Multiple government bodies
Strict document standards
Ongoing compliance obligations
Professional advisors ensure speed, accuracy, and long-term compliance.
Yes. Most sectors allow 100 percent foreign ownership, except restricted industries listed under the Negative List.
The minimum foreign investment is NPR 20 million under current FDI regulations.
Typically 3 to 5 weeks, depending on approvals and document readiness.
Yes. Nepal legally guarantees repatriation of profits and capital through banking channels.
No. However, a local authorised representative is required for regulatory purposes.
Company incorporation Nepal offers foreign companies a rare combination of affordability, talent, and legal protection. With the right structure and guidance, Nepal can become a strategic base for South Asia operations.
The key is doing it right from day one. Legal accuracy, compliant documentation, and ongoing advisory support make all the difference.
Planning company incorporation in Nepal?
Book a free consultation with our FDI and compliance specialists to assess your eligibility, structure your investment, and incorporate with confidence.