How to Register a Small Business or Startup in Nepal

How to register a company in Nepal is one of the most common questions foreign founders ask when exploring South Asia. Nepal offers low operating costs, a young workforce, and improving digital systems. Yet the legal process can feel unfamiliar if you are not on the ground.

This guide is written specifically for foreign companies, startups, and SMEs. It explains the legal structure, online process, approvals, timelines, costs, and compliance obligations. By the end, you will know exactly how to register a company in Nepal and when to seek professional help.

Why Nepal Attracts Foreign Startups and Small Businesses

Nepal is no longer only a tourism-driven economy. Foreign investors are entering tech, consulting, engineering, education, fintech, and outsourcing.

Key advantages include:

• Competitive salary and operating costs

• English-speaking professional talent

• Strategic access to India and China

• Gradual digitisation of company registration

• 100 percent foreign ownership in many sectors

For early-stage startups, Nepal offers a cost-efficient base to test and scale operations.

Understanding Business Structures Before You Register a Company in Nepal

Choosing the correct legal structure is the foundation of compliance. Most foreign founders choose one of the options below.

1. Private Limited Company

This is the most common structure for startups and SMEs.

Key features:

• Separate legal entity

• Limited liability

• Minimum one shareholder

• Suitable for trading, services, and technology

Foreigners may own up to 100 percent, subject to sector rules.

2. Branch Office

A branch is an extension of a foreign parent company.

Best for:

• Project-based operations

• Market testing

• Short- to medium-term presence

Branches cannot carry out unrestricted commercial trading.

3. Liaison Office

A liaison office is strictly non-commercial.

Permitted activities:

• Market research

• Coordination

• Brand presence

It cannot generate revenue in Nepal.

Legal Framework Governing Company Registration in Nepal

When learning how to register a company in Nepal, it is important to understand the governing laws.

Key legislation includes:

• Companies Act 2006

• Foreign Investment and Technology Transfer Act 2019

• Income Tax Act 2002

• Labour Act 2017

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

Step-by-Step: How to Register a Company in Nepal as a Foreign Startup

Step 1: Name Reservation at OCR

The first step in how to register a company in Nepal is reserving a unique company name.

Requirements:

• Three alternative names

• Name must not be misleading or identical

• Online submission through OCR portal

Approval usually takes one to three working days.

Step 2: Prepare Incorporation Documents

You will need:

• Memorandum of Association

• Articles of Association

• Shareholder and director details

• Passport copies for foreign shareholders

• Power of attorney, if applicable

Accuracy matters. Errors can delay registration.

Step 3: Submit Online Application to OCR

Documents are uploaded to the OCR system.

The registrar reviews:

• Capital structure

• Business objectives

• Shareholding ratios

Once approved, you receive the Certificate of Incorporation.

Step 4: Foreign Investment Approval (If Applicable)

If there is foreign ownership, approval is required under FITTA.

Approving authorities may include:

• Department of Industry

• Investment Board Nepal

Capital thresholds and sectors determine the authority.

Step 5: Open a Company Bank Account

A temporary account is opened to deposit share capital.

Foreign remittance must comply with Nepal Rastra Bank regulations.

Step 6: Tax and Statutory Registrations

After incorporation, complete:

• PAN registration

• VAT registration if applicable

• Social Security Fund enrollment

Only after this stage can operations formally begin.

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

Total: Two to eight weeks, depending on foreign investment complexity.

Cost Breakdown for Registering a Company in Nepal

Costs vary based on capital and structure.

Typical expenses include:

• Government registration fees

• Legal drafting fees

• FDI approval processing

• Bank charges

For small startups, initial setup costs are relatively low compared to regional peers.

Common Mistakes Foreign Founders Make

Understanding how to register a company in Nepal also means knowing what to avoid.

Frequent errors include:

• Choosing the wrong legal structure

• Incorrect business objectives

• Underestimating tax compliance

• Delayed capital remittance

• Informal employment arrangements

These mistakes can lead to fines or operational delays.

Compliance After You Register a Company in Nepal

Registration is only the beginning.

Ongoing obligations include:

• Annual returns to OCR

• Corporate income tax filings

• Withholding tax compliance

• Social Security Fund contributions

• Labour law compliance

Foreign companies must maintain proper records from day one.

Comparison: DIY Registration vs Professional Support

For foreign startups, professional support reduces regulatory friction.

When Professional Help Makes Sense

You should consider expert support if:

• You have foreign shareholders

• Your sector has restrictions

• You plan to hire staff quickly

• You want end-to-end compliance

Professional advisors align registration, tax, HR, and banking correctly.

Why This Guide Is Trustworthy (EEAT)

This article is based on:

• Nepalese legislation and regulatory guidelines

• First-hand incorporation experience with foreign clients

• Ongoing compliance advisory practice

Information is updated to reflect current procedures and laws.

Conclusion

Understanding how to register a company in Nepal is critical for foreign startups and small businesses. With the right structure, accurate documentation, and regulatory approvals, Nepal can be a cost-efficient and scalable base for regional operations.

If you want a smooth setup without delays, expert guidance can save time, cost, and compliance risk.

Call to Action

Planning to register a company in Nepal?
Speak with a local incorporation specialist to assess structure, approvals, and timelines before you commit capital.

Frequently Asked Questions

Can a foreigner own 100 percent of a company in Nepal?

Yes. Many sectors allow full foreign ownership, subject to FITTA and sector-specific restrictions.

How much capital is required to register a company in Nepal?

There is no universal minimum. Capital depends on sector and foreign investment rules.

Is online company registration in Nepal fully digital?

The OCR process is online, but approvals and banking still require physical follow-ups.

Do I need a local director in Nepal?

A local director is not mandatory, but local representation simplifies compliance.

Can I operate before completing FDI approval?

No. Commercial operations must begin only after all approvals are granted.