Key Steps in the Company Registration Process in Nepal

The company registration process in Nepal is one of the most structured gateways for foreign companies entering South Asia. Nepal offers strategic access to India and China, a growing services sector, and strong legal protections for foreign investors.

However, the process involves multiple authorities, compliance layers, and legal milestones. Understanding each step in advance saves time, money, and regulatory risk.

This guide explains the key steps in the company registration process in Nepal, with practical insight tailored specifically for foreign founders, CFOs, and expansion teams.

Why Foreign Companies Are Choosing Nepal

Before diving into the company registration process in Nepal, it helps to understand why Nepal is attracting foreign investment.

Key advantages include:

• 100 percent foreign ownership in most sectors

• Competitive operating and talent costs

• Investor protections under FITTA 2019

• Strategic time zone alignment with Europe and Australia

• Access to skilled English-speaking professionals

Foreign investment is governed primarily by the Foreign Investment and Technology Transfer Act, 2019 (FITTA) and the Companies Act, 2006.

Overview of the Company Registration Process in Nepal

The company registration process in Nepal follows a clear sequence. While timelines vary, the structure remains consistent.

At a high level, foreign companies must:

1. Obtain foreign investment approval

2. Register the company with OCR

3. Complete tax and statutory registrations

4. Set up banking and capital inflow

5. Comply with labour and operational laws

Each step is explained in detail below.

Key Steps in the Company Registration Process in Nepal

This section walks through the key steps in the company registration process in Nepal in the exact order foreign companies must follow.

Step 1: Determine the Appropriate Legal Structure

Foreign investors usually choose one of the following:

• Private Limited Company

• Branch Office

• Liaison Office

For long-term operations, revenue generation, and hiring staff, a Private Limited Company is the most common option.

Common legal structures explained

• Private Limited Company: Separate legal entity. Can earn revenue.

• Branch Office: Extension of a foreign parent. Limited scope.

• Liaison Office: Non-commercial representation only.

Step 2: Foreign Investment Approval (FITTA 2019)

Foreign companies must obtain approval before company registration.

Depending on the investment size and sector, approval is issued by:

• Department of Industry (DOI), or

• Investment Board Nepal (IBN)

Required documents for foreign investment approval

• Foreign investor details and incorporation documents

• Project profile and business plan

• Proposed capital structure

• Shareholding pattern

• Board resolution from parent company

FITTA 2019 guarantees:

• Repatriation of capital and profits

• Protection against nationalization

• Equal treatment with domestic investors

Step 3: Name Reservation at Office of Company Registrar (OCR)

Once foreign investment approval is granted, the next step in the company registration process in Nepal is name reservation.

The proposed company name must:

• Be unique

• Not conflict with existing trademarks

• Reflect the intended business activity

Name reservation is done online through the Office of Company Registrar (OCR) portal.

Step 4: Preparation of Constitutional Documents

Foreign companies must prepare and submit:

• Memorandum of Association (MOA)

• Articles of Association (AOA)

These documents define:

• Company objectives

• Share capital structure

• Director powers

• Governance rules

The MOA and AOA must align with the Companies Act, 2006 and FITTA approval terms.

Step 5: Company Registration with OCR

After document submission, OCR reviews the application.

If compliant, OCR issues:

• Certificate of Incorporation

• Company Registration Number (CRN)

This legally establishes the company in Nepal.

Typical OCR processing time: 3 to 7 working days.

Step 6: Tax Registration and PAN/VAT Setup

Every registered company must obtain a Permanent Account Number (PAN) from the Inland Revenue Department.

Depending on turnover and activities, VAT registration may also be required.

Tax registrations enable:

• Invoicing

• Payroll processing

• Statutory tax filings

Step 7: Bank Account Opening and Capital Inflow

Foreign companies must open a foreign investment bank account in Nepal.

Capital must be:

• Remitted through formal banking channels

• Converted via Nepal Rastra Bank–approved processes

The bank issues a Foreign Investment Inflow Certificate, which is critical for future profit repatriation.

Step 8: Post-Incorporation Registrations

After incorporation, additional registrations are mandatory.

These include:

• Social Security Fund (SSF)

• Local ward office registration

• Labour office notifications

Failure to complete these steps can trigger penalties under the Labour Act, 2017.

Step 9: Employment and HR Compliance

Foreign companies hiring in Nepal must comply with:

• Labour Act, 2017

• Social Security Fund Act, 2018

• Bonus Act, 1974

Mandatory employer obligations

• Employment contracts

• Minimum wage compliance

• SSF contributions

• Leave and termination compliance

Step 10: Ongoing Compliance and Reporting

Company registration in Nepal does not end at incorporation.

Ongoing obligations include:

• Annual returns to OCR

• Tax filings and audits

• SSF and payroll reporting

• Board and shareholder compliance

Professional support reduces long-term regulatory risk.

Original Insight: Timeline Comparison for Foreign Companies

This comparison reflects real-world averages observed across foreign-funded entities.

Common Mistakes Foreign Companies Make

Avoid these frequent pitfalls in the company registration process in Nepal:

• Incorrect business activity classification

• Delayed capital remittance

• Misaligned MOA and FITTA approval

• Ignoring labour compliance in early stages

• Using generic templates not aligned with Nepal law

How Long Does the Company Registration Process in Nepal Take?

Most foreign companies complete the company registration process in Nepal within 5 to 8 weeks when documents are prepared correctly.

Delays usually occur due to:

• Incomplete foreign documents

• Poor coordination with banks

• Incorrect compliance sequencing

When to Use an Employer of Record (EOR) Instead

Some foreign companies prefer to test the market first.

An Employer of Record (EOR) allows companies to:

• Hire legally without entity setup

• Avoid long-term compliance risk

• Enter Nepal within weeks

EOR is often used before full company registration.

FAQ: Company Registration Process in Nepal

Is 100 percent foreign ownership allowed in Nepal?

Yes. Most sectors allow 100 percent foreign ownership under FITTA 2019, except restricted industries.

How much minimum capital is required?

There is no fixed minimum capital. Authorities assess capital adequacy based on business scope.

Can profits be repatriated?

Yes. FITTA 2019 guarantees repatriation of profits, dividends, and capital, subject to tax clearance.

Do foreign directors need to reside in Nepal?

No. Directors can remain overseas. A local authorized representative is required.

Is physical presence required for registration?

No. The company registration process in Nepal can be completed remotely with proper authorization.

Conclusion

The company registration process in Nepal is structured, investor-friendly, and legally robust when handled correctly. Foreign companies that understand each step reduce risk, accelerate timelines, and build compliant operations from day one.

With the right guidance, Nepal becomes a strategic, scalable base for South Asia expansion.

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