If you plan to incorporate a company in Nepal, this guide gives you a clear, practical path. It is written for foreign companies. It explains FDI approvals, company types, bank and tax steps, and post-incorporation tasks. You will learn the sequence, documents, and pitfalls. Short sentences. Plain language. Compliant with current laws and best practice.
Entity of choice: A Private Limited Company suits most foreign investors for speed, control, and liability protection.
FDI approvals: Most foreign shareholders require approval under FITTA 2019 through the Department of Industry (DOI) or Investment Board Nepal (IBN) for very large projects, plus currency compliance with Nepal Rastra Bank (NRB).
OCR registration: Incorporation is filed at the Office of the Company Registrar (OCR) after name reservation and document prep.
Tax setup: Obtain PAN from the Inland Revenue Department (IRD); register for VAT if your activity or turnover requires it.
Post-incorporation: Open the bank account, bring in capital via formal banking channels, issue share certificates, appoint auditor, enroll for HR and Social Security where applicable, and begin statutory filings.
Indicative timeline: Commonly 3–8 weeks end-to-end for a straightforward project once documents are ready. Complex sectors or large FDI can take longer.
Indicative cost: Government fees are modest. Total budgets vary by sector and professional support. See the cost table below.
| Factor | Private Limited Company (Subsidiary) | Branch Office | Liaison (Representative) Office |
|---|---|---|---|
| Legal personality | Separate Nepalese legal entity | Same legal person as foreign parent | Not a legal person; no revenue |
| Revenue in Nepal | Yes | Yes | No (promotion, coordination only) |
| Contracts and invoicing | Company signs and invoices | Parent contracts via branch | Not permitted to invoice |
| FDI approval | Required if foreign shareholding | Sector approval plus branch permissions | Approval for establishment and scope |
| Tax profile | Corporate income tax on profits | Corporate taxation on Nepal source | No CIT on revenue (no revenue allowed) |
| Best for | Long-term operations, hiring, scaling | Limited-scope projects with parent liability | Market study, liaison, brand presence |
Tip: Most foreign SMEs choose a Private Limited Company. It balances flexibility, control, and compliance. It also simplifies banking and HR.
The steps split into FDI track (foreign shareholding) and domestic track (no foreign shareholders). If you are a foreign investor, follow the FDI track.
Shareholding split, authorized and paid-up capital.
Directors and authorized signatories.
Registered office address in Nepal.
Business activities and any sector approvals.
Fiscal year alignment and auditor approach.
Propose the company name.
Ensure it is distinct and matches business scope.
Reserve the name through the OCR system.
Keep the reservation slip for your incorporation file.
Who needs this: Any foreign shareholder or foreign parent.
What happens:
Prepare the investment proposal, project profile, and draft constitutional documents.
Apply to DOI (or IBN for very large projects).
Provide KYC documents for shareholders and directors.
Submit sector-specific approvals, if any.
Receive the Foreign Investment Approval Order.
Note on minimum FDI threshold: Nepal prescribes a minimum investment threshold for most sectors under FITTA and related rules. As of recent policy, this has been NPR 20 million for many projects, subject to change. Sensitive or regulated sectors may set higher bars. Always confirm your sector’s current threshold in advance.
Memorandum of Association (MOA).
Articles of Association (AOA).
Shareholders’ resolutions and board approvals from the parent, if applicable.
Power of Attorney for local filing, if needed.
Clear share subscription language, par value, and transfer rules.
Passports of foreign directors and subscribers.
Proof of address and recent photographs.
Board resolution from parent company with seal.
For corporate shareholders: Certificate of incorporation, constitutional documents, and good standing evidence.
Notarization or legalization where applicable.
Upload or file the complete set: MOA, AOA, name reservation slip, shareholder and director details, registered office proof, and promoter declarations.
Pay the OCR fees based on authorized capital slab.
Respond to OCR queries or clarifications.
Receive the Certificate of Incorporation.
Apply for Permanent Account Number (PAN) at IRD.
Provide incorporation certificate, MOA/AOA, director details, and office address.
VAT registration applies if your goods or services require it or when turnover thresholds are met.
Set up your tax e-account for returns and payments.
Open the company bank account.
For FDI, route equity capital via formal banking channels in the approved currency.
Bank issues inward remittance advice.
Record the investment with NRB to establish proof of equity for future repatriation of dividends or capital.
Appoint a licensed auditor.
Create a compliance calendar for company, tax, and FDI filings.
Prepare board minutes and statutory registers.
Offer letters and employment contracts aligned with the Labor Act.
Workplace policies and code of conduct.
Enroll eligible employees into the Social Security Fund (SSF).
Set up payroll, withholding tax, and leave records.
Obtain sector clearances for regulated industries.
Register local trade license where required by municipality.
