Expanding your business into Nepal can be an exciting opportunity, but foreign company registration in Nepal comes with specific legal procedures and requirements. This comprehensive guide will walk you through the process step by step, explain the government bodies involved, and highlight everything from required documents and fees to compliance obligations. Updated for 2025, we’ll also cover the latest regulatory changes and how Digital Consulting Ventures can assist you in navigating the incorporation process. Let’s dive in with a conversational breakdown of what foreign investors need to know when setting up a company in Nepal.
Registering a foreign-owned company in Nepal involves multiple stages and regulatory approvals. At a high level, the process can be broken down into a few key phases:
Obtain Foreign Investment Approval: Before incorporating, foreign investors typically need approval under Nepal’s foreign investment laws. The approving authority depends on the scale of investment:
Department of Industry (DoI): Approves foreign investments less than NPR 6 billion (approximately USD ~$45–50 million).
Investment Board Nepal (IBN): Approves larger investments above NPR 6 billion, often for big infrastructure or strategic projects.
This approval step is mandated by the Foreign Investment and Technology Transfer Act (FITTA) 2019, which governs FDI in Nepal. You’ll usually submit an application with details of your project, investors, and financing. The government will check that your proposed business is in a sector open to foreign investment and meets the minimum investment threshold (more on that below).
Reserve a Company Name: In parallel with or after obtaining FDI approval, you should reserve your company name with the Office of the Company Registrar. Nepal has an online company registration portal where you can search name availability and submit a name reservation request. The name should be unique and comply with guidelines (for example, avoiding certain restricted words).
Prepare Incorporation Documents: Next, gather and prepare all required documents for company registration. (We provide a detailed list of required documents in a later section.) Key documents will include your proposed company’s Memorandum of Association (MOA) and Articles of Association (AOA), which outline the company’s purpose, capital structure, and governance. If you obtained a foreign investment approval in Step 1, you’ll need to include that approval letter as part of your documentation. You will also need identity documents (passports) of foreign promoters and any Nepali partner if applicable, and other forms as specified by the registrar.
Submit Application to the Company Registrar (OCR): Once your documents are ready, you will submit the incorporation application to the Office of the Company Registrar (OCR). This is done online through the OCR e-services portal. You will create an account, fill out the company registration form, upload all the documents, and then submit for review. The OCR will review your application and may ask for corrections if something is not in order. If everything is satisfactory and the FDI approval is in place, the OCR will approve the registration.
Pay Registration Fees: During the submission, or upon approval, you will need to pay the prescribed company registration fee. The fee is based on the authorized capital of your company. (We provide details on the fee structure in the Fees and Costs section below.) Payment can typically be made via bank deposit or online banking to the government’s account.
Receive Certificate of Incorporation: Once the OCR processes your application and payment, you will receive the Certificate of Incorporation and your company is officially registered. The certificate will include your company registration number and details. At this point, your company (usually a Private Limited Company if it’s a standard setup) is a legal entity in Nepal.
Post-Incorporation Registrations: After incorporation, a few additional registrations are required before you can start operations:
Permanent Account Number (PAN) Registration: All companies must register for a PAN with the Inland Revenue Department for tax purposes. This is essentially your tax ID. If your business will engage in transactions that meet the threshold for VAT (Value Added Tax), you should register for VAT as well.
Industry Registration: If your business activity falls under the definition of an “industry” (as per the Industrial Enterprises Act), you must register the industry with the Department of Industry or relevant ministry. In fact, as of the Industrial Enterprises Act, 2020, it’s mandatory for all defined industries to be registered with the government after incorporating the company. This is essentially a license indicating you are a recognized industry, which can be important for certain benefits and compliance.
Local Government Registration: In many cases, you will also register your new company with the local ward or municipality where your office is located. This is a simple process of notifying the local government and paying any applicable local business taxes or fees.
Social Security Fund Registration: If you will be hiring employees, Nepal’s laws require registering with the Social Security Fund and relevant labor offices. This ensures you’ll make contributions for employee benefits as required by law. Typically, once you start hiring, you have to enroll in social security (which covers schemes for pensions, maternity, health insurance, etc.) and ensure labor compliance.
Bank Account & Capital Injection: You’ll open a company bank account in Nepal to bring in the foreign investment capital. The initial capital specified in your FDI approval must be remitted into Nepal through banking channels. Nepal Rastra Bank (the central bank) will monitor this; you may need to report the inflow to get a letter acknowledging that the foreign equity capital is received, which is important for future profit repatriation.
Other Licenses: Depending on your industry, you may need additional licenses or permits before operating. For example, certain businesses may require environmental clearances (like an Initial Environmental Examination or Environmental Impact Assessment for projects in sectors like manufacturing or energy), or sector-specific licenses (e.g., tourism businesses might register with the Tourism Board, export businesses with the Department of Customs, etc.). Make sure to check if your sector has any special requirements.
Throughout this process, multiple government bodies will be involved. In the next section, we’ll identify the key agencies and their roles in foreign company incorporation.
Nepal’s investment and company registration landscape involves several government agencies. Knowing who does what will help you navigate the system more efficiently:
Department of Industry (DoI) – The DoI, under the Ministry of Industry, Commerce, and Supplies, is the primary body that approves most foreign investment proposals. If your investment is below the high-value threshold (NPR 6 billion), your application for foreign investment approval will be vetted by the DoI. They ensure the proposed business complies with the Foreign Investment Act and isn’t in a restricted sector. The DoI also operates a One-Stop Service Center to coordinate various post-approval needs (like industry registration, visa recommendations, etc., aimed at simplifying investor processes).
