How to Register a Liaison Office in Nepal: Foreign Entity Guide

Foreign company registration in Nepal is increasingly on the radar of global firms exploring South Asia. If your goal is market research, brand presence, or government liaison without trading locally, a Liaison Office is often the smartest entry route. This guide explains, step by step, how foreign companies can register a Liaison Office in Nepal, what approvals are required, realistic timelines, costs, and compliance obligations. You will also learn when a Liaison Office is not enough and when to upgrade to a branch or FDI subsidiary.

What is a Liaison Office in Nepal?

A Liaison Office is a non-commercial presence of a foreign company in Nepal. It acts as a communication and coordination channel between the head office and Nepali stakeholders.

What a Liaison Office can do

• Market research and feasibility studies

• Brand representation and promotional activities

• Coordination with regulators, partners, and vendors

• Information gathering and reporting to head office

What it cannot do

• Generate revenue in Nepal

• Sign commercial contracts locally

• Issue invoices or receive local business income

This restriction is the core reason regulators treat Liaison Offices differently from branches or subsidiaries.

Why choose a Liaison Office for foreign company registration in Nepal?

For many first-time entrants, a Liaison Office offers speed, lower risk, and regulatory clarity.

Strategic advantages

• No minimum capital requirement

• Faster approval than a branch or FDI entity

• Lower compliance burden

• Ideal for testing the Nepali market

Typical use cases

• Technology companies exploring offshore talent

• Manufacturing firms scouting suppliers

• Professional services firms building government relationships

• NGOs and multinationals coordinating regional projects

Legal and regulatory framework

Liaison Office registration is governed by multiple authorities and statutes in Nepal.

Key regulators involved

• Department of Industry

• Nepal Rastra Bank

• Ministry of Industry, Commerce and Supplies

Governing laws and guidelines

• Foreign Investment and Technology Transfer Act, 2019

• Companies Act, 2006

• Nepal Rastra Bank Foreign Exchange Management Directives

These frameworks ensure that Liaison Offices remain non-commercial and properly funded from abroad.

Step-by-step process to register a Liaison Office in Nepal

1. Board resolution and internal approvals

The parent company must formally approve the establishment of a Liaison Office in Nepal.

Required actions

• Board resolution approving Nepal Liaison Office

• Appointment of a Chief Representative

• Commitment to fund operations from overseas

2. Application to the Department of Industry

An application is submitted to the Department of Industry with supporting documents.

Typical documents

• Certificate of incorporation of the parent company

• Memorandum and Articles of Association

• Board resolution and power of attorney

• Profile and financials of the parent company

All foreign documents must be notarised and, where required, consularised.

3. Approval from Nepal Rastra Bank

Once DoI approval is secured, the file moves to Nepal Rastra Bank for foreign exchange clearance.

NRB focuses on

• Source of funds

• Annual operating budget

• Repatriation and remittance controls

This approval allows inward remittance for operating expenses.

4. Local registration and tax setup

After regulatory approvals:

• Liaison Office registration certificate is issued

• Permanent Account Number (PAN) is obtained

• Local bank account is opened for expense management

5. Operational activation

The office can now legally operate within its permitted scope.

Activation checklist

• Lease agreement for office premises

• Hiring local staff

• Payroll and tax registrations

• Compliance calendar setup

Timeline for foreign company registration in Nepal via a Liaison Office

Timelines depend heavily on document readiness and regulatory workload.

Cost structure for a Liaison Office

A Liaison Office is cost-efficient compared to other entry models.

Typical cost components

• Government application and registration fees

• Legal and advisory fees

• Notarisation and consularisation costs

• Annual operating budget remitted from abroad

Unlike FDI subsidiaries, there is no statutory minimum capital requirement.

Liaison Office vs Branch Office vs FDI Subsidiary

This comparison helps foreign companies avoid structural mismatches.

Compliance obligations after registration

Even without commercial activity, compliance is mandatory.

Ongoing obligations

• Annual activity reporting to DoI

• Budget utilisation reporting to NRB

• Tax filings for payroll and withholding taxes

• Renewal of Liaison Office approval

Non-compliance can result in fines or revocation.

Common mistakes foreign companies make

Avoid these pitfalls

• Treating a Liaison Office as a sales office

• Underestimating document legalisation timelines

• Hiring staff before approvals

• Mixing liaison activities with revenue generation

Early advisory support prevents costly restructuring.

When should you upgrade from a Liaison Office?

A Liaison Office is a starting point, not a destination.

Upgrade triggers

• You need to sign local contracts

• You plan to invoice Nepali clients

• You want to hire at scale

• You are ready for long-term investment

At that stage, a branch or FDI subsidiary becomes appropriate.

Why professional guidance matters

Foreign company registration in Nepal involves regulatory coordination, not just form filing. Experienced advisors reduce approval risk, timelines, and compliance exposure.

An expert partner helps you

• Choose the correct entry structure

• Prepare regulator-ready documentation

• Coordinate approvals end-to-end

• Maintain long-term compliance

Call to action

Planning foreign company registration in Nepal through a Liaison Office?
Book a consultation with our Nepal market-entry specialists to receive a tailored feasibility assessment, compliance roadmap, and timeline.

Frequently Asked Questions

Can a Liaison Office earn income in Nepal?

No. A Liaison Office cannot generate revenue or issue invoices locally. All expenses must be funded from overseas remittances.

Is a Liaison Office considered foreign investment?

No. It is not treated as FDI because no equity or capital investment is made in Nepal.

How long is a Liaison Office approval valid?

Approvals are typically issued for one year and must be renewed annually based on compliance and reporting.

Can a Liaison Office hire local employees?

Yes. It can hire local staff, subject to labour laws and payroll tax compliance.

Can a Liaison Office be converted into an FDI company?

Yes. Many foreign companies later upgrade to an FDI subsidiary once commercial operations are planned.