Legal Requirements to Register a Company in Nepal: Company Act Explained

If you are a foreign investor asking how to register a company in Nepal, the first question is always legal compliance. Nepal welcomes foreign investment, but incorporation must strictly follow the Companies Act and related regulations.

This guide explains the legal requirements to register a company in Nepal, what the Companies Act actually requires, and how foreign companies can comply without delays, rejections, or regulatory risk.

You will learn the exact documents, approvals, timelines, and obligations. This article is written for founders, CFOs, and expansion leaders who want certainty before entering Nepal.

What Law Governs Company Registration in Nepal?

Company registration in Nepal is primarily governed by:

• Companies Act, 2063 (2006)
• Foreign Investment and Technology Transfer Act (FITTA), 2019
• Industrial Enterprises Act, 2020
• Income Tax Act, 2002
• Labour Act, 2017

All companies are registered with the Office of the Company Registrar (OCR).

Foreign-owned companies must additionally comply with foreign investment approvals before incorporation.

Types of Companies You Can Register in Nepal

Before understanding how to register a company in Nepal, you must choose the correct legal structure.

Common company structures

• Private Limited Company
• Public Limited Company
• Branch Office of a Foreign Company
• Liaison Office
• Partnership Firm (not suitable for FDI)

Most foreign companies choose

A Private Limited Company because it allows full operational activity, local hiring, and profit repatriation.

Legal Requirements to Register a Company in Nepal

This section explains the mandatory legal requirements under the Companies Act.

Minimum shareholders and directors

• Minimum shareholders: 1
• Maximum shareholders: 101
• Minimum directors: 1

Foreign nationals can be 100 percent shareholders.

Registered office address

Every company must have a registered office address in Nepal.
Virtual addresses are not accepted.

Company name approval

The proposed company name must be:

• Unique
• Not misleading
• Not identical or similar to existing companies
• Consistent with business objectives

Name approval is done through the OCR online system.

Memorandum of Association (MOA)

The MOA legally defines:

• Company objectives
• Capital structure
• Shareholding details
• Liability of shareholders

The OCR closely scrutinizes objectives for compliance.

Articles of Association (AOA)

The AOA governs internal management:

• Director powers
• Share transfers
• Meetings and voting
• Dividend distribution

Step-by-Step: How to Register a Company in Nepal (Legal Process)

This is the exact legal sequence required by law.

1. Name reservation at OCR

Submit up to three proposed names online.

2. Draft MOA and AOA

Documents must comply with Companies Act wording standards.

3. Submit incorporation application

Upload documents, shareholder details, and pay government fees.

4. Obtain certificate of incorporation

Issued by the Office of the Company Registrar.

5. Register with tax office

PAN and VAT registration is mandatory post-incorporation.

6. Foreign investment approval (if applicable)

Foreign shareholders require approval under FITTA before capital injection.

Additional Legal Requirements for Foreign Companies

Foreign investors must meet extra compliance obligations.

FITTA approval

Foreign Direct Investment requires approval from:

• Department of Industry, or
• Investment Board Nepal (large projects)

Capital commitment

Minimum foreign investment threshold currently stands at NPR 20 million.

Repatriation compliance

Profit repatriation requires:

• Tax clearance
• Central bank compliance through Nepal Rastra Bank

Documents Required to Register a Company in Nepal

For foreign shareholders

• Passport copies
• Board resolution
• Certificate of incorporation (parent company)
• Power of attorney
• Notarised and apostilled documents

For the company

• Approved company name
• MOA and AOA
• Registered office lease agreement

Government Fees and Statutory Costs

Additional costs include translation, notarisation, and compliance filings.

Compliance Obligations After Registration

Registering a company is not the end.

Mandatory ongoing compliances

• Annual return filing
• Financial statements submission
• Tax filings
• Labour registration
• Social Security Fund enrollment

Non-compliance can result in penalties or company suspension.

Common Legal Mistakes Foreign Companies Make

Avoid these frequent errors:

• Incorrect business objectives
• Missing foreign investment approval
• Improper document notarisation
• Assuming online registration means no local presence
• Ignoring post-incorporation compliance

How Long Does It Take to Register a Company in Nepal?

Average timelines:

• Name approval: 1–2 working days
• Company registration: 3–5 working days
• Tax registration: 1–2 working days
• FDI approval: 2–4 weeks

Delays usually arise from documentation errors.

Why Legal Interpretation Matters Under the Companies Act

The Companies Act is principle-based, not checklist-based.

That means:

• OCR officers interpret objectives strictly
• Vague clauses are rejected
• Foreign ownership disclosures are examined carefully

Professional drafting reduces rejection risk significantly.

When Should You Use Professional Support?

You can technically register yourself.
However, foreign companies should seek support when:

• Applying for FDI approval
• Structuring shareholding
• Planning repatriation
• Hiring employees
• Drafting compliant MOA objectives

How to Register a Company in Nepal Successfully as a Foreign Company

To succeed:

1. Confirm permitted business activities

2. Secure FDI approval early

3. Draft legally precise documents

4. Plan tax and repatriation strategy

5. Prepare for ongoing compliance

This reduces risk and saves months of correction work.

Conclusion

Understanding how to register a company in Nepal requires more than filling an online form. The Companies Act sets clear legal obligations, and foreign companies face additional scrutiny under investment and tax laws.

With the right preparation, Nepal offers a stable and cost-efficient base for regional operations.

Call to Action

If you are planning company registration, foreign investment approval, or expansion into Nepal, book a free consultation with our legal and compliance specialists.
We help foreign companies register, comply, and operate in Nepal with confidence.

FAQs: How to Register a Company in Nepal

Is 100 percent foreign ownership allowed in Nepal?

Yes. Most sectors allow full foreign ownership, subject to FITTA approval and minimum investment thresholds.

Can a foreign director live outside Nepal?

Yes. Directors can be non-resident. A local authorised representative is required.

Do I need a lawyer to register a company in Nepal?

No. But foreign investors benefit from professional guidance due to regulatory complexity.

Can profits be repatriated outside Nepal?

Yes. Repatriation is allowed after tax clearance and central bank approval.

Is online registration fully digital?

Partially. Submission is online, but physical verification and compliance remain mandatory.