If you plan to start a business in Nepal, understanding the country’s licensing and permit framework is critical. Nepal welcomes foreign investment, but it operates under a structured regulatory regime. Foreign companies must secure the right approvals before trading, hiring, or repatriating profits.
This guide explains every license and permit required to start a business in Nepal, when each applies, and how to obtain them efficiently. It is written specifically for foreign founders, multinational firms, and overseas investors seeking a compliant and scalable entry into Nepal.
Licenses and permits are not administrative formalities in Nepal. They define your legal right to operate.
Without the correct approvals, foreign companies face:
Delayed bank account activation
Inability to hire local staff
Restrictions on capital repatriation
Tax penalties and forced closure
Nepal’s regulators link licensing directly to foreign exchange control, tax registration, and labor compliance.
Foreign companies interact with several government bodies. Each plays a distinct role.
Department of Industry (DOI)
Office of Company Registrar (OCR)
Nepal Rastra Bank (NRB)
Inland Revenue Department (IRD)
Department of Labour
Each license is connected. Missing one often blocks the next.
Not all businesses require the same approvals. Licensing depends on ownership structure, sector, and scale of operation.
Company incorporation licenses
Foreign investment approvals
Tax and revenue registrations
Sector-specific operational permits
Every business must first exist as a legal entity.
Office of Company Registrar
Legal incorporation under Nepal’s Companies Act
Recognition as a juridical person
Authority to enter contracts
Private Limited Company (FDI subsidiary)
Branch Office
Liaison Office
Company registration alone does not authorize commercial operations for foreign firms. Additional permits are required.
Foreign ownership triggers mandatory approval under Nepal’s investment laws.
Foreign Investment and Technology Transfer Act (FITTA 2019)
Department of Industry
Any foreign equity participation
Technology transfer agreements
Profit repatriation rights
Authorized shareholding structure
Approved capital amount
Eligibility for profit repatriation
Without this approval, banks will not recognize foreign capital.
After FDI approval, the business must be classified by industry type.
Determines compliance obligations
Defines applicable tax incentives
Enables operational licenses
Service
Manufacturing
Tourism
IT and outsourcing
This certificate is often requested by banks and landlords.
No business may operate without tax registration.
Inland Revenue Department
Permanent Account Number (PAN)
Value Added Tax (VAT), if applicable
VAT is mandatory once turnover exceeds the statutory threshold or if operating in VAT-eligible sectors.
Foreign companies must comply with Nepal’s foreign exchange regime.
Nepal Rastra Bank
Inward remittance of capital
Dividend and profit repatriation
Royalty and service fee payments
NRB approval ensures funds can legally move in and out of Nepal.
Some industries require additional approvals.
IT and software export registration
Tourism and hospitality permits
Manufacturing environmental clearance
Financial and fintech licensing
Sectoral permits are issued by line ministries or regulators.
| Business Model | Core Licenses Required | Additional Permits |
|---|---|---|
| FDI Subsidiary | Company Registration, FDI Approval, PAN, NRB | Industry-specific |
| Branch Office | Branch Registration, DOI Approval, PAN | Limited operations |
| Liaison Office | Liaison License, NRB Approval | No revenue allowed |
| Outsourcing / IT | FDI, Industry Certificate, PAN | Export registration |
This comparison helps foreign firms choose the least restrictive structure.
Foreign companies should follow this sequence.
Name reservation and incorporation
Foreign investment approval
Industry registration
Tax registration (PAN/VAT)
Bank account activation
NRB foreign exchange clearance
Sector-specific licensing
Skipping steps often leads to rejection.
Applying for VAT too early
Under-declaring capital commitments
Selecting the wrong business structure
Missing labor-related registrations
These errors delay operations by months.
Typical processing periods:
Company registration: 3–7 working days
FDI approval: 2–4 weeks
NRB clearance: 1–2 weeks
Timelines depend on documentation quality.
Licenses require ongoing compliance.
Annual company filings
Tax returns and VAT filings
Labor and Social Security registration
Renewal of sector permits
Non-compliance risks suspension.
Foreign companies often appoint local advisors to:
Prepare compliant documentation
Liaise with regulators
Structure FDI efficiently
Ensure repatriation rights
This significantly reduces approval time.
Nepal offers:
Competitive labor costs
English-speaking workforce
Strategic access to India and China
Favorable long-term investment policies
Licensing is structured, not hostile.
To start a business in Nepal, foreign companies must treat licensing as a strategic foundation, not an afterthought. Correct permits unlock banking, hiring, tax compliance, and profit repatriation.
With the right structure and expert guidance, Nepal becomes a low-risk, high-potential market for foreign expansion.
Planning to start a business in Nepal?
Book a compliance consultation to receive a customized licensing roadmap, timelines, and cost breakdown for your sector.
Yes. Any foreign ownership or capital contribution requires approval under FITTA 2019.
No. NRB approval is mandatory for capital inflow and profit repatriation.
Most foreign businesses complete licensing within four to six weeks.
No. VAT applies based on turnover and business sector.
No. Licenses are entity-specific and non-transferable.