Nepal Company Registration Process: From Name Approval to PAN

Nepal is fast emerging as a hub for foreign investment in South Asia. Whether you're an IT firm, an energy company, or a consultancy, the country offers a promising gateway to two major markets: India and China. Moreover, the government has taken substantial steps to simplify foreign company registration, encouraging international entities to explore business opportunities within its borders.

However, navigating a foreign bureaucracy can be daunting. If you're planning to incorporate in Nepal, understanding the company registration process from start to finish is essential.

In this comprehensive guide, we walk you through the full company registration lifecycle—from name reservation to tax registration (PAN/VAT)—with a specific focus on foreign company registration in Nepal. You'll also learn how Digital Consulting Ventures (DCV) can help you register your company remotely and compliantly.

Table of Contents

1. Can Foreigners Register a Company in Nepal?

2. Types of Companies Foreigners Can Register

3. Benefits of Incorporating in Nepal

4. Overview of the Registration Process

5. Step 1: Name Reservation with the Office of the Company Registrar (OCR)

6. Step 2: Drafting and Preparing Legal Documents

7. Step 3: Company Registration Application at OCR

8. Step 4: Foreign Investment Approval (FITTA Process)

9. Step 5: PAN and VAT Registration with the Inland Revenue Department (IRD)

10. Step 6: Bank Account Opening and Capital Injection

11. Step 7: Obtaining Industry-Specific Licenses (If Applicable)

12. Timeline for Completion

13. Post-Registration Compliance and Operational Setup

14. Why Choose Digital Consulting Ventures?

15. FAQs

16. Sources

1. Can Foreigners Register a Company in Nepal?

Yes. Nepal's legal framework, primarily governed by the Companies Act, 2006 and the Foreign Investment and Technology Transfer Act (FITTA), 2019, allows foreign nationals and companies to fully or partially own businesses in Nepal.

Foreign investors can:

• Establish a Private Limited Company under FITTA

• Open a Branch Office of their existing foreign company

• Set up a Liaison Office for market research and representation

Ownership can be up to 100% foreign in most sectors, provided regulatory conditions and investment thresholds are met.

2. Types of Companies Foreigners Can Register

Most foreign companies opt for the Private Limited model under FITTA to operate as independent legal entities.

3. Benefits of Incorporating in Nepal

• Access to South Asia: Proximity to India and China opens large export markets.

• Affordable Talent: Skilled workforce at competitive salary benchmarks.

• Double Taxation Avoidance: Agreements in place with countries like India, China, and the UK.

• IT Outsourcing Hub: Growing ecosystem for software and IT-enabled services.

• Sector Liberalization: Many sectors fully open to FDI with 100% foreign ownership.

• Government Support: FITTA 2019 aims to streamline investment procedures.

4. Overview of the Registration Process

The process typically includes:

1. Name reservation

2. Drafting and notarizing legal documents

3. Submitting the registration application to OCR

4. Applying for foreign investment approval via DOI (if applicable)

5. Obtaining PAN/VAT from the tax authority (IRD)

6. Opening a bank account and injecting the capital

7. Registering with the Social Security Fund (if hiring)

8. Acquiring additional industry-specific licenses, if required

Each of these stages has its own documentation, procedures, and processing times.

5. Step 1: Name Reservation with the Office of the Company Registrar (OCR)

The first step is to check and reserve your company name through the OCR's online portal. Names must:

• Be unique and not already registered

• Reflect the nature of the business

• Not violate trademarks or local sensitivities

Documents Needed:

• Online application form

• Passport copy of applicant (foreigner or authorized rep)

Timeline: 1–2 working days

DCV assists with name checks, translation into Nepali, and application filing.

6. Step 2: Drafting and Preparing Legal Documents

This step is crucial for ensuring your company meets Nepalese regulatory and investment standards.

