How to Register a Company in Nepal: Insights from Legal Experts

How to register a company in Nepal is one of the most common questions foreign founders and international businesses ask when exploring South Asia. Nepal offers a strategic location between India and China, competitive labor costs, and a growing service and tech ecosystem.

However, company registration in Nepal is highly procedural. Foreign investors must align company law, foreign investment rules, tax registration, and sector approvals. Missing one step can delay market entry by months.

This expert-led guide explains how to register a company in Nepal legally, efficiently, and compliantly. It is written specifically for foreign companies and overseas promoters planning long-term operations.

Why Foreign Companies Choose Nepal

Nepal is no longer just a tourism or remittance-driven economy. It is increasingly attractive for:

• IT and software development

• Outsourcing and shared service centers

• Manufacturing and light industry

• Consulting, engineering, and professional services

Key advantages include:

• Competitive salary structures

• English-speaking workforce

• Government-backed foreign investment framework

• Full profit repatriation (subject to compliance)

According to government data, Nepal receives hundreds of approved foreign investment projects each year, especially in IT and services.

Legal Framework Governing Company Registration in Nepal

Foreign companies must comply with several interlinked laws.

Core legislation you must know

• Companies Act 2006

• Foreign Investment and Technology Transfer Act 2019

• Industrial Enterprises Act 2020

• Income Tax Act 2002

Company incorporation is administered by the Office of the Company Registrar.

Foreign investment approval is issued by Department of Industry or IBN, depending on project size.

Types of Companies Foreigners Can Register in Nepal

Choosing the right structure is critical. Most foreign companies choose one of the following.

1. Private Limited Company (Most Popular)

This is the preferred option for long-term operations.

• Minimum 1 shareholder

• Can be 100% foreign-owned (sector permitting)

• Separate legal entity

• Eligible for profit repatriation

2. Branch Office

Suitable for executing parent-company contracts.

• No separate legal personality

• Limited permitted activities

• Higher compliance scrutiny

3. Liaison Office

Used for market research and coordination only.

• Cannot generate revenue

• Restricted operational scope

Comparison: Which Structure Is Right for You?

Expert insight:
For most foreign companies, a Private Limited Company provides the best balance of control, scalability, and compliance.

Step-by-Step: How to Register a Company in Nepal

Here is the legally correct process followed by professionals.

Step 1: Name Reservation

• File name application with OCR

• Ensure name uniqueness and compliance

• Approval usually within 1–2 working days

Step 2: Prepare Constitutional Documents

You must draft:

• Memorandum of Association (MOA)

• Articles of Association (AOA)

These define your capital, objectives, and governance.

Step 3: Foreign Investment Approval

Foreign shareholders must obtain approval under FITTA.

This includes:

• Investment amount

• Shareholding structure

• Business activities

• Source of funds

Approval is issued by the Department of Industry or IBN.

Step 4: Company Incorporation at OCR

Once FDI approval is granted:

• Submit MOA and AOA

• File shareholder and director details

• Receive Certificate of Incorporation

Step 5: Tax and Statutory Registrations

After incorporation:

• PAN registration with Inland Revenue

• VAT registration (if applicable)

• Local ward office registration

Documents Required to Register a Company in Nepal

Foreign companies must prepare both local and overseas documents.

Key documents checklist

• Passport copies of shareholders and directors

• Board resolution from parent company

• Power of Attorney (notarized and apostilled)

• Proposed MOA and AOA

• FDI application forms

Tip: Incomplete or improperly notarized documents are the #1 cause of delays.

Minimum Capital Requirements for Foreign Companies

Nepal mandates a minimum foreign investment threshold.

• Current minimum FDI: NPR 20 million

• Capital must be remitted through formal banking channels

• Funds must be verified by Nepal Rastra Bank

Capital can be injected in phases, subject to approval.

How Long Does It Take to Register a Company in Nepal?

Timelines vary based on preparedness.

Total average timeline: 3–6 weeks

Common Mistakes Foreign Companies Make

Avoid these costly errors.

1. Choosing the wrong company structure

2. Underestimating FDI approval timelines

3. Incorrect business objectives in MOA

4. Non-compliant fund remittance

5. Ignoring post-registration obligations

Post-Registration Compliance Obligations

Registering the company is only the beginning.

Foreign companies must comply with:

• Annual returns filing

• Tax filings and audits

• Social Security Fund enrollment

• Labor law compliance

• Foreign currency reporting

Non-compliance can trigger fines or repatriation restrictions.

Can Foreigners Own 100% of a Company in Nepal?

Yes, in most permitted sectors.

However:

• Some sectors are restricted or capped

• Sectoral approvals may apply

• Negative list under FITTA must be reviewed

Professional due diligence is essential before investment.

Costs to Register a Company in Nepal

Costs include:

• Government registration fees

• FDI approval charges

• Legal and advisory fees

• Notarization and translation costs

Expert range: USD 2,000–5,000 depending on complexity.

Frequently Asked Questions (People Also Ask)

Can a foreigner register a company in Nepal remotely?

Yes. Foreigners can complete company registration using a Power of Attorney. Physical presence is not mandatory.

Is local director mandatory in Nepal?

No. Nepal does not mandate a local director, but a local authorized representative is recommended.

Can profits be repatriated outside Nepal?

Yes. Profits, dividends, and capital can be repatriated after tax compliance and NRB approval.

What is the minimum number of shareholders required?

A private limited company requires at least one shareholder and one director.

Is Nepal suitable for outsourcing and IT companies?

Yes. Nepal is increasingly popular for IT, BPO, and professional outsourcing operations.

Why Expert Guidance Matters

Nepal’s company registration process combines company law, FDI policy, tax law, and banking compliance. Each authority works independently.

Legal experts help you:

• Choose the correct structure

• Avoid regulatory delays

• Secure faster approvals

• Ensure long-term compliance

Conclusion

Understanding how to register a company in Nepal is essential for foreign companies planning sustainable operations. Nepal offers strong potential, but success depends on compliance, structure, and execution.

With the right legal strategy, foreign businesses can enter Nepal confidently and scale efficiently.

Call to Action

Planning to register a company in Nepal as a foreign investor?
Speak with our Nepal incorporation and FDI specialists today for a compliant, end-to-end setup.