How to Start a Foreign-Owned Tech, Consultancy, or Trading Company in Nepal

Foreign company registration in Nepal has become a strategic move for global tech firms, consultancies, and trading businesses seeking cost-efficient expansion into South Asia. Nepal offers competitive talent, improving digital infrastructure, and a clear legal framework for foreign direct investment.

Yet, the process is nuanced. Sector rules differ. Regulatory approvals matter. Structuring mistakes can delay operations for months.

This guide gives you the most authoritative, regulator-aligned, step-by-step explanation of how to legally start a foreign-owned tech, consultancy, or trading company in Nepal, with insights drawn from real FDI projects, legislation, and approval practice.

Why Foreign Companies Are Registering in Nepal

Nepal is no longer just a low-cost destination. It is an emerging strategic base.

Key advantages for foreign investors

• Access to skilled professionals in IT, finance, engineering, and support services

• Competitive salary and operating costs

• 100 percent foreign ownership allowed in most service and tech sectors

• Clear FDI protection framework under national law

• Strategic location between India and China

Foreign company registration in Nepal is particularly attractive for:

• SaaS and software development firms

• Management and professional consultancies

• Trading companies focused on import, export, or distribution

Legal Framework Governing Foreign Company Registration in Nepal

Foreign investment is governed by a structured legal regime. Understanding this is critical for compliance and EEAT credibility.

Core legislation you must align with

• Foreign Investment and Technology Transfer Act

• Companies Act

• Industrial Enterprises Act

• Income Tax Act

• Foreign Exchange Regulation Act

Regulatory oversight is primarily handled by:

• Department of Industry

• Investment Board Nepal

• Nepal Rastra Bank

What Types of Foreign-Owned Companies Can Be Registered in Nepal

Foreign company registration in Nepal depends on sector classification.

1. Foreign-Owned Tech Company in Nepal

Tech and IT services are among the most FDI-friendly sectors.

Common activities include:

• Software development

• SaaS platforms

• AI and data analytics services

• IT outsourcing and support

Ownership: Up to 100 percent foreign ownership allowed
Approval route: Department of Industry

2. Foreign-Owned Consultancy Company in Nepal

Consultancies are permitted but require clear service definitions.

Typical sectors:

• Management consulting

• Financial and accounting advisory

• Engineering and technical consulting

• HR and recruitment services

Key compliance point: Scope must avoid regulated professional licensing unless secured separately.

3. Foreign-Owned Trading Company in Nepal

Trading companies face additional scrutiny.

Activities include:

• Import and export

• Wholesale distribution

• Cross-border sourcing

Additional requirements:

• Minimum investment thresholds

• Trade-specific licenses

• Customs and VAT registration

Minimum Investment Requirement for Foreign Company Registration in Nepal

As per prevailing FDI policy:

• Minimum FDI threshold: NPR 20 million

• Applies per foreign investor, per project

• Capital must be remitted through formal banking channels

This applies equally to tech, consultancy, and trading companies unless exempted by sector-specific directives.

Step-by-Step Process: Foreign Company Registration in Nepal

Step 1: Investment and Structural Design

Before any filing, the structure must be right.

This includes:

• Entry route selection

• Shareholding and capitalization planning

• Governance and control design

• Tax and repatriation considerations

A weak structure here leads to regulatory objections later.

Step 2: FDI Approval Application

Depending on investment size:

• NPR 20 million to NPR 6 billion → Department of Industry

• Above NPR 6 billion → Investment Board Nepal

Documents include:

• Project profile

• Investment structure memorandum

• Parent company incorporation proof

• Board resolutions

Step 3: Company Incorporation in Nepal

Once FDI approval is issued:

• Company name reservation

• Memorandum and Articles of Association filing

• Registration with the Office of Company Registrar

This creates the legal Nepal entity.

Step 4: Capital Inflow and Banking Setup

After incorporation:

• Open foreign currency and local bank accounts

• Inject approved capital

• Obtain capital confirmation from Nepal Rastra Bank

No capital, no operational permissions.

Step 5: Tax, Labor, and Statutory Activation

Final registrations include:

• Permanent Account Number and VAT

• Social Security Fund enrollment

• Local municipality registration

• Sectoral licenses if applicable

Only after this is the company fully operational.

Timeline for Foreign Company Registration in Nepal

Total: Approximately 6–10 weeks with proper preparation.

Tech vs Consultancy vs Trading: Structural Comparison

This comparison helps foreign investors choose the right entry model.

Common Mistakes Foreign Companies Make

Avoid these costly errors:

1. Registering before securing FDI approval

2. Under-defining consultancy or service scope

3. Misclassifying trading activities as services

4. Injecting capital outside approved channels

5. Ignoring Social Security Fund obligations

These mistakes delay foreign company registration in Nepal and raise compliance risks.

Taxation and Profit Repatriation for Foreign-Owned Companies

Nepal allows full profit repatriation, subject to tax compliance.

Key points:

• Corporate income tax generally applies

• Dividends subject to withholding tax

• Repatriation requires NRB clearance

• Double taxation treaties may reduce tax burden

Planning tax and repatriation at the structuring stage is essential.

Why Expert Guidance Matters for Foreign Company Registration in Nepal

Foreign company registration in Nepal is not just a form-filling exercise. It is a regulatory orchestration project.

Professional advisors help with:

• Structuring defensible FDI models

• Managing regulator interactions

• Avoiding sector misclassification

• Ensuring long-term scalability

This protects both time and capital.

Frequently Asked Questions

Is 100 percent foreign ownership allowed in Nepal?

Yes. Most tech and consultancy sectors allow full foreign ownership. Some trading activities may have restrictions.

How long does foreign company registration in Nepal take?

Typically 6 to 10 weeks if documentation and approvals are well prepared.

Can a foreign company hire employees immediately?

Only after tax, labor, and Social Security registrations are completed.

Is profit repatriation guaranteed?

Yes, subject to tax compliance and approval from Nepal Rastra Bank.

Do I need to visit Nepal during registration?

Not always. With proper powers of attorney, the process can be managed remotely.

Conclusion

Foreign company registration in Nepal offers global firms a compliant, scalable, and cost-effective entry into South Asia. Tech companies, consultancies, and trading businesses can all succeed if the structure, approvals, and compliance are handled correctly from day one.

The difference between a smooth launch and regulatory delays lies in expert-led planning.

Call to Action

If you are considering foreign company registration in Nepal and want a risk-free, regulator-aligned setup, speak with a specialist advisory team before committing capital. The right structure today saves years of restructuring tomorrow.