Core Documents Include:

• Memorandum of Association (MoA)

• Articles of Association (AoA)

• Board Resolution (from parent company or shareholders)

• Power of Attorney (POA) authorizing a local rep

• Project Proposal (for FITTA)

• Lease Agreement or proof of local address

• Passport copies of directors/shareholders

All documents must be:

• Notarized in the country of origin

• Translated into Nepali by a licensed translator

• Submitted both in hard and soft copy

7. Step 3: Company Registration Application at OCR

After name approval and document preparation, your registration application is submitted to OCR. If approved, you receive:

• Company Registration Certificate

• Registration Number

• Digitally signed MoA and AoA

Fee Structure: Fees range based on authorized capital:

• Up to NPR 10 million: NPR 15,000

• NPR 10–100 million: NPR 40,000

• Higher tiers based on progressive slabs

Timeline: 7–10 working days

8. Step 4: Foreign Investment Approval (FITTA Process)

For 100% foreign-owned companies, FITTA approval is mandatory. This is done via the Department of Industry (DOI).

Requirements:

• Minimum capital: NPR 20 million (~USD 150,000)

• Board resolution for investment

• Proposed business plan

• Foreign investor KYC and passport copies

• Capital transfer plan

Additional Documents:

• Draft employment plan

• Technology transfer clause (if applicable)

• Sector-specific approvals (e.g., hydropower, telecom)

Timeline: 20–40 working days

9. Step 5: PAN and VAT Registration with IRD

Upon OCR approval, companies must obtain a Permanent Account Number (PAN) from the Inland Revenue Department.

Process:

• Application submission

• Tax office verification visit

• PAN certificate issuance

VAT is required if:

• Expected turnover exceeds NPR 2 million

• Operating in VAT-applicable sectors (retail, consulting, etc.)

Documents Required:

• Lease agreement

• Citizenship copy of the landlord

• Office photos with nameplate

• Company certificate

Timeline: 2–5 working days

10. Step 6: Bank Account Opening and Capital Injection

To activate the company, you must open a bank account in Nepal and inject the committed capital.

Requirements:

• Company registration documents

• PAN certificate

• FITTA approval letter

• Passport and POA of authorized signatory

Steps:

1. Open a temporary bank account

2. Transfer investment via SWIFT code from foreign bank

3. Get proof of capital injection for DOI endorsement

11. Step 7: Obtaining Industry-Specific Licenses (If Applicable)

Some sectors require additional licenses before starting operations. Examples include:

• Telecom: Approval from the Nepal Telecommunications Authority

• Hydropower: Ministry of Energy clearance

• Education/Training: Ministry of Education certification

• Travel/Tourism: Nepal Tourism Board registration

DCV coordinates with relevant ministries to expedite these processes.

12. Timeline for Completion

Total Estimated Time: 4–8 weeks for most industries; longer if special licenses are required.

13. Post-Registration Compliance and Operational Setup

After successful registration, foreign companies must:

• File annual financial reports to OCR

• Submit monthly VAT returns and annual tax returns

• Register with Social Security Fund (SSF) if hiring staff

• Maintain board minutes and statutory books

• Renew industry-specific licenses

DCV provides:

• Bookkeeping and accounting

• Payroll processing

• Tax compliance

• HR advisory and recruitment services

14. Why Choose Digital Consulting Ventures?

Digital Consulting Ventures (DCV) is Nepal's leading consulting firm for foreign company setup. We offer:

• End-to-end registration services

• Local address and virtual office options

• Local nominee directors and representatives

• Full FITTA approval management

• Document notarization and courier handling

• PAN/VAT, SSF, labor and tax registrations

• HR, recruitment, and visa assistance

Our team consists of bilingual legal experts, chartered accountants, and regulatory advisors. We make incorporation easy—even if you're based abroad.

15. FAQs

Q1: Can I register a company in Nepal without being physically present?
Yes. With POA and local representation, all steps can be completed remotely.

Q2: Do I need a local partner to register a company?
No. 100% foreign ownership is permitted in most sectors.

Q3: What is the minimum investment for foreign companies?
NPR 20 million (~USD 150,000), as per FITTA.

Q4: Can I use a virtual office for company registration?
Yes. DCV provides compliant registered office services.

Q5: What happens if I don't comply with FITTA or tax rules?
Fines, business suspension, or rejection of fund repatriation. DCV ensures compliance.

Q6: Can DCV help with work permits for foreign staff?
Yes. We assist with visas, labor approvals, and employee onboarding.