If you plan to incorporate a company in Nepal, this guide gives you a precise, practical path from market entry decision to your first compliant invoice. We explain FDI approvals, Office of the Company Registrar (OCR) filings, PAN/VAT registrations, labor and Social Security Fund (SSF) setup, and annual compliance. The sequence is clear. The language is simple. The steps are built for foreign founders and in‑house counsels.
What you will get:
A clear map of entry structures and how to choose one.
A step‑by‑step incorporation workflow, with dependencies.
A full documents checklist for FDI and non‑FDI.
Practical tips on banking, capital, tax, payroll, and sector licenses.
A first‑year compliance calendar and a comparison table.
Choose your entry structure. Private Limited (subsidiary) is most common. Branch works for project‑based operations. Liaison is non‑commercial.
Confirm sector openness and route. Check the negative list and whether your activity uses the automatic route or standard approval.
Reserve the company name at OCR. Prepare 2–3 options with aligned objects.
Draft constitutional documents. Prepare MOA/AOA, resolutions, and any Power of Attorney. Translate and notarize where required.
Obtain FDI approval (if foreign shareholding). Apply to Department of Industry (DoI) or Investment Board Nepal (IBN) depending on amount/sector.
File incorporation at OCR. Submit forms, MOA/AOA, address proof, KYC, and approvals.
Open a bank account and inject capital. Keep Foreign Inward Remittance (FIR) advice and credit notes.
Register for PAN and VAT. Do this before invoicing. Map HS/SAC codes to your services/goods.
Set up payroll, labor, and SSF. Register as an employer, configure payroll tax and contributions.
Secure sectoral or local licenses. Telecom, healthcare, education, import/export, municipal trade license, and others as applicable.
Adopt accounting policies and filing calendars. Plan audits, annual returns, withholding, and VAT filings.
Best for: Full operations, local contracting, and hiring at scale.
Ownership: Foreign shareholding permitted in most sectors (subject to negative list and sector norms).
Tax: Corporate income tax on profits. VAT applies if you exceed thresholds or choose to register.
Governance: Board of directors, statutory registers, and annual returns.
Pros: Clear legal personality; easier vendor/customer onboarding; normal banking.
Cons: More filings than a liaison; formal audit and tax workload.
Best for: Short to mid‑term projects where you need local contracts without a separate entity.
Scope: Income‑generating activities allowed within the licensed scope.
Tax: Taxed on Nepal‑sourced profits as a permanent establishment.
Pros: Maintains foreign company identity; can be quicker for specific projects.
Cons: Narrower scope than a subsidiary; parent liable; exit needs clear closure steps.
Best for: Market research, partner coordination, training, and quality control.
Scope: No local sales or revenue contracts; no commercial invoicing.
Tax: Minimal direct tax; payroll taxes apply if employing.
Pros: Quick setup; lean structure.
Cons: Cannot sell or issue invoices; upgrade needed for commercial activity.
| Factor | Private Limited Subsidiary | Branch Office | Liaison Office |
|---|---|---|---|
| Legal personality | Separate Nepali company | Extension of foreign company | No separate legal personality |
| Can generate revenue in Nepal? | Yes | Yes (as authorized) | No |
| Typical use cases | Long‑term operations, hiring, scaling | Project execution, contracting with clients | Research, representation, coordination |
| Approvals | FDI approval if foreign shareholding | Branch registration + permissions | Registration/permission with OCR/DoI as required |
| Tax profile | CIT on profits; VAT as applicable | Nepal‑sourced profit taxed as PE | Mostly payroll‑related if staff |
| Setup speed | Medium | Medium | Fast |
| Exit path | Share transfer/liquidation | Close branch; settle liabilities | Close liaison; settle staff |
Companies Act 2063 (2006): Governs incorporation, management, and filings with the Office of the Company Registrar (OCR).
Foreign Investment and Technology Transfer Act (FITTA) 2019: Sets foreign investment permissions, thresholds, and the negative list.
Foreign Investment and Technology Transfer Rules (FITTR): Implements FITTA and procedural details.
Approving bodies: Department of Industry (DoI) handles most approvals. Investment Board Nepal (IBN) handles large/strategic projects under set thresholds.
Tax authorities: Inland Revenue Department (IRD) for PAN and VAT.
Labor & benefits: Labor laws and the Social Security Fund (SSF) for employer registration and contributions.
Draft MOA/AOA with clear objects and share capital.
Board resolutions from parent/owners authorizing incorporation and signatories.
Power of Attorney for local representative (if needed).
Registered office confirmation and utility proof.
KYC: Passports for foreign directors/shareholders; local IDs for Nepali directors; photos.
Shareholder chart and beneficial ownership details.
FDI‑specific attachments
FDI application with sector, amount, and route.
Business plan with 3–5 year projections.
Source of funds declaration and bank reference letter.
Technology transfer/IP license if relevant.
Organizational chart and governance model.
PAN: COI, MOA/AOA, address proof, contact details, signatory ID.
VAT: Activity codes, turnover basis, invoice format, bank details.
SSF: Employer registration form, incorporation documents, and employee list when hiring.
Check the negative list. Confirm your activity is open for FDI.
Determine if the automatic route applies to your sector and size.
Align HS/SAC codes for invoicing and import/export from day one.
Prepare 2–3 names consistent with your objects.