Investment Board of Nepal (IBN) – The IBN is a high-level government agency that handles larger investments above NPR 6 billion or those in priority sectors (like large infrastructure projects, hydropower projects of certain capacity, etc.). If your project falls under IBN’s jurisdiction, you will apply to the IBN for approval instead of the DoI. The IBN was created to facilitate big-ticket investments and often provides more customized handling for strategic investors.
Office of the Company Registrar (OCR) – This is the agency where the actual company incorporation happens. The OCR manages the registration of all companies in Nepal, whether domestic or foreign-owned. They maintain the registry of companies, process name reservations, incorporation applications, and issue the Certificate of Incorporation. The OCR has an online registration portal that foreign investors (or their local representatives) can use to submit documents. The OCR is also the place where you file annual returns and report changes in your company’s structure in the future.
Nepal Rastra Bank (NRB) – NRB is Nepal’s central bank. Any foreign investment coming into Nepal must comply with NRB’s foreign exchange regulations. After your company is incorporated and you bring in the investment funds, NRB will issue a Foreign Investment Approval Certificate or letter (sometimes called a “NRB approval” or “inward remittance acknowledgment”). This document is important because it evidences that the capital that came in is recognized as FDI; you will need it later if you want to repatriate profits, dividends, or when you eventually liquidate or withdraw investment. NRB also sets rules on things like debt-to-equity ratios for foreign-owned companies and oversees loan approvals if the foreign company wants to borrow from abroad. Essentially, while NRB isn’t directly involved in the initial company registration, it becomes involved once money moves across borders.
Ministry of Industry, Commerce and Supplies (MoICS) – This is the parent ministry for the DoI and OCR. While you won’t interact with the Ministerial level directly as an investor, it’s good to know the hierarchy. The MoICS is responsible for creating policies related to industry and investment. It also hosts the Industry and Investment Promotion Board (sometimes referenced in guides) which is a coordination body for investment promotion. In practice, your dealings will be with DoI or IBN for approvals, but these bodies report to the ministry.
Inland Revenue Department (IRD) – After incorporation, your interface with the IRD will be to obtain tax registrations (PAN/VAT) and to comply with tax filings. The IRD operates under the Ministry of Finance and manages tax laws. For a foreign company, understanding tax obligations (corporate income tax, VAT, withholding taxes, etc.) is crucial. (Corporate tax rates in Nepal generally range from 20% to 30% depending on industry, and there are tax treaties to avoid double taxation with several countries.)
Department of Immigration – If you plan to have foreign nationals (investors or employees) living and working in Nepal, the Department of Immigration comes into play. They issue Business Visas to investors, which are typically one-year multiple-entry visas renewable annually if certain investment criteria are met. For example, investing a certain amount (often USD 100,000 or more) can make you eligible for a Business Visa. If you invest a larger amount (USD 1 million or more), Nepal offers a Residential Visa for foreign investors, which is a long-term visa incentive. It’s worth planning for visas early if you will be relocating personnel.
Sectoral Regulators – Depending on your business sector, additional bodies might be involved. For instance:
If you’re opening a bank or financial institution, the Nepal Rastra Bank will also act as your sector regulator and you need a banking license.
If you’re in telecom, the Nepal Telecommunications Authority must license you.
For projects in hydropower, you’d interact with the Department of Electricity Development.
These sectoral clearances usually come after or alongside the company registration process. For most normal service or trading businesses, sector-specific approval is not needed to incorporate, but it may be needed to actually start operations (e.g., a pharmaceuticals business might need Department of Drug Administration approval to sell medicines, etc.).
By coordinating with the appropriate agencies – DoI/IBN for investment approval, OCR for company setup, NRB for capital, and so on – you’ll cover all the legal bases for starting a foreign company in Nepal. It might seem like a lot of touchpoints, but Nepal has been working to streamline these through initiatives like an online one-stop service system.
Next, let’s look at the nitty-gritty details: what documents you will need, how much the process costs, and how long it takes.
To register a company in Nepal as a foreign investor, you must prepare a comprehensive set of documents. The requirements cover both the incorporation paperwork and the foreign investment approval documentation. Here’s a list of the key documents you will typically need:
Application Form: The company registration application as per the OCR’s prescribed format. (If applying online, you fill out the digital form on the OCR portal, but you may also need to upload a signed PDF of the form).
Name Reservation Certificate: Proof of your approved company name reservation from the OCR (if obtained separately in advance). This shows that your desired company name is locked for your use.
Memorandum of Association (MOA): This is one of the constitutional documents of the company. It states the company’s name, registered office, objectives (scope of business activities), amount of authorized capital, and details of shareholders with their shareholdings. For a foreign investment company, the MOA will outline the percentage ownership of the foreign investor(s) and any Nepali partner if applicable.
Articles of Association (AOA): The AOA is the second constitutional document, detailing the internal governance of the company – e.g., how directors are appointed, powers of the board, meeting procedures, etc. Standard templates are available, but it should be tailored to your company’s needs within the framework of Nepali company law.
Joint Venture Agreement (if any): If you are partnering with a local company or individual, and you have a joint venture arrangement, a copy of the joint venture agreement should be provided. This is not needed if the company is 100% foreign-owned and you aren’t required to have a local partner by law (most sectors don’t require a local partner, as 100% foreign ownership is allowed in many areas).
Promoter/Shareholder Documents: Identification documents of all shareholders/promoters:
For Nepali citizens involved: copies of citizenship certificates.
For foreign individuals: copies of passports.
For foreign companies (if the investor itself is a company): certified copies of that company’s registration (Certificate of Incorporation from home country), Charter or Memorandum/Articles, and a Board Resolution authorizing the investment in Nepal. These foreign documents should be notarized and translated into English or Nepali if they are in another language.
A recent passport-size photo of each signatory or company representative is often required for the forms.
