How to Register Your Company with Nepal’s Office of the Company Registrar

Registering a company in Nepal is a multi-step procedure involving legal, administrative, and compliance considerations. The Office of the Company Registrar (OCR) is the central authority responsible for issuing Certificates of Incorporation, scrutinising Memorandum and Articles of Association, and ensuring that new businesses meet local regulatory benchmarks. This guide outlines the step-by-step registration process, the required documentation, and key compliance tips to help foreign investors establish a successful presence in Nepal.

1. Preliminary Steps Before Registration

1.1 Feasibility Study and Business Plan

Engaging in a thorough feasibility study is vital for any foreign enterprise venturing into Nepal:

• Market demand and potential competitors
• Required capital and financial forecasts
• Assessment of regulatory obligations (sector-specific rules, licensing needs, etc.)

This initial groundwork helps shape your company’s operational blueprint and streamlines subsequent registration steps.

1.2 Selecting an Appropriate Business Structure

Nepali law allows foreign investors to incorporate under various forms, primarily:

• Private Limited Company
• Public Limited Company
• Branch or Liaison Office (for specific business purposes)

Each structure has distinct capital requirements, corporate governance norms, and regulatory obligations. Most foreign enterprises opt for a Private Limited Company due to comparatively simpler compliance mandates.

2. Regulatory Bodies Involved

While the Office of the Company Registrar (OCR) is the main authority for legal registration, other agencies often come into play:

1. Department of Industry (DoI) or Investment Board Nepal (IBN) for foreign investment approvals
2. Nepal Rastra Bank (NRB) for regulating inbound foreign capital, repatriation, and currency transactions
3. Inland Revenue Department (IRD) for tax registrations (PAN, VAT) and compliance

Ensuring coordination with these entities from the outset avoids unnecessary delays.

3. Step-by-Step Registration Process

Step 1: Name Reservation

1. Online Application: Propose a unique company name via the OCR’s online portal.
2. Name Verification: The Registrar checks for name conflicts and legal feasibility.
3. Confirmation: Secure the approved name reservation certificate for further steps.

Tip: It’s best to submit multiple name options in case your first choice is already taken or deemed non-compliant.

Step 2: Drafting the Memorandum and Articles of Association

These foundational legal documents outline:

• Company Objectives (scope of activities)
• Shareholding Structure (authorised, issued, and paid-up capital)
• Directors’ Powers and Responsibilities
• Operational Framework and Governance

For foreign entities, ensure alignment with Nepal’s Companies Act 2006 and Foreign Investment and Technology Transfer Act (FITTA) 2019 if applicable.

Step 3: Submitting Registration Documents

Compile and submit the following to the OCR:

1. Memorandum of Association (MoA) and Articles of Association (AoA)
2. Name Reservation Certificate
3. Shareholder and Director Details (passport copies for foreign nationals, proof of address)
4. Power of Attorney (if any) authorising local representatives
5. Project Description or Feasibility Report (if mandated by sectoral regulations)

The OCR will conduct a thorough review to ensure accuracy and legality.

Step 4: Payment of Registration Fees

Nepal’s registration fees depend on your company’s authorised capital. Payment can be made via:

• Bank Deposit at designated government banks
• Online Payment (if facilitated by OCR’s system)

Collect and retain payment vouchers as proof, as you’ll need them during document submission.

Step 5: Certificate of Incorporation Issuance

Once the OCR validates your documents and fees:

1. Certificate of Incorporation is issued.
2. Company Registration Number is assigned for legal and administrative reference.
3. Digitally Signed Certificate may be provided if OCR’s online system supports e-certificates.

At this point, your company is officially incorporated under Nepali law.

4. Post-Registration Obligations

4.1 Tax Registration

1. Permanent Account Number (PAN): Mandatory for all companies to file returns and conduct financial transactions.
2. Value Added Tax (VAT): Required if annual turnover surpasses NPR 2 million. Registration with the Inland Revenue Department (IRD) is crucial to avoid penalties.

4.2 Social Security Fund (SSF) Registration

Companies employing local staff must enroll in the Social Security Fund, contributing as per government-issued guidelines.

4.3 Nepal Rastra Bank (NRB) Compliance

For foreign-invested companies:

• Foreign Currency Inflows: Documentation of capital inflow, equity, or loan-based.
• Repatriation: Adherence to NRB guidelines on profit, dividend, or royalty repatriation.

4.4 Statutory Audits

Nepal follows Nepal Financial Reporting Standards (NFRS), closely aligned with IFRS:

• Annual Audit by a licensed auditor recognised by the Institute of Chartered Accountants of Nepal (ICAN).
• Filing of Audited Financial Statements with OCR and IRD.

Failure to meet statutory deadlines can result in fines or even license revocation.

5. Common Challenges and How to Overcome Them

1. Name Rejections:
   - Ensure the proposed name doesn’t clash with existing trademarks or company titles.
2. Incomplete Documentation:
   - Employ a detailed checklist of requirements; double-check that all attachments (passport copies, local address proofs) are up-to-date.
3. Delays in Government Approvals:
   - Preempt bureaucratic slowdowns by monitoring each stage closely and maintaining clear communication with OCR and other authorities.
4. Sector-Specific Restrictions:
   - Some industries (e.g., banking, telecom, aviation) impose higher capital requirements or additional licensing. Research thoroughly beforehand.

Frequently Asked Questions (FAQ)

1. How long does it take to register a company with the OCR?

It generally takes 2–8 weeks, depending on the completeness of your documents, the complexity of your business, and government processing times.

2. Do foreign shareholders need to be physically present during incorporation?

Not necessarily. You can appoint a Power of Attorney holder or authorized representative to handle documentation. However, original IDs or notarized copies may be required.

3. Is there a minimum capital requirement for foreign-owned companies?

Under FITTA 2019, the minimum threshold is USD 50,000, although certain industries mandate higher capital obligations.

4. Can I register for tax (PAN, VAT) simultaneously with OCR registration?

These registrations are separate processes. Post-incorporation, you must apply to the Inland Revenue Department (IRD) for PAN, followed by VAT if required.

5. What if I need to repatriate profits or dividends abroad?

You must comply with Nepal Rastra Bank (NRB) guidelines, which require submitting audited financial statements, tax clearances, and appropriate forms to authorize profit repatriation.

Conclusion

Navigating the registration process at Nepal’s Office of the Company Registrar requires meticulous documentation, an understanding of local legal frameworks, and an awareness of post-incorporation obligations. By diligently following the steps outlined above—and seeking expert guidance when needed—foreign investors can establish a compliant, growth-oriented entity in Nepal.

At Digital Consulting Ventures, our team of legal, accounting, and market specialists guide foreign enterprises through the entire company registration process. From feasibility studies to post-registration compliance, we ensure a seamless experience tailored to your business objectives in Nepal.