Ensure environmental or technical approvals if your activity triggers them.
Issue share certificates to subscribers.
Update the statutory registers.
Complete any technology transfer or service agreements filings if applicable.
Keep copies of all approvals and remittance proofs in a master compliance file.
Corporate information
Proposed company name and business activities.
Shareholding pattern and director list.
Registered office address and contact.
Constitutional and approvals
Draft MOA and AOA.
FDI approval order (FDI track).
Board resolution from foreign parent.
Power of Attorney for filings, if used.
KYC
Passports and photos for foreign directors and shareholders.
Proof of address for directors.
Parent company incorporation documents and good standing proof.
Notarization or legalization as required.
Banking and tax
PAN application documents.
Bank account opening forms and specimen signatures.
Inward remittance advice and NRB recording (FDI).
VAT application materials, if applicable.
Document preparation: 1–2 weeks (parallel legal, KYC, and drafts).
FDI approval (if required): Often 1–3 weeks for standard cases; complex cases longer.
OCR incorporation: Many files complete in 3–7 working days after clean submission.
PAN and tax setup: 2–5 working days post-incorporation.
Bank and NRB steps: 3–10 working days once the bank KYC is complete.
HR and SSF enrollment: 1–2 weeks alongside hiring.
Total: A straightforward FDI project can complete within 3–8 weeks after documents are in order. Large or regulated projects may exceed this window.
Government fees change by capital slab and document count. Professional fees vary by scope and urgency. Use this as a planning tool.
| Cost head | What it covers | Indicative range (NPR) | Notes |
|---|---|---|---|
| Name reservation & OCR filing | Reservation and incorporation filing slabs | 5,000–35,000 | Varies by authorized capital |
| FDI processing | Application handling and approvals | 10,000–50,000 | Project size affects this |
| PAN & tax setup | PAN; VAT if needed | 3,000–10,000 | Excluding VAT security deposits, if any |
| Bank onboarding | KYC, inward remittance support | 0–10,000 | Bank charges differ |
| Professional support | Drafting, filings, liaison, advisory | 150,000–500,000 | Scope and fast-track needs |
| Miscellaneous | Notary, translations, courier | 15,000–60,000 | Buffer for extras |
Foreign currency note: Budget a buffer for currency conversion and bank charges when remitting capital.
Bring equity capital via formal channels under your specific FDI approval.
Bank provides inward remittance advice. Keep it safe.
Report the investment to NRB to anchor future dividend and capital repatriation.
Use the same approved route for any shareholder loans or technology transfer fees.
Maintain a clean audit trail: approval order, swift copy, bank credit, NRB record, and share issue.
PAN is mandatory for all companies.
VAT registration is required for VAT-covered activities or once you cross the turnover threshold.
Withholding tax (TDS) applies to salaries, services, rent, and certain payments.
Keep proper books and source documents.
File returns on time to avoid penalties and preserve tax credit.
Engage a licensed auditor and align your reporting calendar to Nepal’s fiscal year.
Offer letters, contracts, and policies must align with the Labor Act and current rules.
Register employees for Social Security Fund (SSF) if applicable.
Maintain attendance, leave, and payroll tax records.
Observe working hour rules, holidays, and health and safety duties.
For expatriates, secure the correct visa and work permits before starting work.
Nepal maintains a negative list and restricted activities for foreign investment under FITTA and related rules.
Some sectors require technical, environmental, or financial sector approvals.
Large infrastructure or high-value projects may fall under the IBN regime.
Check your NICE classification, HS codes, or sector code to map permits early.
If you transfer know-how or IP, file technology transfer agreements in line with the rules.
Skipping FDI approval before OCR filing.
Under-documented KYC for foreign shareholders.
Incorrect MOA scope that blocks VAT or sector permits later.
Missing NRB recording, which complicates remittances.
No auditor appointment until year-end.
VAT timing errors and late return penalties.
Weak HR files and missing SSF enrollment.
Q1. How long does it take to incorporate a company in Nepal?
Most straightforward cases complete within 3–8 weeks from document readiness. Complex sectors or large FDI can take longer.
Q2. What is the minimum capital to start?
There is no blanket statutory minimum for private companies. FDI policy prescribes a minimum investment threshold for most foreign investments. Confirm your sector’s current threshold.
Q3. Can a foreign company own 100% of a Nepal subsidiary?
Yes, in many sectors. Some sectors are restricted or capped. Always check the negative list and sector rules.
Q4. When do I need VAT registration?
When your supplies are VAT-covered or you cross the turnover threshold. Many B2B services register early to claim input credit.
Q5. How do I repatriate profits?
Declare dividends, ensure tax clearance, and use the bank channel aligned with NRB rules. Proper FDI and remittance records are essential.