Foreign Investment Approval Letter: The official approval letter from the Department of Industry or Investment Board Nepal that authorizes your foreign investment. This is crucial; the OCR will ask for this letter to ensure that the foreign shareholding has government permission. If your investment approval is still in process, you generally cannot complete company incorporation (except in some cases of automatic route as discussed later).
Project Description/Feasibility Report: Usually submitted to the DoI/IBN for the investment approval step, a brief project description or business plan might also be included in the documents package. It outlines what the company will do, projected investment amount, and expected benefits. For smaller investments this might be just a couple of pages, while larger projects might have a detailed feasibility study.
Bank Reference or Financial Credibility Certificate: Nepal’s authorities often require proof that the foreign investor has the financial capacity to bring in the pledged investment. This is typically a letter from your bank (in your home country) vouching for your account standing or a bank statement. Such a document would be used during the FDI approval stage to show you can indeed invest, but it’s good to have on hand.
Power of Attorney (if applicable): If you are not in Nepal and are authorizing someone (like a lawyer or consultant) to submit documents on your behalf, you should provide a Power of Attorney (POA). The POA should authorize the representative to act for the foreign investor or foreign company. This too may need notarization or attestation, especially if it’s signed abroad.
Registered Office Lease Agreement: A document showing you have a registered office address in Nepal (could be a rental agreement or ownership document for the premises). While you can initially register a company with just an address, eventually you’ll need to show proof of that address for local registrations. Some investors use the address of their law firm or a serviced office as the temporary registered address during incorporation, then change it later once they have their own office.
Consent Letters from Directors: If the initial directors of the company are being appointed, they may need to sign consent forms agreeing to act as directors. Also, provide their details (IDs, addresses). Nepal requires at least one director in a private company (who can be foreign).
Statutory Declaration: In some cases, promoters sign a declaration that all information provided is true and that they will abide by the laws. This might be part of the application form or a separate statement.
Keep in mind that all documents in a foreign language (anything not in Nepali or English) should be translated. It’s also wise to have multiple sets of copies. Once you have compiled all these documents, you’re ready to proceed with the online filing to OCR and the submission to relevant authorities.
Tip: Double-check the latest guidelines on the OCR’s official website before submission, as requirements can update. The OCR provides a detailed registration guide online, which is worth reviewing to ensure you haven’t missed any form or supporting document.
One of the practical questions foreign investors ask is: “How much will it cost to register a company in Nepal?” The good news is that government fees in Nepal are relatively modest. The total official fees won’t break the bank, but it’s important to budget for them and know what they are. Here’s a breakdown of the key costs and fees:
Company Registration Fee (OCR fee): This fee is determined by your company’s authorized share capital. Nepal uses a sliding scale:
For a Private Limited Company:
Authorized capital up to NPR 100,000: fee ~ NPR 1,000
NPR 100,001 to 500,000: fee ~ NPR 4,500
NPR 500,001 to 2,500,000: fee ~ NPR 9,500
Above NPR 10,000,000: roughly NPR 30 for each additional 100,000 in capital. (In practice, this means the fee increases gradually. For example, a company with NPR 50 million authorized capital would pay around NPR 40,000–45,000 in registration fees.)
For a Public Limited Company (which most foreign investors won’t use unless planning an IPO or a large venture):
Up to NPR 10,000,000: NPR 40,000
NPR 10,000,001 to 20,000,000: NPR 70,000
NPR 20,000,001 to 30,000,000: NPR 100,000
NPR 30,000,001 to 40,000,000: NPR 130,000
NPR 40,000,001 to 50,000,000: NPR 160,000
Above NPR 50,000,000: NPR 30,000 for each additional 10,000,000.
Branch / Liaison Office Registration: If instead of a new company, you register a branch office of a foreign company, the fees are slightly different but also based on the parent company’s investment size. For example, a branch of a company investing up to NPR 10 million pays NPR 15,000; investments up to 100 million pay NPR 40,000; higher investments incur larger fees. (Branch registration is a more niche case, discussed later in FAQs.)
Foreign Investment Approval Fee: This is a fee paid to the Department of Industry or IBN for processing your foreign investment application. The fee can vary based on the amount of investment:
PAN/VAT Registration Fee: Obtaining a Permanent Account Number from the tax office costs a nominal fee (around NPR 500 as of recent info). VAT registration is often done simultaneously if needed, without significant extra charge.
Business Visa Fee: If you are planning to stay in Nepal on a business visa as an investor, note that the visa comes with a fee of roughly NPR 20,000 per year for a one-year multiple-entry business visa (This is outside the company registration process per se, but a cost to be aware of for foreign owners residing in Nepal.)
Professional Services Fees: In practice, many foreign companies engage local law firms or consulting agencies (like Digital Consulting Ventures) to handle the paperwork. Professional fees can vary widely depending on the service scope. For a full incorporation service including legal document drafting, government liaison, translations, etc., you might expect to pay anywhere from NPR 100,000 to NPR 500,000 in professional fees (approximately USD $750 to $3,800). This cost is optional but often worthwhile to ensure a smooth process and compliance.
Notary and Translation Costs: Notarizing documents and translating foreign documents to Nepali/English will incur some costs. Notary fees in Nepal are not very high (maybe a few hundred NPR per page), but if you have many documents from overseas to translate, budget accordingly.
Office Setup and Miscellaneous: Apart from government fees, remember the practical costs. You may need to rent an office space (deposit and rent costs), pay for company stamps/seals, printing of letterhead, etc. These aren’t “fees” to the government but are part of the startup cost.
