Types of companies in Nepal is one of the first questions foreign founders and NRNs ask when exploring the Nepali market. Nepal offers several legally recognised entry structures for foreign ownership. Each comes with different rights, restrictions, tax outcomes, and compliance burdens. Choosing the wrong structure can delay approvals, block profit repatriation, or trigger avoidable compliance risks.
This guide explains every foreign-owned and NRN-eligible company type in Nepal, how they differ, and when each model works best. It is written for international founders, CFOs, legal heads, and investors who want clarity, not jargon.
Nepal regulates foreign participation to balance investment inflows with domestic protection. As a result, foreign companies cannot use all business forms available to locals.
Foreign investors typically enter Nepal under one of these regulated pathways:
Foreign Direct Investment (FDI) company
Branch office
Liaison office
Joint venture with Nepali partners
NRN-owned company (special regime)
Each pathway is governed by Nepal’s foreign investment and company laws and overseen by multiple authorities.
Foreign company formation in Nepal is primarily regulated by:
Companies Act, 2006
Foreign Investment and Technology Transfer Act (FITTA), 2019
Industrial Enterprises Act, 2020
Income Tax Act, 2002
Nepal Rastra Bank (NRB) foreign exchange directives
Together, these laws define which types of companies in Nepal foreign entities may form, operate, and exit.
Below are the only legally permitted company structures for foreign ownership in Nepal.
An FDI company is the most common and flexible option for foreign investors.
An FDI company is a Nepali private limited company with partial or 100 percent foreign ownership, approved under FITTA 2019.
Separate legal entity incorporated in Nepal
Can be 100 percent foreign-owned
Eligible for profit and capital repatriation
Can hire local and foreign employees
May operate commercially across approved sectors
NPR 20 million per foreign investor
Applies per project, not per shareholder
Tech startups
IT and outsourcing firms
Manufacturing and energy projects
Professional services and consulting firms
Nepal provides a special investment regime for Non-Resident Nepalis.
Nepali citizens residing abroad with foreign citizenship
Excludes NRNs residing in SAARC countries
Treated as foreign investors for ownership rights
Can invest under FDI or NRN-specific thresholds
Easier local market understanding and staffing
Hospitality and tourism
IT services and digital agencies
Education and training institutions
A branch office allows a foreign company to operate in Nepal without forming a new legal entity.
Not a separate legal entity
Parent company bears full liability
Registered with the Office of Company Registrar
Requires NRB approval for fund inflows
Revenue-generating activities allowed
Must align strictly with parent company scope
Higher scrutiny from regulators
More complex tax treatment
Difficult exit compared to FDI companies
A liaison office is the most restrictive foreign presence model.
Market research
Relationship building
Representation and coordination
Generate revenue
Sign commercial contracts
Invoice Nepali clients
Market entry testing
Pre-FDI feasibility studies
Government and NGO coordination
Foreign investors may form a joint venture with Nepali partners.
Incorporated as a private or public company
Shareholding split between foreign and local parties
Governed by shareholder agreements
Regulated sectors with local participation norms
Infrastructure and hydropower projects
Industries requiring land access or local licenses
| Company Type | Ownership | Revenue Allowed | Legal Entity | Repatriation | Best Use Case |
|---|---|---|---|---|---|
| FDI Company | Up to 100% foreign | Yes | Yes | Yes | Long-term operations |
| NRN Company | NRN foreign status | Yes | Yes | Yes | Diaspora-led ventures |
| Branch Office | Foreign parent | Yes | No | Limited | Extension of HQ |
| Liaison Office | Foreign parent | No | No | No | Market research |
| Joint Venture | Shared | Yes | Yes | Yes | Regulated sectors |
Selecting the right structure depends on commercial intent, risk appetite, and timeline.
Do you plan to earn revenue in Nepal?
Do you need profit repatriation rights?
Is full foreign ownership required?
How long will you operate in Nepal?
Is regulatory exposure a concern?
Your answers determine the most suitable company type.
Regardless of structure, foreign companies must comply with:
Annual company filings
Tax registration and returns
NRB reporting on fund inflows
Labour and social security compliance
Sector-specific licenses
Failure to comply may block dividend repatriation or trigger penalties.
Choosing liaison offices for commercial activity
Underestimating minimum capital requirements
Delaying NRB approvals
Ignoring exit and repatriation planning
Using nominee structures improperly
Avoiding these mistakes saves months of delay.
Among all types of companies in Nepal, FDI companies offer the best balance of control, scalability, and legal certainty.
Full commercial rights
Clear repatriation framework
Easier talent hiring
Better valuation and exit options
For most foreign startups and service firms, FDI is the optimal structure.
This article reflects current Nepali legislation, regulator practice, and on-ground incorporation experience. It is designed for decision-makers who require accurate, compliant, and actionable guidance, not generic summaries.
Understanding the types of companies in Nepal available to NRNs and foreign investors is the foundation of a successful market entry. Each structure serves a specific purpose. Selecting the right one from day one protects your capital, timelines, and future exit.
If you are planning to enter Nepal, expert structuring advice is not optional. It is strategic.
Planning to register a foreign-owned company in Nepal?
Book a consultation to receive a custom entry-structure recommendation, compliance roadmap, and cost timeline tailored to your business.
Yes. Many sectors allow 100 percent foreign ownership through an FDI company, subject to sector approval.
Yes. NRNs can fully own companies under foreign investment provisions, except in restricted sectors.
The minimum foreign investment threshold is NPR 20 million per investor per project.
No. Liaison offices are strictly non-commercial and cannot invoice or earn income.
FDI companies offer the clearest and most reliable profit and capital repatriation framework.