If you plan to incorporate a company in Nepal, timing has never been better. Nepal offers competitive operating costs, a young English-speaking workforce, and a clear legal framework for foreign investors. For startups and international founders, Nepal can function as a cost-efficient innovation hub, regional delivery center, or long-term growth market.
This guide is written specifically for foreign companies and startup founders. It explains the legal process, investment rules, timelines, and compliance obligations in plain English. By the end, you will know exactly how to incorporate a startup in Nepal, avoid regulatory mistakes, and structure your entry for growth.
Nepal has quietly become attractive for early-stage and scaling startups.
Competitive salary and operating costs
Large pool of tech, finance, and operations talent
English widely used in business
100 percent foreign ownership allowed in most sectors
Profit and capital repatriation permitted under law
Foreign investment is governed by the Foreign Investment and Technology Transfer Act (FITTA) 2019 and the Companies Act 2006. These laws provide:
Equal treatment for foreign and domestic investors
Protection against nationalisation
Guaranteed repatriation of profits, dividends, and capital
This legal clarity reduces risk for new founders entering Nepal.
To incorporate a company in Nepal, you formally register a legal entity with the Office of the Company Registrar (OCR) and, where applicable, secure foreign investment approval from the Department of Industry (DOI).
Most foreign startups choose a Private Limited Company, which allows:
Separate legal identity
Limited liability
Full operational freedom
Employment of local and foreign staff
Best for startups and foreign-owned operating companies.
Key features:
1 to 101 shareholders
Limited liability
Can be 100 percent foreign-owned
Requires FDI approval if foreign capital is involved
Suitable for foreign companies executing specific contracts.
Limitations:
Cannot conduct full commercial activities
Tied to parent company scope
Used only for market research or representation.
Limitations:
No revenue generation
No commercial transactions
Nepal maintains a Negative List under FITTA 2019. Sectors like defence, retail trade, and small local services may be restricted.
Most startup-friendly sectors are open:
IT and software
SaaS and platforms
Consulting and professional services
Manufacturing
Education and training
Fintech and data services (subject to approvals)
Foreign investors must invest at least NPR 20 million (approx. USD 150,000) per FITTA guidelines.
You will define:
Authorized capital
Issued capital
Paid-up capital
Shareholding ratios
This structure becomes legally binding.
You submit proposed names to the OCR portal.
Approval usually takes:
1 to 3 working days
Names must:
Be unique
Not infringe trademarks
Reflect permitted business activities
Key documents include:
Memorandum of Association (MOA)
Articles of Association (AOA)
Shareholder details
Director details
Registered office address
These documents define governance, voting rights, and control.
Foreign founders must apply to:
Department of Industry (DOI) or
Investment Board Nepal (IBN) for large investments
Approval timeline:
15 to 30 working days
This approval is mandatory before capital inflow.
Once FDI approval is granted:
OCR issues Certificate of Incorporation
Company becomes a legal entity
This step finalises your decision to incorporate a company in Nepal.
You must:
Open a local bank account
Bring foreign capital through formal banking channels
Obtain bank confirmation letters
Capital injection is monitored by Nepal Rastra Bank (NRB).
Mandatory registrations include:
Permanent Account Number (PAN)
VAT registration (if applicable)
Social Security Fund (SSF) enrollment
Local ward registration
| Stage | Estimated Time |
|---|---|
| Name approval | 1–3 days |
| FDI approval | 15–30 days |
| Company registration | 3–5 days |
| Bank account & capital | 7–14 days |
| Tax & labor registration | 3–7 days |
Average total: 4 to 6 weeks
Registration fees (based on capital)
FDI processing fees
PAN and VAT registration
Legal drafting
FDI advisory
Compliance structuring
Costs vary by complexity, sector, and capital size.
Foreign-owned companies must maintain ongoing compliance.
Financial statements
Tax filings
Audit reports
Company renewals
Payroll tax deductions
SSF contributions
VAT filings (if applicable)
Failure to comply can lead to penalties or repatriation delays.
Key laws include:
Labour Act 2017
Social Security Act 2018
Minimum wages
Paid leave and holidays
SSF contributions (31 percent combined)
Written employment contracts
Nepal’s labor framework strongly protects employees.
Under FITTA 2019, foreign investors may repatriate:
Dividends
Profits
Loan repayments
Capital on exit
Royalties and technical fees
Repatriation requires:
Tax clearance
NRB approval
Proper documentation
Choosing an incorrect business scope
Underestimating compliance requirements
Improper capital injection procedures
Weak shareholder agreements
Ignoring labor law obligations
Professional guidance reduces these risks significantly.
| Factor | Nepal | India | Bangladesh |
|---|---|---|---|
| Foreign ownership | Up to 100% | Sector-based | Restricted |
| Minimum capital | NPR 20M | No minimum | Variable |
| Labor cost | Low | Medium | Low |
| Compliance complexity | Moderate | High | Moderate |
| Repatriation | Guaranteed | Regulated | Regulated |
Nepal offers a balance of flexibility and legal certainty.
Nepal is ideal if you want:
A delivery or operations hub
A development center
A cost-efficient shared services office
A long-term South Asian presence
It may not suit purely consumer retail startups.
Yes. Nepal allows 100 percent foreign ownership in most sectors under FITTA 2019, except restricted industries listed on the Negative List.
Foreign investors must invest at least NPR 20 million as paid-up capital for FDI-based companies.
The full process usually takes 4 to 6 weeks, including FDI approval, registration, and capital injection.
Yes. Profits, dividends, and capital can be repatriated after tax clearance and NRB approval.
No. Foreign nationals can serve as directors, though local compliance support is strongly recommended.
To incorporate a company in Nepal is to gain access to a legally secure, cost-efficient, and fast-growing market. With proper planning, Nepal can support your startup from early traction to regional scale. The key lies in correct structuring, regulatory compliance, and professional execution from day one.
If you are considering Nepal for your next venture, our team supports foreign founders end-to-end.
Book a free consultation to:
Validate your sector eligibility
Structure FDI correctly
Incorporate and become operational faster