Overall, the direct government costs for registering a typical mid-sized private company with foreign investment (say with NPR 10 million capital) can be under NPR 20,000 for the registration plus maybe NPR 20,000 for the FDI approval – so roughly NPR 40,000 (~ USD $300) in government fees. Even if your authorized capital is higher, government fees rarely exceed a few hundred dollars. This makes Nepal’s entry cost quite affordable compared to some other countries. The bigger expenses usually come in with the investment itself and any facilitation services you opt for.
“How long will it take to incorporate my company in Nepal?” is a crucial question for planning your market entry. The timeline can vary based on your specific situation (especially the nature and size of the investment), but here’s a general idea of the processing time for each stage:
Foreign Investment Approval: This tends to be the most time-consuming part. On average:
Approval from the Department of Industry (for normal investments) might take around 4–6 weeks. This includes time to review your application, possibly ask for additional info, and coordinate with other agencies.
If your project requires Investment Board approval, it can take longer, sometimes 2–3 months or more, because IBN approvals often involve higher-level government scrutiny or even cabinet decisions for very large projects.
Recent reforms aim to speed this up (for example, the introduction of an automatic approval route for certain investments, which we’ll discuss in the updates section). But as a baseline, plan for about 1 to 2 months for FDI approval in the standard process.
Company Name Reservation: This is usually quick. With the online system, name approval can be obtained within a couple of days – sometimes even within 24 hours if the name doesn’t conflict and officials are prompt. If the first name is rejected, you might need an extra day to apply with a different name.
Company Registration (OCR) Processing: Once you submit all incorporation documents to the OCR (assuming you have the FDI approval in hand), the approval can be relatively fast. Typically 5–10 working days is common, if documents are in order. In some cases, it might be completed in just a few days. If there are queries or corrections needed, it could extend to a couple of weeks. The OCR’s move to an online system has generally sped up this part.
PAN Registration: Obtaining a PAN from the tax office is a quick process – usually within a week. Often it’s done in just a couple of days after you submit the application to the Inland Revenue office. VAT registration (if needed) might take a few more days especially if a field visit is required, but often can coincide with PAN.
Industry Registration & Local Registrations: Registering as an industry with the DoI (if applicable) can be done parallelly or just after the company reg, and might take 1–2 weeks, mainly for paperwork to be processed. Registering with the local ward is usually a same-day task (just going to the office and filling a form, paying a fee) – one or two days at most.
Opening Bank Account & Fund Transfer: Opening a corporate bank account in Nepal might take a week or two depending on the bank’s Know-Your-Customer processes. Transferring the investment funds from abroad and getting the NRB acknowledgment might take 2–3 weeks because you have to wire the money and then apply to NRB for the letter – NRB will want to see your company registration certificate, FDI approval, etc., and then they issue the letter relatively quickly if all is in order.
Total Time Frame: Summing it up, a realistic timeline to have a fully operational company is about 2 to 3 months in most cases. In a straightforward scenario (moderate investment, prompt paperwork, and follow-up), sometimes it can be done in as fast as 6–8 weeks. Conversely, for very large projects or if bureaucratic delays occur, it could stretch to 4–5 months. Planning for around 3 months is a safe middle-ground estimate.
Keep in mind: Nepal’s government offices might move slower during festival seasons or fiscal year-end. Also, any errors in documentation can cause back-and-forth delays. Engaging a local expert can significantly smooth timelines, because they’ll ensure forms are correct and nudge the process along with regular follow-ups.
Registering your company is just the beginning. Once your foreign company is incorporated in Nepal, you must adhere to ongoing compliance and regulatory obligations to keep the company in good standing. Here are the key compliance areas to be mindful of:
Annual Financial Statements and Audit: Every company in Nepal is required to prepare annual financial statements. An independent auditor (a licensed Chartered Accountant in Nepal) must audit the accounts of the company every fiscal year. Nepal’s fiscal year runs from July 16 to July 15 (approximately). The audited financial statements typically need to be prepared within 6 months of fiscal year end and submitted to authorities. In the case of foreign branch offices, the branch must submit its annual financial statement to OCR within 6 months of the fiscal year, and also provide a copy of the parent company’s audited financials within 3 months of the parent’s fiscal year completion.
Annual General Meeting (AGM): A private company in Nepal is generally required to hold an Annual General Meeting of shareholders within a certain time after the fiscal year end (often within 6 months). During the AGM, shareholders approve the audited accounts, appoint/reappoint the auditor, and address any major decisions. The resolutions from the AGM should be documented.
Annual Return Filing: You must file an annual return with the Office of the Company Registrar. This is essentially an update on the company’s status – confirming the address, directors, shareholders, etc., and that the AGM was held. The annual return is usually due within 30 days of the AGM. Failing to file annual returns can result in fines or the company being marked inactive by the OCR.
Tax Filings: Compliance with tax obligations is critical:
Monthly/Quarterly Taxes: If your company is under the VAT regime, you’ll file VAT returns (typically monthly). Similarly, you’ll remit withheld taxes on payments (e.g., employee income taxes, taxes on payments to vendors if applicable) on a periodic basis.
Annual Tax Return: The company must file an annual income tax return with the Inland Revenue Department. This is due within 3 months of the fiscal year end (with possible extension of 3 more months). Corporate income tax (25% for normal companies) is paid in advance installments and adjusted in the annual filing.
Tax Audit: If your company surpasses certain thresholds, a tax auditor verification might be required (Nepal often requires a tax audit certification to be submitted with the annual return if sales or assets are above a limit, which for a new company might not be an issue initially).
Foreign Investment Compliance: As a foreign-invested company, you also have to comply with Nepal Rastra Bank regulations:
Share Capital Remittance: Bring in the pledged investment capital within the timeline given (usually the approval might specify to bring capital within 6 months or a year). If you need an extension, apply to the DoI/IBN.
