When foreign investors explore the types of companies in Nepal, one structure consistently stands out: the Limited Liability Company, commonly incorporated as a Private Limited Company.
For international founders, startups, and multinational groups, this entity offers the best balance of legal protection, ownership flexibility, and regulatory acceptance under Nepalese law.
In this guide, we provide the most authoritative explanation of limited liability companies in Nepal, written specifically for foreign companies evaluating market entry, FDI structuring, or long-term operations.
Nepal’s corporate framework is governed primarily by the Companies Act, 2006, supported by foreign investment and tax laws. Broadly, the recognized types of companies in Nepal include:
Private Limited Company
Public Limited Company
Branch Office of a Foreign Company
Liaison (Representative) Office
Non-Profit Company
Among these, the Private Limited Company (Ltd.) is the most commonly used limited liability vehicle for foreign investors.
A limited liability company in Nepal is a legally separate entity where:
Shareholders’ liability is limited to unpaid share capital
The company can own assets, enter contracts, and sue or be sued
Ownership may be 100% foreign (subject to sector approval)
This structure aligns closely with private limited companies in the UK, Australia, Singapore, and the EU, making it familiar to foreign founders.
Shareholders are not personally liable for company debts beyond their capital contribution.
This risk insulation is a key reason foreign investors prefer this structure.
The company exists independently from its shareholders and directors.
Contracts, licenses, and bank accounts remain valid regardless of ownership changes.
Under Nepal’s FDI regime, foreign nationals and companies may own up to 100% of a Nepalese company in approved sectors.
Minimum shareholders: 1
Maximum shareholders: 50 (private company)
Corporate shareholders allowed
Foreign investors may repatriate:
Dividends
Capital gains
Loan repayments
Royalties and technical fees
Subject to tax clearance and central bank approval.
Foreign investors evaluating the types of companies in Nepal typically select this structure because it allows:
Full commercial operations
Local hiring and payroll compliance
Long-term scalability
Asset ownership and IP protection
It is the only structure that supports revenue generation, unlike liaison offices.
| Feature | Limited Liability Company | Branch Office | Liaison Office |
|---|---|---|---|
| Legal status | Separate Nepal entity | Extension of foreign company | No commercial entity |
| Revenue generation | Yes | Yes | No |
| Liability | Limited to share capital | Parent company liable | Parent company liable |
| Local hiring | Yes | Limited | Very limited |
| FDI approval | Required | Required | Required |
| Best for | Long-term operations | Project-based entry | Market research |
Insight:
For foreign companies planning multi-year operations, limited liability companies in Nepal provide the strongest legal and operational foundation.
While no universal statutory minimum exists, in practice:
NPR 1–2 million is common for service companies
Higher capital may be required for regulated sectors
FDI-based companies must declare capital during approval.
Foreign shareholders must prepare:
Certificate of Incorporation (parent company)
Memorandum & Articles of Association
Board resolution approving Nepal investment
Passport copies of directors and shareholders
Power of Attorney
All documents must be notarized and apostilled.
Name reservation at Company Registrar
FDI approval from the investment authority
Company registration under Companies Act
Tax registration (PAN/VAT)
Bank account opening
Capital injection through banking channels
Average timeline: 4–8 weeks
Limited liability companies in Nepal must comply with:
Annual financial statements
Tax filings and audits
Social Security Fund (SSF) contributions
Board and shareholder records
Failure to comply may result in penalties or restrictions on repatriation.
Standard corporate income tax applies
Withholding tax on dividends
Transactions with foreign parent companies must follow arm’s-length principles.
A limited liability company can:
Hire Nepalese and expatriate staff
Sponsor work visas
Register employees in SSF
Issue local employment contracts
This is critical for foreign companies building offshore or regional teams.
Foreign investment is allowed in most sectors including:
IT and software development
Consulting and professional services
Manufacturing
Renewable energy
Education and training
Some sectors remain restricted or capped.
Choosing a liaison office when revenue is planned
Under-declaring capital
Ignoring SSF and labor compliance
Delaying tax registrations
Professional structuring avoids costly corrections later.
If your goal includes commercial operations, hiring, scalability, and profit repatriation, a limited liability company in Nepal is almost always the correct choice.
Branch and liaison offices are transitional tools, not long-term vehicles.
Yes. In Nepal, the private limited company is the standard form of limited liability company.
Yes, in approved sectors, foreign investors may own 100% equity.
Typically 4–8 weeks, depending on FDI approval and document readiness.
There is no fixed statutory minimum, but practical thresholds apply for FDI cases.
Yes. Dividends and capital can be repatriated after tax clearance and approvals.
For foreign companies evaluating the types of companies in Nepal, the limited liability company offers unmatched advantages.
It combines global familiarity with local compliance, enabling sustainable growth, risk protection, and long-term market access.
If you want certainty, scalability, and regulatory clarity, this structure is the gold standard.
Planning to set up a limited liability company in Nepal?
Book a consultation with our FDI and corporate structuring specialists to receive a tailored incorporation roadmap, compliance checklist, and timeline.