Legal Requirements for Business Registration in Nepal (2025 Update)

Business registration in Nepal is the first step for any foreign company planning to operate in the country. Under Nepal’s Companies Act and investment laws, every foreign business must legally register before commencing operations. Proper registration ensures limited liability, profit repatriation rights, investor visas, and access to banking facilities.

This 2025 guide covers the complete process of business registration in Nepal, including legal requirements, types of entities, step-by-step registration procedures, compliance needs, and common questions foreign companies ask.

Legal Framework and Key Regulators

Business registration in Nepal is governed by the following laws and authorities:

• Companies Act 2063 (2006): Defines incorporation, company structures, and compliance rules.

• Foreign Investment and Technology Transfer Act (2019): Regulates foreign equity, technology transfer, and repatriation of profits.

• Office of the Company Registrar (OCR): Issues incorporation certificates and manages filings.

• Department of Industry (DOI): Approves foreign direct investment (FDI) up to a specified threshold.

• Investment Board Nepal (IBN): Approves large FDI projects above NPR 6 billion.

• Nepal Rastra Bank (NRB): Records foreign capital inflows and enables profit repatriation.

• Inland Revenue Department (IRD): Issues tax numbers (PAN/VAT).

• Local Ward/Municipality: Issues annual trade/business licenses.

Types of Business Entities for Foreign Companies

Foreign investors can register under several structures.

1. Private Limited Company (Pvt. Ltd.)

• Most popular choice.

• 1–100 shareholders.

• Limited liability protection.

• Allows up to 100% foreign ownership.

• Requires at least one director.

2. Public Limited Company (PLC)

• Minimum 7 promoters.

• Higher capital requirement (NPR 10 million+).

• Can list on the stock exchange.

• Common in banking, hydropower, and insurance.

3. Branch Office

• Extension of a foreign parent company.

• Unlimited liability.

• Can engage in the same activities as the parent.

• Requires approval from relevant ministries.

4. Liaison Office

• Representative office for promotion/coordination only.

• Cannot generate revenue.

• Requires OCR registration but no DOI approval.

Comparison Table of Entities

Required Documents for Registration

Foreign investors must prepare:

• Name reservation approval from OCR.

• Memorandum & Articles of Association (MoA/AoA).

• Passports or citizenship certificates of shareholders/directors.

• Board resolution authorizing investment.

• Parent company’s incorporation certificate (for branch/liaison).

• Financial statements of the foreign parent (if applicable).

• Power of Attorney for local representatives.

• Business plan and investment details.

• Office lease agreement for local address.

Step-by-Step Registration Process

1. FDI Approval: Apply at DOI or IBN depending on investment size.

2. Company Name Reservation: File through OCR’s system.

3. Prepare and Submit Documents: MoA, AoA, IDs, resolutions, and fees.

4. Certificate of Incorporation: Issued by OCR once documents are approved.

5. Tax Registration: Obtain PAN and VAT (if applicable) from IRD.

6. Local License: Register business address with ward/municipality.

7. Bank Account: Open a corporate account in Nepal.

8. NRB Registration: Record capital inflows for future profit repatriation.

Restricted Sectors and Investment Rules

• Prohibited Sectors: Retail trading, agriculture production (dairy, poultry, vegetables), small-scale industries, personal services, arms and ammunition.

• Ownership Limits: Banking (65% foreign cap), insurance (65%), telecom (80%).

• Minimum FDI Threshold: NPR 20 million for most industries.

Post-Registration Compliance

• File annual financial statements with OCR.

• Hold AGMs and board meetings as required.

• Pay corporate income tax and file VAT returns.

• Renew ward/municipal trade licenses annually.

• Maintain NRB compliance for foreign capital.

Quick Checklist for Foreign Investors

Numbered List – Key Actions

1. Secure DOI/IBN approval.

2. Reserve a company name with OCR.

3. Prepare notarized documents.

4. Obtain Incorporation Certificate.

5. Register for PAN/VAT.

6. Obtain local license.

7. Open a corporate bank account.

8. Register foreign investment with NRB.

Bulleted List – Ongoing Compliance

• Annual audit and filings.

• Tax payments and returns.

• Renew licenses.

• Social security contributions for employees.

Frequently Asked Questions

Q1. How can a foreign company register in Nepal?
Foreign investors must first obtain DOI/IBN approval, then incorporate with OCR, register for taxes, and obtain local licenses.

Q2. What documents are required?
Passports or IDs, MoA/AoA, board resolution, financial statements (if corporate investor), office lease, and notarized authorizations.

Q3. Can foreigners own 100% of a Nepali company?
Yes, in most industries. However, banking, insurance, and telecom have ownership caps, and certain industries are restricted.

Q4. How long does registration take?
5–10 business days after document submission. Including FDI approval, the total process takes 3–6 weeks.

Q5. What is the cost of registration?
OCR fees range from NPR 1,000 to NPR 16,000 depending on authorized capital. FDI approval fees are modest, with professional service charges varying.