Repatriation Protocols: You can repatriate dividends or profits, but only if your company is compliant (financials audited, taxes paid) and with NRB approval. Typically, to remit dividends abroad, you apply to NRB with proof of profits (audit report), tax clearance, board resolution declaring dividend, etc.
Loan Reporting: If your company takes any foreign loans, those must be approved by NRB in advance and reported.
Changes in Equity: If you plan to transfer shares to another foreign party or bring in additional capital or reduce capital, those changes require prior approval from DoI/IBN and intimation to NRB.
Labor Law Compliance: If you hire employees:
Employment Contracts: Provide written contracts to employees as required.
Social Security & Provident Funds: As mentioned earlier, companies hiring staff have to enroll and contribute to the Social Security Fund (which covers various insurance schemes). There’s also a Provident Fund requirement if you have 10 or more employees, or alternatively contributions to the Social Security Fund as a replacement for provident fund and gratuity as per new law.
Labor Permits for Expats: Any foreign employee working in Nepal will need a work permit from the Department of Labor. This is separate from the visa; it’s essentially permission for the company to employ a foreign national because no equivalent local was found for the role. In practice, companies apply after the person is in Nepal on a work visa or business visa. It’s an extra bureaucratic step to remember for compliance.
Industry Specific Compliance: Ensure you maintain any industry licenses or renewals. For instance, if you’re in a regulated field, you might have to submit periodic reports to the regulator (e.g., tourism businesses might report tourist stats, hydro projects might have environmental compliance reports, etc.). If you benefited from any tax incentives or customs duty exemptions (sometimes given to industries or export businesses), you’ll have compliance rules to follow to keep those benefits (like you must actually export a certain percentage if you got an import duty exemption for an export-oriented industry).
Maintaining Updated Records: Any changes in your company (address change, director change, share allocation changes) should be officially updated:
You need to notify the OCR by filing the required forms when such changes happen.
Also update the tax office if, say, you change your address or directors.
Renewals: While company registration itself doesn’t require renewal (the company remains registered as long as compliance is met), some licenses and registrations do. For example, business visas must be renewed yearly, a local municipality “operating permit” (if applicable) might require annual renewal tax, and any specific operating licenses could be annual.
Staying compliant might sound daunting, but it becomes routine once you set up good accounting and legal support. Many foreign businesses in Nepal outsource accounting, payroll, and compliance management to local firms to handle these periodic tasks. Non-compliance can lead to fines or legal complications, so it’s worth being proactive about meeting all obligations.
Nepal’s regulatory environment for foreign investment has evolved significantly in recent years, and it’s important to be aware of the latest updates (especially those up to 2025):
Foreign Investment Threshold Changes: In 2019, Nepal raised the minimum foreign investment threshold from NPR 5 million to NPR 50 million, a big jump intended to encourage only larger investments. However, this high bar was later reconsidered. By 2021–2022, the government lowered the minimum required investment. As of the latest policy update, the minimum foreign direct investment allowed is NPR 20 million (which is 2 crores Nepali Rupees, roughly USD $150,000). This means any foreign investor must plan to bring in at least that amount as equity. There are a few exceptions (for example, certain IT or tech startups might be exempted or have a lower threshold under special schemes), but generally 20 million is the floor. There is no upper cap on investment – you can invest as much as you want, and Nepal will welcome it!
Automatic Approval Route (2023): A very investor-friendly change came in October 2023. The government introduced an automatic route for foreign investment approvals up to NPR 500 million (around USD $37.5 million). Under this system, if you are investing up to that amount in certain sectors (such as energy, agriculture, infrastructure, tourism, IT, manufacturing, or services), you can apply online and receive automatic preliminary approval. Essentially, this means faster approval without the full bureaucratic review, to speed up mid-sized investments. It also notably removed the minimum investment requirement for IT sector investments through this route, recognizing that tech startups might not need to invest a full NPR 20 million initially. This automatic route is part of the government’s efforts to streamline and encourage investment by reducing red tape. It’s a new development, so investors in 2024 and 2025 should definitely explore if they qualify for the automatic route to save time.
One-Stop Service Center: Following the enforcement of the Industrial Enterprises Act, 2020, Nepal set up a one-stop service for investors at the Department of Industry. By 2025, this one-stop center has become more robust. It aims to provide multiple services under one roof – company registration guidance, tax registration, industry license, visa recommendations, etc. While not every process is literally done in one day or one office, the coordination has improved. For example, you might find that after getting your FDI approval, the DoI will help facilitate your visa paperwork with Immigration or help coordinate with the central bank for facilitating capital flow. The one-stop center is a work in progress, but it’s a positive development to ease the bureaucratic burden on foreign investors.
Industrial Enterprises Act, 2020: This replaced the older Industrial Enterprises Act of 1992. The new Act brought several updates:
It reaffirmed the requirement for industry registration (as we discussed in compliance).
It provided various incentives, like potential tax exemptions for certain industries and scaled fee structures.
It emphasized more transparency and also penalties for non-compliance.
For foreign investors, what matters is that this Act, together with FITTA 2019, forms the backbone of current policy – offering clarity on what sectors are open and the process to follow.
FITTA 2019 Implementation: The Foreign Investment and Technology Transfer Act, 2019 was a game-changer. By 2025, the rules under this Act have been well implemented through regulations:
It clarified the list of restricted sectors for FDI. Sectors completely closed to foreign investment include things like defense (arms and ammunition), atomic energy, currency and coin production, and certain small-scale cottage industries (like very small local handicrafts). It also placed some ownership caps: e.g., foreign investors can only own up to 80% in airlines or telecom companies, and up to 51% in consulting services, while casinos require a local partner. These restrictions remain in effect up to 2025.
