How to start a business in Nepal: step-by-step in 2025

Planning Business registration in Nepal in 2025? You are in the right place.
This guide explains the full process for foreign investors. You will see timelines, approvals, entity choices, and compliance. The focus is practical. The style is plain. The steps are sequenced for speed and control.

What makes Nepal attractive? Strategic access to South Asia. A young workforce. Improving infrastructure. Competitive operating cost. Yet the rules are detailed. You need a clear plan. You also need the right approvals. This article gives both.

Business registration in Nepal: the 2025 snapshot

Who is this for?
Foreign companies. Overseas founders. Regional groups. Impact funds. NGOs setting up non-profit arms for social business.

Core regulators and systems

• OCR: Office of the Company Registrar.

• DoI: Department of Industry (foreign investment approvals).

• NRB: Nepal Rastra Bank (foreign investment, loans, repatriation).

• IRD: Inland Revenue Department (PAN, VAT, TDS).

• Sector bodies: telecom, insurance, energy, health, education, and others.

Key laws and guidelines 

• Companies Act, 2063 (2006) and amendments.

• Foreign Investment and Technology Transfer Act (FITTA), 2019.

• Industrial Enterprises Act, 2076 (2019/2020).

• NRB Foreign Investment and Foreign Loan directives and by-laws.

• Income Tax Act, 2058 (2002) and VAT Act, 2052 (1996) with rules.

• Labour Act, 2074 (2017) and Social Security Fund framework.

Typical timelines

• Clean domestic setup: ~10–20 working days after documents are ready.

• With FDI approvals and NRB steps: 4–8 weeks, depending on the sector.

• Add sectoral licenses: buffer 2–8 weeks more, by complexity.

Budget drivers

• Authorized capital and filing tiers.

• Translation, legalization, and notary costs.

• Bank charges, foreign remittance fees, and FX spreads.

• Sector clearances and site compliance.

Step-by-step: how foreign companies start operations in Nepal

1) Decide the right entry vehicle

Common choices

• Private limited subsidiary (Nepal company with foreign shareholding).

• Branch office of a foreign company (revenue-earning in permitted scope).

• Liaison/representative office (non-revenue, representational only).

How to choose

• Subsidiary gives flexibility and local tax residence.

• Branch suits project contracts under the parent’s umbrella.

• Liaison is for non-commercial presence, market development, or coordination.

(See the comparison table later for a deeper view.)

2) Name check and reservation (OCR)

Reserve an available name. Keep it distinctive and lawful. Avoid restricted words. Prepare 2–3 options for speed. Align with the parent brand strategy.

3) Prepare constitutional and supporting documents

For a subsidiary: draft Memorandum and Articles. Define objects, capital, and share classes. Draft board resolutions for investment. Prepare KYC for all shareholders and directors.

For a branch or liaison: supply the parent’s charter documents. Include a board resolution to open the Nepal office. Appoint a local authorized representative.

Ensure foreign documents follow Nepal’s legalization rules. Plan certified translations where needed.

4) FDI screening under FITTA 2019 

When required
Most foreign equity requires approval under FITTA. The Department of Industry reviews the investment. Some sectors need extra clearances.

What to prepare

• Application forms and project profile.

• Shareholder and director KYC.

• Source-of-funds declaration.

• Draft constitutional documents.

• If joint venture, include the JV agreement.

Notes
Restricted or sensitive sectors have special rules. Use a permitted activity description. Mirror the same description across documents.

5) NRB approval for foreign investment and fund inflow

Purpose
NRB validates the foreign investment and sets the repatriation track. This enables later profit repatriation and capital exit.

What banks expect

• DoI/FITTA approval documents.

• Investment structure details.

• Remittance purpose and incoming funds references.

Best practice
Engage a Nepal bank early. Align on SWIFT narration format. Set beneficiary instructions that match NRB’s audit trail.

6) Company incorporation at OCR

For a subsidiary

• File MOA/AOA and director consents.

• Provide registered office details and proof.

• Upload KYC and photographs as required.

• Receive the Certificate of Incorporation.

For a branch or liaison

• File authenticated parent documents.

• Appoint a local representative.

• Receive registration certificate with scope limits.

7) Tax registrations with IRD (PAN and VAT, if applicable)

PAN is mandatory for all entities.
VAT applies if your taxable turnover crosses the threshold or you operate in VAT-mandated sectors.
Set up e-TDS and e-filing access. Map HS codes if you import. Map service codes if you export.

8) Open the bank account and remit capital

Open a current account with a reputable bank.
For subsidiaries, remit capital per the approved schedule.
Keep FIRC and bank advice for each inflow.
Keep the SWIFT copy with the correct purpose codes.

9) Obtain sectoral and municipal licenses (if required)

Examples include telecom, health, education, financial services, hydropower, IT parks, and tourism.
For physical premises, confirm zoning and signage rules.
Register for local taxes if applicable.

10) Register for Labour and Social Security

Issue compliant employment contracts.
Register with the Social Security Fund where applicable.
Set up payroll, PF/SSF contributions, and leave tracking.
Adopt a clear HR handbook in line with the Labour Act.

11) Import-export and foreign trade formalities (if relevant)

Apply for export/import codes and special permits.
Check customs procedures and valuation rules.
Align incoterms, insurance, and logistics documentation.

12) Accounting, audit, and statutory books

Adopt a chart of accounts aligned with Nepal Financial Reporting Standards.
Appoint a statutory auditor if thresholds apply.
Maintain registers of members, directors, and charges.
Close books monthly for compliance control.

13) Data protection, IT, and IP hygiene

Use privacy-by-design principles.
Register trademarks early.
Secure software licenses.
Adopt Cybersecurity and vendor risk policies.

