If you are planning to start a business in Nepal, setting up a Private Limited Company is the most trusted and scalable option for foreign companies. Nepal offers competitive labour costs, a growing digital economy, and full foreign ownership in many sectors. With the right structure, foreign investors can operate, repatriate profits, and scale safely.
This guide explains how foreign companies can start a business in Nepal through a Private Limited Company, covering eligibility, legal steps, costs, timelines, and compliance. It is written for founders, CFOs, and expansion leaders who want clarity without legal jargon.
A Private Limited Company is the preferred structure for foreign investors because it provides legal certainty and long-term flexibility.
Separate legal identity from shareholders
Limited liability protection
Eligibility for Foreign Direct Investment (FDI)
Ability to hire local staff directly
Easier profit repatriation compared to informal structures
Unlike liaison or branch offices, a Private Limited Company can generate revenue inside Nepal and contract with clients locally and internationally.
Foreign investors are governed by a clear statutory framework.
Companies Act, 2006
Foreign Investment and Technology Transfer Act (FITTA), 2019
Industrial Enterprises Act, 2020
Income Tax Act, 2002
Labour Act, 2017
Social Security Act, 2018
Together, these laws define how a foreign company can start a business in Nepal, inject capital, hire employees, and repatriate earnings.
Foreign individuals, companies, and NRNs can all invest, subject to sector rules.
Minimum one shareholder and one director
Shareholders can be 100% foreign nationals
Registered office address in Nepal
Sector must not fall under the restricted or negative list
Most service sectors such as IT, consulting, outsourcing, engineering, and software are fully open to foreign ownership.
You must reserve a unique name with the Office of the Company Registrar (OCR).
Names are checked for duplication and prohibited terms.
Timeline: 1–2 working days
Two core documents are required:
Memorandum of Association (MOA)
Articles of Association (AOA)
These define business activities, capital structure, director powers, and shareholder rights.
Foreign investors must obtain approval before injecting capital.
Approval authority depends on investment size:
Department of Industry (DOI)
Investment Board Nepal (IBN) for large projects
This step legally authorises you to start a business in Nepal as a foreign investor.
Once FDI approval is granted, the company is incorporated with OCR.
You receive:
Certificate of Incorporation
Company registration number
The company now legally exists in Nepal.
Foreign capital must be remitted through a Nepal-licensed bank.
Requirements include:
FDI approval letter
Share subscription details
Source of funds declaration
Funds are converted to NPR upon receipt.
The company must register for:
Permanent Account Number (PAN)
VAT (if applicable)
This enables invoicing, payroll, and tax filings.
Before operations begin, you must complete:
Social Security Fund (SSF) registration
Labour office registration
Municipal business registration
| Stage | Estimated Time |
|---|---|
| Name reservation | 1–2 days |
| FDI approval | 7–21 days |
| Company registration | 3–5 days |
| Bank capital injection | 3–7 days |
| Tax & labour registration | 5–7 days |
Total: approximately 4–6 weeks with proper documentation.
Costs vary by investment size and complexity.
Government registration fees
Legal and compliance drafting
Bank charges for capital remittance
Ongoing accounting and tax filings
Foreign investors should budget for both setup costs and annual compliance costs.
| Structure | Can earn revenue | FDI allowed | Best for |
|---|---|---|---|
| Liaison Office | No | Yes | Market research |
| Branch Office | Limited | Yes | Parent company extensions |
| Private Limited Company | Yes | Yes | Long-term operations |
| Employer of Record (EOR) | No | Not required | Quick hiring |
For most foreign companies planning scale, a Private Limited Company is the most future-proof way to start a business in Nepal.
Once operational, companies must comply with Nepal’s labour laws.
Minimum wage compliance
Social Security Fund contributions
Paid leave and public holidays
Payroll tax withholding
Foreign-owned companies are treated the same as local employers.
Nepal allows legal repatriation of:
Dividends
Royalty and technical fees
Loan repayments
Sale proceeds of shares
Repatriation requires tax clearance and bank approval but is fully lawful under FITTA 2019.
Choosing the wrong business activity classification
Delaying bank capital injection
Underestimating labour compliance
Using generic MOA/AOA templates
Ignoring annual filing deadlines
Avoiding these mistakes saves months of delay.
Annual financial statements
Annual returns to OCR
Monthly tax filings
SSF contributions
Audit by licensed auditor
Compliance is not optional and affects repatriation rights.
A Private Limited Company is ideal if you plan to:
Operate long-term in Nepal
Hire full-time local staff
Invoice clients globally
Protect intellectual property
Repatriate profits legally
If speed matters more than structure, EOR may work initially. For ownership and control, incorporation is better.
If you are planning to start a business in Nepal, professional structuring makes the difference between smooth approval and costly delays.
Book a consultation to receive a tailored incorporation roadmap, cost estimate, and compliance checklist for your sector.
To start a business in Nepal, a Private Limited Company offers the strongest legal foundation for foreign companies. It enables ownership, revenue generation, employment, and profit repatriation under a clear regulatory framework. With the right guidance, Nepal can be a strategic and cost-efficient expansion destination.
Yes. Most service sectors allow 100% foreign ownership under FDI laws.
Generally NPR 20 million for foreign investors, subject to sector rules.
Usually 4–6 weeks including FDI approval and bank formalities.
Yes. Dividends and capital can be repatriated after tax clearance.
No. Foreign nationals can act as directors.