FITTA also simplified dispute resolution and allowed international arbitration for disputes, which is a plus for foreign investors.
It introduced the concept of a Single Window system – which is essentially what became the one-stop service.
Over 2019-2025, through FITTA and subsequent regulations, the process for profit repatriation has become clearer and more assured – as long as taxes are paid, Nepal promises that you can repatriate dividends in the currency of investment, which is a vital reassurance.
Digitalization of Services: Nepal is gradually digitalizing its government services. The OCR’s online registration system is one example. By 2025, you can do name reservation, submission of documents, and even track your application status online. Similarly, the Department of Industry launched an online system for FDI applications – though one may still need to follow up physically, the initial submission can be digital. The Inland Revenue Department has online tax filing. These digital moves mean less time in queues and more transparency (you can get updates via email, etc.). For a foreign investor, this is a welcome change as it reduces the need to be physically present for every little task.
Labor Law Updates: Nepal introduced a new Labor Act in 2017 and a Social Security Act in 2018, which have been rolling out in recent years. By 2025, all companies (including foreign ones) are expected to be enrolled in the Social Security Fund system. The contribution is a combined 31% of basic salary (11% employee, 20% employer) which covers provident fund, gratuity, medical, accident, maternity, pension, etc. This is a compliance change that might increase operational costs but also modernizes employee benefits. Foreign investors should be aware of this as they budget for hiring.
Economic Climate and Policies: It’s also relevant to note that Nepal in 2025 is seeking more foreign investment as part of its economic growth strategy. The government often updates its policies to offer incentives:
For example, special tax holidays or rebates for industries in remote areas or those investing in certain priority sectors (like renewable energy, agriculture processing, etc.).
Special Economic Zones (SEZs) have been established with additional benefits (e.g., for export-oriented industries, there are some tax breaks and easier customs procedures).
Double Taxation Avoidance Agreements (DTAA) – Nepal has been adding to its list of treaties. By 2025, Nepal has DTAA with around 11 countries and some investment protection agreements (like with India, China, etc.). This gives foreign investors more confidence that they won’t be taxed twice and their investments are protected from nationalization.
Staying up-to-date with regulatory changes is important. The landscape can evolve, and what was a requirement a few years ago might be simplified now (or vice versa). This is another area where having a local consulting partner is helpful – they can inform you of new incentives or compliance rules so you can take advantage or ensure adherence.
Navigating the legal and bureaucratic maze of a foreign company incorporation in Nepal can be challenging, especially if you’re new to the country’s business environment. This is where Digital Consulting Ventures (DCV) comes into play as an invaluable partner. Digital Consulting Ventures is a Nepal-based consultancy that specializes in helping foreign businesses establish and grow their presence in Nepal.
What services does DCV offer? In short, a comprehensive, end-to-end solution. DCV’s team assists with every aspect of setting up a business in Nepal, so you don’t have to tackle the process alone. Key services include:
Company Incorporation Support: DCV will guide you through the entire registration process – from advising on the appropriate company structure to preparing the MOA/AOA and other documentation, to liaising with the Office of the Company Registrar. They know the ins and outs of the paperwork, which dramatically reduces the risk of your application getting delayed for corrections.
Foreign Investment Approvals: Getting the green light from government bodies like the Department of Industry can be intimidating. DCV helps prepare a solid application for FDI approval, ensuring your project proposal or business plan meets what officials are looking for. They coordinate with DoI or IBN, follow up on your behalf, and help address any queries from the authorities. Essentially, they smooth out that 4-6 week approval process by keeping it on track.
Regulatory Compliance & Liaison: DCV’s support doesn’t end with the incorporation certificate. They continue to help with post-incorporation tasks:
Obtaining PAN and VAT registrations, and registering with the tax office.
Registering your company as an industry (if required) and obtaining any sector-specific licenses.
Assisting in opening bank accounts and complying with Nepal Rastra Bank procedures for bringing in your investment capital.
Helping you understand labor laws, register for social security, and even drafting employment contracts to local standards.
Accounting & Tax Compliance Services: True to its name, Digital Consulting Ventures provides “Nepal Accounting” support services. This means they can handle your bookkeeping, set up accounting systems, and ensure you meet ongoing tax filing deadlines. Having accounting and tax compliance handled under the same roof means your company will avoid penalties and stay in good standing with the tax authorities.
Legal and HR Services: DCV can facilitate legal services such as reviewing lease agreements for your office, ensuring your company policies are in line with Nepali law, and providing payroll and HR solutions. For example, they offer payroll outsourcing and HR management services. If you need to hire local staff or expatriates, they can help with recruitment as well as compliance (work permits, labor contracts, etc.).
Local Market Insight and Consulting: Beyond just the mechanics of registration, DCV can provide valuable insight into how business is done in Nepal. Their consulting team can advise on market entry strategy, cultural nuances in business, and connect you with other service providers or government contacts as needed. Essentially, they act as your local guide and advocate.
Save Time and Effort: Perhaps one of the biggest benefits of working with Digital Consulting Ventures is the efficiency gained. Instead of you flying in multiple times or spending hours trying to understand which form to file where, DCV handles it. This allows you to focus on higher-level planning for your Nepal operations, while they take care of the groundwork.
Experience with Foreign Clients: Digital Consulting Ventures has experience specifically with foreign investors, which means they understand the expectations and concerns of an international business. They can bridge the gap that sometimes exists between Nepali bureaucratic processes and foreign business norms. Testimonials from previous clients (such as tech companies expanding into Nepal) indicate that DCV successfully helped them set up branches and subsidiaries, overcoming initial challenges and achieving smooth operations.