14) Ongoing governance and filings

Track filing calendars for OCR, IRD, and sector bodies.
Record board meetings and resolutions.
Update share registers after any changes.
Renew licenses before expiry.

15) Repatriation planning

Plan for dividends, management fees, or royalty flows.
Comply with withholding tax and transfer pricing rules.
Coordinate with NRB and the bank for approvals and forms.

The entire process in a numbered checklist

1. Select entry vehicle: subsidiary, branch, or liaison.

2. Run name reservation with OCR.

3. Draft MOA/AOA or branch/liaison pack.

4. Prepare FDI dossier under FITTA.

5. Secure DoI approval where required.

6. Obtain NRB approval for foreign investment.

7. Incorporate at OCR.

8. Register for PAN, and VAT if applicable.

9. Open bank account and remit capital.

10. Secure sectoral licenses and local permits.

11. Set up payroll and Social Security.

12. Configure accounting and audit scope.

13. Register IP and finalize IT policies.

14. Establish compliance calendar.

15. Plan repatriation and tax optimization.

Original insight table: choose the right Nepal entry vehicle

Use this table with your risk, cost, and timeline models.

Detailed documentation map

Identity and KYC
Passports of foreign directors and shareholders.
Parent company certificate and charter for branch or liaison.
Recent bank letters or utility bills for address proof.

Approval pack
Board resolutions.
Investment or subscription agreements.
Project profile, forecasts, and staffing plans.
Source-of-funds statements.

Constitutional and control
MOA/AOA with clear objects and share capital.
Shareholders’ agreement or JV agreement if needed.
Specimen signatures and director consents.
Registered office lease and utility evidence.

Banking and remittance
Standard account forms and KYC.
NRB approval copy and DoI approval.
SWIFT template with correct purpose narration.
FIRC and credit advice for every inflow.

Costs and time drivers 

• Capital and fee tiers: Filing fees scale with authorized capital.

• Document conditioning: Apostille, legalization, and translation add time.

• Sector clearances: Energy, finance, health, and education need longer buffers.

• Location readiness: Zoning, fire safety, and municipal rules can add steps.

• Banking queues: Pre-book KYC and arrange signatories’ presence.

• Holiday calendar: Add buffer for national holidays and exams.

Budget tips
Bundle translations.
Use digital signatures where permitted.
Create a checklist by regulator.
Set an internal “approval day zero” to align teams.

Common pitfalls to avoid 

• Vague company objects that conflict with sector rules.

• Mismatch between DoI scope and OCR MOA text.

• Wrong SWIFT purpose code for capital remittance.

• Skipping NRB approval before remittance.

• Signing leases before license clearance.

• Neglecting Social Security registration timelines.

• Missing e-TDS setup and monthly filings.

• Ignoring transfer pricing for related-party services.

Post-incorporation compliance calendar 

• Board meeting cadence and minute books.

• PAN and VAT filings per IRD cycles.

• TDS remittances and certificates.

• Annual audit appointment and planning.

• License renewals and inspections.

• Employment contracts and HR handbook refresh.

• Data and cybersecurity checks.

• IP watch and brand enforcement.

Sector examples: how steps change

IT and software services

• Emphasis on export documentation and SOF proofs.

• Possible park incentives and infrastructure norms.

Hydropower and energy

• Concession, EIA/SIA, power purchase, and local approvals.

• Longer lead times. More site compliance.

Education or health services

• Stringent licensing and facility standards.

• Staff credentialing and specialized inspections.

Financial services or insurance

• Separate regulator approvals.

• Fit and proper tests. Capital adequacy norms.

Tax and finance notes for foreign investors

• Corporate income tax applies to Nepal-source income.

• Withholding tax applies on certain cross-border payments.

• VAT applies to supplies within Nepal, as rules define.

• Transfer pricing applies to related-party transactions.

• Double tax relief may apply under applicable treaties.

• Repatriation requires tax clearance and NRB compliance.

Keep contemporaneous documentation.
Price intercompany services at arm’s length.
Retain copies of approvals and SWIFT records.

Governance, risk, and internal controls (GRIC) starter pack

• Delegation of authority matrix.

• Two-signatory bank rule for payments.

• Vendor due diligence checklist.

• Contract templates with Nepal law clauses.

• Register of related-party transactions.

• Incident and complaint handling SOP.

• Annual compliance training for staff.

Plain-language citations 

• Companies Act, 2063 (2006), with amendments.

• Foreign Investment and Technology Transfer Act, 2019.

• Industrial Enterprises Act, 2076 (2019/2020).

• Nepal Rastra Bank foreign investment and foreign loan directives/by-laws.

• Income Tax Act, 2058 (2002) and VAT Act, 2052 (1996), with rules.

• Labour Act, 2074 (2017) and Social Security framework.

These are the governing sources your advisors will use.
Use the exact titles in your internal checklists and board papers.

FAQs 

1) Can a foreigner own 100% of a Nepal company?
Yes, in many sectors. Some sectors are restricted or capped. Always check FITTA schedules and any sector regulator rules before you invest.

2) How long does Business registration in Nepal take?
A clean foreign-owned subsidiary usually takes 4–8 weeks. This includes DoI and NRB steps. Complex sectors, site licenses, and holidays extend timelines.

3) Do I need a local director or shareholder?
A local director is not always required. Local representation helps with filings and banking. Some sectors or banks prefer local signatories.

4) What is the difference between a branch and a subsidiary?
A branch is the parent company’s extension. A subsidiary is a separate Nepal legal person. Tax, governance, and flexibility differ by choice.

5) How do I repatriate profits from Nepal?
Declare dividends or service fees after tax clearances. Use the NRB channel with proper documents. Keep FIRC and board approvals ready.