Company registration in Nepal: step-by-step guide for 2025

Company registration in Nepal is straightforward when you follow the right sequence. In 2025, foreign companies benefit from clearer FDI rules, a One-Stop Service Centre, and online filings. This guide explains entity options, approvals, documents, timelines, and compliance so you can launch fast and stay audit-ready.

You’ll get a practical, step-by-step checklist, a comparison table (subsidiary vs branch vs liaison), and answers to “People Also Ask.” We also reference core laws and official guidelines so your team can validate every step.

Who this guide is for

• Foreign founders and CFOs setting up in Nepal

• Legal, tax, and compliance teams supporting market entry

• VCs and PE firms evaluating portfolio expansions

• Global HR and mobility leaders planning staffing in Nepal

Snapshot: How foreign investment works in 2025 

• Entity choices: Wholly-owned Private Limited (subsidiary), Branch Office, or Liaison/Representative Office.

• Approvals: Most foreign projects go through the Department of Industry (DOI) under the One-Stop Service Centre (OSSC). Very large or strategic projects go to Investment Board Nepal (IBN).

• Minimum foreign investment (general): NPR 20 million per project (policy in effect and referenced by DOI guidance through 2024–2025). Certain ICT activities can be exempt from the minimum under the automatic route as per DOI communications.

• Negative list: Some primary agriculture, cottage industries, and selected sensitive activities remain closed or restricted to foreign investors.

• Forex & repatriation: Capital inflows and profit repatriation proceed via Nepal Rastra Bank (NRB) once taxes and filings are cleared.

• Company filing: Office of the Company Registrar (OCR) handles name approval and incorporation through its e-Services portal.

• Tax IDs & returns: PAN (tax ID) and VAT (if applicable) with the Inland Revenue Department (IRD), then routine filings and annual audit.

Good to know: Nepal’s Companies Act (2063/2006), FITTA (2019) + Rules (2021), Industrial Enterprises Act (2020), Income Tax Act (2002), VAT Act (1996), Labor Act (2017), and Foreign Exchange Regulation Act (1962) anchor the process.

Step-by-step: From decision to “ready to trade”

Step 1: Choose the right vehicle

A. Private Limited Subsidiary (most common)

• Separate legal entity in Nepal.

• 100% foreign ownership usually allowed (unless restricted sector).

• Broad scope to invoice locally, hire, and sign contracts.

B. Branch Office

• Extension of the foreign parent.

• Allowed to earn revenue only within approved scope.

• Often chosen for short-term projects or regulated sectors.

C. Liaison/Representative Office

• No revenue-generating activity in Nepal.

• Market research, promotion, coordination only.

Decision factors: sector permissions, tax profile, speed, brand control, and planned scale.

Step 2: Confirm FDI route and approving authority

• DOI (OSSC): standard FDI approvals and most industries.

• IBN: very large or strategic investments (e.g., multi-billion rupee or marquee projects).

• Sector regulators: telecom, insurance, banking, energy, healthcare, etc.

Pro tip: Check whether your activity is on the Negative List. If it is, consider a different model (e.g., services instead of primary production) or structure (e.g., contract manufacturing).

Step 3: Name check and reservation (OCR)

• Prepare 2–3 name options that reflect your objects.

• Avoid prohibited or misleading words.

• Reserve the name via OCR e-Services.

Outcome: name reservation letter.

Step 4: Draft constitutional documents

• Memorandum of Association (MOA) and Articles of Association (AOA) that match your business objects and FDI approval.

• State share capital, shareholding, registered office, directors, and authorised signatories.

• Prepare board resolutions from the parent approving investment and signatories.

Language & notarisation: English is typical for foreign investors; notarise/apostille as required. Keep Nepali translations ready where authorities request them.

Step 5: File the incorporation (OCR)

• Submit MOA, AOA, director/ shareholder KYC, address proofs, photos, and declarations (including beneficial ownership disclosure).

• Pay government fees (based on authorised capital slabs).

• Track OCR queries and respond promptly.

Outcome: Certificate of Incorporation and Company Registration Number.

Step 6: Obtain FDI approval (DOI or IBN)

• File investment application with project profile, financials, parent documents, and source of funds.

• Align project cost with the minimum foreign investment rule (NPR 20 million general threshold; policy flexibility for certain ICT activities).

• Specify technology transfer, if any (royalties, technical know-how, or trademark license).

Outcome: FDI Approval Letter with permitted activities and equity composition.

Step 7: NRB approval for foreign currency inflow

• Open an FDI collection account at an A-class commercial bank.

• Apply to NRB for inward remittance approval and subsequent repatriation rights.

• Remit capital through banking channels quoting the approval details.

Outcome: NRB approval; bank evidences each inflow for your share register.

Step 8: Tax registrations and local licenses

• PAN (tax ID) at IRD; VAT if your activity crosses thresholds or is VAT-mandated.

• Local municipality trade/operating license if required by your location and activity.

• Sector permits where applicable (e.g., health import license, ISP license).

Step 9: Post-incorporation compliance

• Share allotment & share register updated after remittance.

• Board meeting to adopt policies, appoint auditors, and approve bank signatories.

• Employment: issue written contracts; follow Labor Act 2017; enroll employees to social security where applicable.

• Accounting: maintain books, with annual audit and AGM; file annual returns with OCR and IRD.

