Foreign company registration in Nepal is no longer a niche move. It is a strategic expansion decision. Nepal offers competitive labor costs, strong English proficiency, and full foreign ownership in many sectors. With the right legal structure, foreign companies can operate compliantly and repatriate profits.
This guide explains how to register a foreign company in Nepal legally. It covers entity options, FDI approvals, timelines, costs, and compliance. The content is written for founders, CFOs, and international executives planning market entry.
Nepal has emerged as a serious destination for international expansion. Key drivers include:
Cost-efficient skilled workforce
Liberalized foreign direct investment (FDI) regime
Access to South Asian markets
Government focus on IT, services, and manufacturing
Foreign companies commonly enter Nepal for outsourcing, shared services, technology development, and regional support functions.
Foreign investment and company registration are governed by a clear legal framework.
Key legislation includes:
Foreign Investment and Technology Transfer Act
Companies Act
Industrial Enterprises Act
Income Tax Act
Nepal Rastra Bank regulations
Together, these laws define who can invest, how entities are registered, and how capital is repatriated.
Foreign companies can choose different entry models based on control, revenue intent, and risk profile.
This is the most common structure for foreign companies.
Key features:
Up to 100% foreign ownership
Can generate revenue locally
Can hire staff directly
Eligible for profit repatriation
Best for long-term operations and scaling.
A branch is an extension of the foreign parent.
Key features:
No separate legal personality
Can conduct commercial activities
Parent company bears liability
Best for companies executing specific projects.
A liaison office is strictly non-commercial.
Key features:
No revenue-generating activities
Limited to marketing and coordination
Funded entirely by parent company
Best for market research and relationship building.
An EOR allows hiring staff without entity registration.
Key features:
No FDI approval required
Fastest market entry
Not suitable for revenue operations
Best for testing Nepal before committing to registration.
| Criteria | FDI Company | Branch Office | Liaison Office | EOR |
|---|---|---|---|---|
| Legal entity | Separate | Extension | Extension | No entity |
| Revenue allowed | Yes | Yes | No | No |
| FDI approval | Required | Required | Required | Not required |
| Hiring employees | Yes | Yes | Limited | Yes |
| Setup time | 4–8 weeks | 3–6 weeks | 3–5 weeks | 1–2 weeks |
| Best for | Long-term scale | Projects | Market entry | Pilot teams |
Nepal maintains a negative list. Some sectors restrict or prohibit foreign investment.
Always confirm eligibility under FITTA before proceeding.
FDI approval is submitted to the Department of Industry.
Required documents include:
Parent company incorporation certificate
Board resolution approving Nepal investment
Project report and financial projections
Passport copies of foreign shareholders
Once approved, DOI issues an FDI Approval Letter. This is the legal basis for company registration.
Company registration is completed with the Office of the Company Registrar.
This step legally creates the Nepal entity.
Approved capital must be remitted through a Nepali bank and certified by Nepal Rastra Bank.
After incorporation:
PAN and VAT registration
Social Security Fund enrollment
Local ward registration
Minimum FDI thresholds depend on sector and investment type.
General guidance:
NPR 20 million minimum for most service and trading companies
Higher thresholds may apply for manufacturing
Capital can be injected in tranches, subject to approval terms.
Typical timelines for foreign company registration in Nepal:
FDI approval: 2–4 weeks
Company registration: 1–2 weeks
Bank and tax setup: 1–2 weeks
Delays often occur due to incomplete documentation or unclear project scope.
Key tax considerations include:
Corporate income tax at standard rates
Withholding tax on dividends
Transfer pricing compliance for related-party transactions
Nepal allows repatriation of dividends, capital, and royalties, subject to tax clearance and NRB approval.
Foreign companies must maintain strict compliance.
Core obligations include:
Annual financial statements
Tax filings and audits
SSF and payroll compliance
Industry-specific reporting
Non-compliance can delay repatriation and future approvals.
Avoid these frequent errors:
Choosing the wrong entity type
Underestimating compliance costs
Poorly drafted project reports
Informal payroll arrangements
Professional guidance significantly reduces risk.
Nepal’s regulatory system is documentation-driven. Authorities expect precision.
Working with a local specialist ensures:
Faster approvals
Reduced compliance risk
Bank-ready documentation
Smooth profit repatriation
Yes. Most sectors allow 100% foreign ownership, except restricted industries listed under FITTA.
Typically 4–8 weeks, depending on sector and document readiness.
Yes. Profits, dividends, and capital can be repatriated after tax clearance and NRB approval.
No. Foreign nationals can be directors. A local authorized representative is usually required.
Yes, once the company is registered and enrolled with SSF and tax authorities.
Foreign company registration in Nepal is a structured and legally secure process when done correctly. With the right entry model, compliant documentation, and ongoing support, Nepal offers strong long-term value for foreign investors.
Whether you are setting up an FDI company, branch office, or starting with an EOR, informed decisions make all the difference.
Ready to register your foreign company in Nepal with confidence?
Book a free consultation to assess the best entry structure, timelines, and compliance roadmap for your business.