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Navigating Nepal's Company Registration: A Guide for Entrepreneurs

Written by Pjay Shrestha | Nov 20, 2023 10:27:37 AM

Starting a business in Nepal requires navigating a series of legal and bureaucratic steps, particularly when it comes to company registration. This guide provides entrepreneurs, including those from overseas, with a detailed roadmap to simplify this process, which is overseen by the Office of the Company Registrar (OCR) in accordance with the Companies Act of 2063 BS (2006 AD)​.

Step-by-Step Registration Process

  1. Choose the Type of Company: Entrepreneurs must decide whether to establish a private limited company, a public limited company, or a one-person company. Each type has different legal requirements and benefits.
  2. Reserve the Company Name: Ensure that the proposed company name is unique and reserve it with the OCR.
  3. Submit the Application: Prepare and submit the application to the OCR, adhering to the prescribed format, fees, and required documents.
  4. Incorporate the Company: The OCR will conduct necessary inquiries, register the company within 15 days of the application, and issue a company registration certificate.
  5. Register for Tax Purposes: Register for VAT and PAN at the Inland Revenue Office​.

Documentation Requirements

The documents required for company registration in Nepal include two copies each of the memorandum of association and the articles of association, consensus agreement (if applicable), and other approvals or licenses for specific types of business. Additionally, a certified copy of the citizenship certificate and other relevant documents as per the OCR’s guidelines are needed​.

Registration Costs

The fees for company registration in Nepal vary depending on the registered capital. Fees for a private company range from NPR 1,000 for capital up to NPR 100,000, to NPR 43,000 for capital over NPR 10,00,00,000, with additional charges for each additional NPR 1,00,000 in capital​.

Registration for Foreign Entrepreneurs

Foreign entrepreneurs must obtain permission to conduct business or make investments in Nepal. The application process includes submitting the required documents, such as proof of the foreigner’s citizenship, a copy of the permit received from the authorised body, and the memorandum of association of the proposed company​.

Registration Timeline

  • Verifying the Company Name: Can be done online at the OCR website, typically in 1 day.
  • Buying a Stamp for the Registration Form: Available at the Post Office, also taking 1 day.
  • Registration at the OCR: This process may take up to 7 days for completion.
  • Making a Rubber Stamp: This is done through a Sealmaker and can be completed in 1 day.
  • Registering for VAT and Income Tax: At the Inland Revenue Office, typically done in 1 day​.

Important Points to Consider

  • Private limited companies must have a minimum of one and a maximum of fifty shareholders. For public limited companies, at least seven founders are required.
  • The Memorandum and Articles of Association should be prepared in clear and precise language. For foreign investments, these documents should be in English, with a Nepali translation also required.
  • Each page of these documents must be signed by all founding shareholders, and at least one witness’s signature is necessary.
  • Financial status of existing companies must be presented if shares are purchased by them​.

Conclusion

Registering a company in Nepal, while complex, can be a rewarding and strategic move for entrepreneurs. Understanding the legal framework, preparing the necessary documentation, and complying with the registration process are crucial steps. For foreign entrepreneurs, additional steps such as obtaining the appropriate permits and ensuring compliance with local laws are imperative. With meticulous planning and adherence to the outlined procedures, entrepreneurs can successfully navigate Nepal’s company registration process, paving the way for a prosperous business venture in this dynamic market.

 

Disclaimer: This article is for informational purposes only and shall not be construed as legal advice, advertisement, personal communication, solicitation or inducement of any sort from the firm or any of its members. The firm shall not be liable for consequences arising out of any action undertaken by any person relying on the information provided herein.