Document checklist (FDI + incorporation)

Corporate documents (parent):

• Certificate of incorporation, charter, and good-standing letter

• Latest shareholding and board list

• Board resolution approving Nepal investment

• Beneficial ownership declaration

KYC & signatories:

• Passports of directors/authorised signatories

• Photos and addresses

• Power of Attorney for local submissions

Project & financials:

• Business plan and 3-year financial projections

• Capital structure and funding schedule

• Technology/brand license terms (if any)

Local documents:

• Office lease or address proof in Nepal

• Draft MOA/AOA reflecting approved objects

• Auditor consent letter (if required)

Timelines you can plan for (typical ranges)

• Name reservation (OCR): 1–3 business days

• MOA/AOA drafting & notarisation: 3–7 business days

• Incorporation (OCR review & approval): 3–10 business days

• FDI approval (DOI/IBN): 2–4 weeks for standard cases

• NRB approval & first remittance: 1–2 weeks

• PAN/VAT and municipality license: 1–5 business days

• Bank account operational: 1–3 business days after KYC

Note: Timelines vary by sector, completeness of file, and public holidays. Build buffers.

Costs and capital: what to expect

• Authorised capital & fees: Government fees scale with authorised capital slabs.

• Minimum foreign investment: NPR 20 million (general), with policy-level ICT exceptions under automatic route.

• Professional fees: Legal, translation, audit, and secretarial support vary by complexity.

• Ongoing: Annual audit, tax filings, and license renewals.

Tip for CFOs: Model paid-up tranches aligned to milestones (fit-out, first hires, regulatory approvals) to optimise cash use and interest on idle capital.

Taxes and payroll: essentials for foreign founders

• Corporate income tax: Standard rates apply by sector. Incentives exist for priority/remote industries in the Industrial Enterprises Act and annual Finance Acts.

• Withholding tax: On services, interest, royalties, and dividends, subject to domestic rules and any applicable treaties.

• Indirect taxes: VAT applies to most goods and many services.

• Payroll: Written contracts, overtime rules, leave, and benefits under the Labor Act 2017; employer contributions to the Social Security Fund follow the Social Security Act/Rules where applicable.

Always confirm sector-specific rates and any treaty positions with a Nepal tax advisor before invoicing or repatriation.

Repatriation and foreign exchange

• Permitted remittances: dividends, loan principal/interest, royalty/technical fees, lease rentals, and sale proceeds (on exit), subject to documentary compliance.

• Pre-conditions: tax clearance, board approvals, and NRB permission referencing the original FDI approval and share certificates.

• Banking: Use designated A-class banks, maintain proper purpose codes, and keep a reconciliation file (remittances, contracts, tax proofs).

Governance, audit, and annual calendar

• Hold your AGM within the statutory period after financial year end.

• File annual returns and audited financials with OCR and IRD on time.

• Maintain statutory registers: members, directors, charges, and beneficial owners.

• Record board resolutions for key actions (capital calls, banking, contracts).

• Implement risk policies: related-party controls, procurement, data protection, KYC/AML where relevant.

Common pitfalls (and how to avoid them)

1. Mismatch between MOA/AOA and FDI approval

   • Keep objects and activity codes consistent across OCR, DOI/IBN, and NRB.

2. Treaty assumptions

   • Confirm if a double-tax treaty exists and how it applies before paying royalties or services.

3. Negative-list surprises

   • Validate sector eligibility early. If restricted, explore a different activity or structure.

4. Weak documentation for NRB

   • Keep a capital file: approvals, SWIFT slips, bank credits, share allotments, tax receipts.

5. Ignoring labor compliance

   • Issue contracts, maintain attendance, and follow leave and termination rules.

6. Delay in annual filings

   • Put a compliance calendar in your first board meeting minutes.

Table: Subsidiary vs Branch vs Liaison 

Note: Sector regulators may impose extra licenses regardless of form.

Numbered setup plan (your first 90 days)

1. Select vehicle (subsidiary vs branch vs liaison).

2. Validate sector (negative-list and regulator).

3. Reserve name (OCR).

4. Draft MOA/AOA and board resolutions.

5. File incorporation (OCR).

6. Apply for FDI approval (DOI/IBN).

7. Secure NRB approval and open FDI bank account.

8. Remit capital and allot shares.

9. Obtain PAN/VAT and municipality license.

10. Hire first employees; set payroll and policies.

11. Sign first client and vendor contracts.

12. Prepare for first audit and compliance calendar.

Bulleted best-practice checklist 

• Align objects across OCR, DOI/IBN, and NRB documents.

• Maintain bilingual seals and templates if you deal with local offices.

• Use purpose-built PoAs for filings and bank KYC.

• Pre-clear royalty and technical fee models to avoid withholding surprises.

• Keep scanned copies of all approvals and SWIFT receipts in a single drive.

• Book board meetings on a fixed annual calendar (AGM, audit, budgets).

FAQ 

1) What is the minimum capital to register a company in Nepal?
There’s no statutory minimum paid-up capital for a domestic private limited. For foreign investment, plan NPR 20 million per project, with certain ICT exceptions under the automatic route.

2) How long does company registration take in Nepal?
With complete papers, OCR incorporation can be done within one to two weeks. Add 2–4 weeks for FDI and 1–2 weeks for NRB. Buffer for sector approvals.

3) Can a foreigner own 100% of a Nepal company?
Yes, in most permissible sectors. Some activities are restricted or prohibited under the Negative List or sector laws.

4) Do I need a local partner or director?
Not generally. Many foreign-owned subsidiaries have only foreign shareholders and directors, subject to KYC and sector rules.

5) How do I repatriate profits from Nepal?
After paying taxes and filing returns, apply through your A-class bank with NRB permissions, dividend minutes, tax proofs, and share registers.