Avoid conflicts with existing names and trademarks.
Complete reservation through the OCR portal and keep receipts.
Define objects and sub‑activities clearly.
Set authorized and paid‑up capital.
Prepare POA and board resolutions. Arrange translations and notarizations.
File at DoI or IBN based on thresholds.
Include ownership chart, source of funds, and projections.
Respond quickly to clarifications to stay on timeline.
Submit forms, MOA/AOA, address proof, KYC, and FDI approval letter.
Pay fees. Track application status until Certificate of Incorporation is issued.
Open a current account. Complete KYC.
Bring capital as approved. Keep FIR and credit notes for audit and repatriation.
Register for PAN. Register for VAT if your activity/turnover requires or you want input credit.
Configure e‑filing for VAT and withholding.
Register as an employer with SSF.
Prepare compliant employment contracts and policies.
Configure payroll taxes and payslips.
Apply for any sector licenses (telecom, healthcare, education, trading/import/export) and local municipal registrations.
Adopt an accounting policy and chart of accounts.
Set monthly VAT/withholding cycles and annual return schedules.
Plan for audit, AGM, and board meetings.
Name reservation: 1–3 business days after clean submission.
FDI approval: Automatic route is faster. Standard reviews take longer depending on sector.
OCR incorporation: Often within a week after complete filing.
PAN/VAT: Usually a few days once incorporation is confirmed.
SSF employer registration: Often 1–3 days after account creation.
Sectoral licenses: Vary by regulator; run in parallel once core approvals start.
Capital inflow: Use approved channels and designate purpose codes. Match inflow to the approval letter and subscription.
Evidence: Keep FIR, bank credit note, and subscription records for audits.
Repatriation: Plan for dividend tax, board resolutions, audited accounts, and tax clearance before outward remittance.
Foreign loans and royalties: Map approvals and pricing policies up front.
PAN: Required for all entities. Print PAN on invoices and official documents.
VAT: Register if legally required or beneficial. Many B2B firms register from day one for input VAT.
Withholding: Map supplier payments and employee taxes to correct rates.
e‑Filing: Keep credentials safe. Test your first return cycle early.
Contracts: Use compliant clauses on probation, leave, overtime, termination, and notice.
Policies: Publish HR policies and a leave calendar. Keep records.
SSF: Register employer and employees. Set monthly contributions and reconciliations.
Payroll: Automate payslips, withholding, and SSF filings.
Examples: Telecom, health, education, import/export, and e‑commerce have extra steps.
Data and consumer protection: Map privacy, data retention, and e‑commerce rules to your stack.
Cybersecurity: Adopt minimum controls for access, backups, and incident response.
| Month | Corporate | Tax | Labor/HR | Notes |
| Month 1 | Incorporation and board minutes | PAN/VAT obtained | SSF employer account live | Bank FIR archived |
| Month 2 | Statutory registers updated | First VAT cycle tested | Issue contracts and policies | Payroll calendar set |
| Quarter 1 | Board review | VAT & withholding filed | SSF contributions reconciled | Internal control checklist applied |
| Quarter 2 | AGM prep starts | Advance tax plan | HR file audit | Vendor KYC and WHT mapping |
| Quarter 3 | Pre‑audit checks | Annual tax planning note | Leave/overtime training | Risk register updated |
| Quarter 4 | AGM and annual return | Final tax computation | Year‑end payroll close | Document archive and backup |
One‑off: Translations, notarizations, legalizations, stamp duty, and application fees.
Recurring: Accounting, payroll, tax filings, annual returns, audit, and secretarial.
People: Recruitment, onboarding, training, HRIS.
Office/tech: Lease, IT, cybersecurity, bookkeeping, e‑invoicing.
Contingency: Keep a 10–15% buffer for re‑filings and extra requests.
Objects too broad in MOA. Keep them aligned to planned activity. Amend later if needed.
Skipping the negative list check. Confirm sector openness before filings.
Late SSF registration. Register before issuing employment offers.
VAT confusion. Map your SAC/HS codes and place‑of‑supply rules before billing.
Weak document control. Keep one controlled “Regulatory Pack.”
Primary keyword: Incorporate a company in Nepal.
Used in the first paragraph, this H2, the image alt tag, and the conclusion.
Synonyms and LSI terms: company incorporation, register a company in Nepal, FDI approval, OCR, DoI, IBN, PAN, VAT, SSF, negative list, automatic route, labor compliance.
Short sentences and scannable headings improve time on page.
Q1. Can a foreigner open a private limited company in Nepal?
Yes. Foreigners typically invest through a private limited subsidiary or register a branch of a foreign company. Approval depends on sector, negative list, and investment thresholds.
Q2. What is the fast track for IT or tech companies?
Check whether your project qualifies for the automatic route and whether any sector‑specific concessions apply. Keep proof of activity, code mapping, and capacity plans ready.
Q3. When do I need to register for VAT?
Register when your activity and turnover require it or when you want input VAT credits. B2B firms often register from day one for credibility and input claim.
Q4. Can a liaison office sell or sign revenue contracts?
No. A liaison is non‑commercial. It can coordinate and research but cannot invoice or execute revenue contracts in Nepal.
Q5. What documents are essential for FDI approval?
FDI form, business plan and projections, source of funds, ownership and UBO details, technology transfer agreements (if any), and relevant board resolutions.