Foreign company registration in Nepal is no longer limited to large multinationals. Today, global companies across IT, consulting, engineering, manufacturing, fintech, and professional services are opening branch offices in Nepal to access talent, reduce costs, and serve the South Asian market.
If your company wants to operate without incorporating a new local subsidiary, a branch office is often the most strategic option. It allows you to operate under your parent company’s name while remaining fully compliant with Nepali law.
This guide explains, in plain language, how to open a branch office in Nepal as a foreign company, including legal requirements, approval authorities, timelines, costs, tax implications, and compliance obligations.
A branch office is an extension of a foreign company that operates in Nepal under the same legal identity as its parent company. It is not a separate legal entity.
In Nepal, branch offices are regulated primarily under:
Foreign Investment and Technology Transfer Act 2019
Companies Act 2006
Department of Industry
Inland Revenue Department
A branch office may:
Generate revenue in Nepal
Hire local and foreign employees
Sign contracts locally
Invoice Nepali or overseas clients
Foreign companies typically choose a branch office over a subsidiary for speed, control, and lower complexity.
No minimum paid-up capital
Faster setup than a private limited company
Full operational authority
100% foreign ownership
Direct control by the parent company
IT and software development firms
Engineering and infrastructure companies
Consulting and professional services
Manufacturing liaison and sourcing operations
NGOs and international contractors
| Feature | Branch Office | Subsidiary (Pvt Ltd) | Liaison Office |
|---|---|---|---|
| Legal status | Extension of parent | Separate Nepali entity | Extension of parent |
| Revenue generation | Yes | Yes | No |
| Capital requirement | No fixed minimum | NPR 100 million for FDI | No |
| Regulatory approvals | DOI + tax | DOI + OCR | DOI |
| Taxable in Nepal | Yes | Yes | Limited |
| Best for | Active operations | Long-term presence | Market research |
Insight: If you plan to bill clients or employ staff, a liaison office will not be sufficient.
The first step in foreign company registration in Nepal for a branch office is approval from the Department of Industry (DOI).
You must submit:
Parent company registration certificate
Memorandum and Articles of Association
Board resolution approving Nepal branch
Project profile and business plan
Power of Attorney for local representative
All documents must be notarised and apostilled.
Once DOI approval is granted, the branch office is formally registered in Nepal under the Companies Act 2006.
At this stage:
Branch name is approved
Legal presence is established
Registration certificate is issued
Your branch must register for:
PAN (Permanent Account Number)
VAT, if applicable
This enables lawful invoicing, payroll processing, and tax compliance.
A Nepali commercial bank account is required to:
Receive funds from the parent company
Pay salaries and vendors
Settle taxes
Banks will request:
DOI approval letter
Branch registration certificate
PAN certificate
If you hire local staff, registration is mandatory with:
Social Security Fund
Employer contribution: 20%
Employee contribution: 11%
A realistic timeline:
Document preparation: 1–2 weeks
DOI approval: 2–4 weeks
Registration and tax setup: 1–2 weeks
Total: approximately 4–8 weeks
Delays usually occur due to incomplete documentation or improper apostille.
A branch office is treated as a permanent establishment.
Corporate income tax: 25%
VAT: 13% (if applicable)
Withholding taxes on salaries and services
Unlike subsidiaries, branch profits may be repatriated to the parent company after tax clearance.
Branch offices may legally hire:
Nepali nationals
Expatriate employees with work permits
Key obligations:
Labour contracts under Nepal Labour Act
Social Security Fund registration
Payroll tax deductions
Annual leave, sick leave, public holidays
Non-compliance exposes the parent company to direct liability.
Avoid these frequent issues:
Choosing a liaison office when revenue is planned
Underestimating employment compliance
Missing SSF registration deadlines
Poorly drafted parent company resolutions
Ignoring annual reporting obligations
Each year, your branch must:
File income tax returns
Renew registrations
Submit financial statements
Maintain statutory records
Failure may lead to penalties or cancellation.
A branch office is ideal if:
You want fast market entry
You need operational control
You do not want local shareholders
You plan to repatriate profits
If you want fundraising or local investors, a subsidiary is better.
Yes. Foreign companies may open branch offices with approval from the Department of Industry under FITTA 2019.
Typically 4 to 8 weeks, depending on document readiness and regulatory approvals.
Yes. Branch offices are taxed at 25 percent corporate income tax on Nepal-sourced income.
Yes. Branch offices can hire local and foreign employees subject to labour and immigration laws.
Yes. Profits can be repatriated after tax clearance and regulatory compliance.
Foreign company registration in Nepal through a branch office offers speed, control, and flexibility. For companies that want operational presence without forming a new entity, it is often the most efficient route.
However, compliance is strict and mistakes are costly. A well-structured setup ensures smooth operations and risk-free expansion.
Planning to open a branch office in Nepal?
Book a consultation with our foreign investment specialists to receive a compliance-first, risk-free setup plan tailored to your industry.