In a conversational sense: Think of DCV as that knowledgeable local friend who knows all the shortcuts and pitfalls in setting up a business in Nepal. Instead of going it alone, you have a team who’s done this many times for other foreign companies and can anticipate what you’ll need.
Contextual support: Throughout this article, we’ve stressed areas that can trip up newcomers – be it understanding the latest laws, preparing documents just right, or following through on compliance. Digital Consulting Ventures provides support in all those areas, making them a one-stop partner for international companies. They stay updated on regulatory changes (so you don’t have to constantly monitor government gazettes), and they integrate those changes into their client advice. For instance, if there’s a new automatic FDI approval route or a new labor regulation, DCV will incorporate that into their service immediately, ensuring you’re always a step ahead.
If you’re considering expanding your business into Nepal, engaging a service like Digital Consulting Ventures could be the difference between a process that feels daunting and one that feels manageable and efficient. They’ll help you hit the ground running in Nepal’s emerging market with confidence and compliance.
(For more information or to get personalized advice, you can reach out to Digital Consulting Ventures via their website or contact channels – they often offer an initial consultation to understand your needs.)
Q: Can a foreign investor own 100% of a company in Nepal?
A: Yes. In most sectors, Nepal allows up to 100% foreign ownership. You do not need a local Nepali partner just for the sake of it, unless the law specifically requires it for that industry. A few sectors have limits – for example, foreign ownership is capped at 80% in airlines and telecom, 51% in management consulting services, and casinos must have a local partner. But the vast majority of regular businesses (IT, export/import, manufacturing, trading, etc.) can be wholly foreign-owned. Always check the latest “negative list” of restricted industries, but for typical business ventures, 100% foreign ownership is permitted.
Q: What is the minimum capital required to register a foreign company in Nepal?
A: The government of Nepal requires a minimum foreign investment of NPR 20 million (20,000,000 Nepali Rupees) for each foreign investment project. This is roughly equivalent to USD $150k (depending on exchange rates). This minimum threshold means your planned equity injection (share capital) should meet or exceed that amount. There is an exception for information technology-based industries investing via the new automatic route, which do not have a minimum limit, and potentially some leeway for smaller projects under special policies. But as a general rule, plan for at least NPR 20 million capital. Note that this is not a fee, but the amount you need to actually invest into the company (it becomes your company’s capital to fund operations). You don’t have to spend it all at once, but you must bring it into Nepal as per your investment plan.
Q: How long does it take to register a company in Nepal as a foreigner?
A: Typically about 2 to 3 months from start to finish, assuming all documents are in order. The FDI approval from the government can take around 4-6 weeks (sometimes longer if complex). After that, the company registration with OCR is relatively quick (1-2 weeks). Adding time for preparing documents initially and some buffer, 2-3 months is a good estimate. In best-case scenarios, some have finished in 6-8 weeks. However, factors like needing Investment Board approval, corrections in paperwork, or delays in capital transfer can extend the timeline. Working with a local consultant (like DCV) can help expedite the process through proactive follow-ups.
Q: Do I need to visit Nepal to set up the company?
A: Not necessarily for every step, but it can help. Nepal’s online systems mean that name reservation and document submission can be done remotely. You can email documents, and your local agent or partner can file them. Many foreign investors grant Power of Attorney to a local representative (lawyer or consultant) to handle the process without the investor being physically present. That said, you might want to visit at some point to open the bank account (some banks require the account signatories to sign in person) and to get a feel for the operations. Also, when it comes to visas (like obtaining a Business Visa), being present in Nepal to submit your passport to Immigration is needed. In summary, you can incorporate without an immediate visit, but plan to be in Nepal for certain milestones (banking, initial setup, etc.) or have a very trusted representative.
Q: What are the ongoing reporting requirements after incorporation?
A: The ongoing requirements include annual financial statements preparation and audit, holding an annual shareholder meeting, filing an annual return with the Company Registrar, and filing annual tax returns with the Tax Office. You’ll also need to file monthly/quarterly tax returns (for VAT or withholding taxes) as applicable. If you have foreign employees, you must renew work permits and visas annually. Additionally, any changes in the company (e.g., a new director, change in registered address, an increase in capital, etc.) must be officially reported to the OCR within the prescribed time (usually within 15 to 30 days of the change). Basically, stay organized with a compliance calendar – many companies in Nepal hire company secretarial services or accountants to remind them of these deadlines.
Q: Can I repatriate profits and dividends out of Nepal?
A: Yes, Nepalese law allows foreign investors to repatriate profits, dividends, and even the original investment and capital gains, in the currency you invested (e.g., USD), provided you have complied with all regulations. You must have audit reports showing the profits, and you need a tax clearance certificate confirming all due taxes are paid. Then you apply to Nepal Rastra Bank for approval to send out the funds. As long as your documentation is in order, NRB will grant permission and you can transfer the money abroad. Many companies remit dividends annually or reinvest them – the key is doing it through official channels with approval. Repatriation of the original investment (for example, if you sell the company or liquidate) is also permitted, again through NRB, after taxes and any obligations are settled. It’s wise to hire a professional to handle the repatriation paperwork to avoid any snafus.
Q: Is it better to open a branch office or a subsidiary company in Nepal?
A: It depends on your business goals. A branch office is essentially an extension of the foreign parent company. It can carry out business in Nepal (limited to the scope that the parent company does internationally) and must be approved by the OCR and relevant ministry. Branch offices are not separate legal entities, so liabilities ultimately extend to the parent company. They also cannot engage in income-generating activities if they are just liaison offices. A subsidiary company (the incorporation route we’ve been discussing) is a separate Nepali legal entity (even if 100% foreign-owned) and offers limited liability separate from the foreign parent. Most businesses expanding long-term prefer a subsidiary for operational flexibility and liability containment. Branch offices are sometimes used for specific projects or for sectors where having a local company isn’t possible initially. Note that branch registration still requires approvals, and branches have to submit the parent company’s financials annually. In summary, if you want a long-term presence with local operations, a subsidiary is usually the way to go. If you only need a representative presence or a temporary project office, a branch or liaison might suffice.
