Office of the Company Registrar Nepal: A Guide for Foreign Businesses

The Office of the Company Registrar (OCR) in Nepal is the central authority responsible for the registration, regulation, and administration of companies operating within the country. For foreign companies aiming to establish a presence in Nepal, understanding the role and processes of the OCR is crucial.

Functions of the Office of the Company Registrar

The OCR operates under the Ministry of Industry, Commerce, and Supplies and is tasked with:

• Company Registration: Facilitating the incorporation of various business entities, including private and public limited companies, branch offices, and liaison offices of foreign companies.
• Regulation and Compliance: Ensuring that companies adhere to the Companies Act, 2006, and other relevant laws by monitoring compliance and maintaining company records.
• Information Management: Maintaining a comprehensive database of registered companies and providing public access to company information.

Registration Process for Foreign Companies

Foreign companies can establish their presence in Nepal through:

1. Incorporating a Local Subsidiary: Registering a private or public limited company as a separate legal entity.
2. Registering a Branch Office: Operating as an extension of the parent company.
3. Establishing a Liaison Office: Setting up a representative office for non-commercial activities.

Steps for Registering a Branch or Liaison Office

The process involves several key steps:

1. Obtain Approval from Relevant Authorities: Secure permission from the appropriate government body overseeing the specific industry sector.
2. Prepare Necessary Documentation: This includes notarized copies of the parent company's incorporation certificate, Memorandum and Articles of Association, board resolutions, and details of directors and representatives.
3. Submit Application to the OCR: File the application along with required documents through the OCR's online portal.
4. Registration and Certification: Upon satisfactory review, the OCR registers the branch or liaison office and issues a registration certificate.

Required Documentation

Key documents include:

• Notarized copies of the parent company's charter documents and their Nepali translations.
• Board resolution authorizing the establishment of the branch or liaison office in Nepal.
• Details of directors, including names, addresses, and nationalities.
• Appointment letter and citizenship certificate of the authorized representative in Nepal.
• Power of attorney designating a person to receive legal documents on behalf of the company.

Compliance Requirements

Post-registration, foreign companies must adhere to:

• Tax Registration: Obtain a Permanent Account Number (PAN) from the Inland Revenue Department for tax purposes.
• Local Registration: Register the office with the local Ward Office.
• Financial Reporting: Appoint an auditor, prepare annual financial statements, and submit them to the OCR within six months of the fiscal year's end.
• Parent Company Reporting: Submit the parent company's balance sheet to the OCR within three months of its preparation.

Registration Fees

The registration fee varies based on the proposed investment amount:

• Up to NPR 10 million: NPR 15,000
• NPR 10 million to NPR 100 million: NPR 40,000
• NPR 100 million to NPR 200 million: NPR 70,000
• NPR 200 million to NPR 300 million: NPR 100,000
• NPR 300 million to NPR 400 million: NPR 130,000
• NPR 400 million to NPR 500 million: NPR 160,000
• Above NPR 500 million: Additional NPR 3,000 for each additional NPR 10 million

If the proposed investment amount is not specified, a lump sum fee of NPR 100,000 is applicable.

Key Considerations for Foreign Companies

• Permissible Activities: Branch offices can engage in income-generating activities similar to those of the parent company, while liaison offices are restricted to non-commercial functions.
• Legal Status: Branch and liaison offices are not separate legal entities; the parent company remains liable for their operations.
• Sectoral Restrictions: Certain sectors may have limitations on foreign ownership or specific regulatory requirements.

Conclusion

Navigating the registration process with the Office of the Company Registrar is a critical step for foreign companies seeking to operate in Nepal. Engaging with local legal experts can facilitate compliance with regulatory requirements and ensure a smooth establishment process.

Disclaimer:
This article is for informational purposes only and not legal or professional advice. Please consult a qualified expert in Nepal for specific guidance.