Q: What visas can foreign investors or expatriate staff get in Nepal?
A: Nepal provides several types of visas for business purposes:
Business Visa: Available to foreign investors or their authorized representatives. Typically granted for one year at a time (multi-entry) and renewable every year as long as the business exists and is in operation. Investors need to show proof of investment (usually a minimum amount, like USD 100,000 brought in) to qualify. Business visas allow you to live in Nepal and conduct business activities but not take up local employment for someone else.
Work Visa: Technically Nepal issues non-tourist visas for foreign employees of companies in Nepal. The company has to get a work permit for the foreign expert from the Labor Department and then the Immigration Department issues the visa. This is usually one year at a time as well, tied to the specific job at the company.
Residential Visa: A special long-term visa for large investors. If you invest significant capital (at least USD 1 million in Nepal, or increase it to that level), you may be eligible for a Residential Visa. This visa is more long-term and is a perk to attract big investors.
Non-Tourist Visa: Nepal has some miscellaneous categories like for volunteers, or those in INGOs, but those wouldn’t apply to a private business scenario typically.
In practice, many foreign owners start with a Business Visa (which is fairly straightforward once your company and FDI are in place). For foreign staff, you’ll go through the work permit route. It’s important to factor in a few weeks for these processes when bringing expats.
Q: Are there any incentives for foreign companies in Nepal?
A: Yes, the government offers various incentives to attract foreign investment:
Tax incentives: Depending on your industry and location, you could get partial income tax holidays. For example, investments in certain “priority” sectors or less developed regions might enjoy a 5-year 100% tax holiday followed by 50% for next few years, etc. Special industries like hydropower or agriculture processing have seen tax rates as low as 20% or exemptions for certain periods.
Custom Duty Exemptions: Import of plant, machinery and equipment for industries often get customs duty concessions or exemptions, especially if you’re producing goods for exportl.
Repatriation & Legal Protection: As mentioned, law guarantees repatriation of profits. Also, Nepal has signed treaties to avoid double taxation and investment protection agreements which minimize the risk of expropriation.
Special Economic Zones (SEZ): If you set up in a Special Economic Zone (like in Bhairahawa or other locations under development), there are extra benefits like zero tax for first 5 years, simplified customs, etc., particularly for export-oriented manufacturing.
One-Stop Service: The government’s one-stop service is itself an incentive in kind – it’s meant to reduce administrative delays (time is money!).
Always inquire based on your specific sector – for instance, IT companies exporting services might get some tax breaks, tourism projects might get customs waivers on hotel equipment, etc. Digital Consulting Ventures or legal advisors usually keep a tab on these incentives and can guide you on what your project may qualify for.
Q: What are some common challenges foreign investors face during registration?
A: Some challenges include:
Bureaucracy and Delays: Despite improvements, the process can involve waiting and following up. Sometimes the approval might be sitting on a desk until nudged.
Documentation Hurdles: If your paperwork isn’t perfectly in line, authorities will send it back for corrections. Differences in formats or expectations can cause frustration. For example, foreign documents not properly notarized or a slight mismatch in the name spelling between your passport and documents can trigger issues.
Changing Regulations: If you started the process under one set of rules and then a new rule comes (not uncommon in emerging markets), it can be confusing. For example, the minimum investment threshold changes or sudden policy shifts might require you to adjust plans.
Coordination: You have to deal with multiple offices (DoI, OCR, NRB, Tax office, etc.). If one is slow, it holds up the next. Keeping track of where your file is can be tough remotely.
Local Nuances: Language barriers (most forms are in Nepali, though English forms are also accepted; still, communication with staff might happen in Nepali). Also, understanding informal practices – like needing to make frequent visits to check on progress – can be new to foreigners used to more automated systems.
Restricted Sectors: Occasionally an investor finds out late that their intended business activity is not open to full foreign investment or requires special permission. Researching the negative list early on avoids this.
The good news is that with the right help and patience, these challenges can be managed. Nepal has been steadily improving the process, and foreign companies from many countries have successfully set up here.
Hopefully, this FAQ has addressed some of your burning questions. If you have more queries or need personalized guidance, consider reaching out to professionals who specialize in Nepalese company setup.
Registering a foreign company in Nepal is a journey that involves careful navigation of legal steps and local procedures. While the process is detailed, it’s certainly achievable and, as many businesses have found, worth the effort to tap into Nepal’s growing market. By understanding the requirements – from government approvals to necessary documents, fees, and compliance duties – you can approach the expansion with confidence and a solid plan.
Nepal in 2025 offers an increasingly investor-friendly climate with streamlined policies like the automatic FDI route and digital portals reducing red tape. There are clear benefits to setting up here: a strategic location between two giant markets (India and China), a young workforce, and opportunities in sectors ranging from tourism and hydropower to technology and manufacturing. Pair those opportunities with the legal protections and incentives now in place for foreign investors, and Nepal becomes an attractive proposition.
Of course, no one says you have to go it alone. Engaging experts such as Digital Consulting Ventures can turn a complex process into a hassle-free experience. With the right support, your company can be up and running in Nepal smoothly – leaving you to focus on your core business growth rather than paperwork.
In summary, foreign company registration in Nepal comes down to understanding the rules, preparing thoroughly, and utilizing the resources at your disposal. We hope this comprehensive guide has demystified the legal requirements and empowered you with knowledge to make your Nepal expansion a success. Good luck on your business journey in Nepal!