For foreign companies looking to enter Nepal, understanding the online company registration vs. the traditional process in Nepal is critical. Your choice impacts timelines, approvals, capital remittance, and long-term compliance. Online registration promises speed, automation, and convenience. Traditional registration offers hands-on oversight and is sometimes necessary for complex approvals.
In this guide, we cover both processes end-to-end: FDI approvals, director duties, share capital requirements, banking, tax, labor, and governance. By the end, you’ll know which method fits your business strategy, avoid common pitfalls, and plan a seamless market entry.
Foreign investors often face the dilemma: speed versus control.
Online registration offers digitized submission and tracking.
Traditional registration is manual, slower, but allows personal interaction with authorities.
Your choice affects:
FDI approval timelines
NRB capital recording
Banking and account opening
Compliance with tax and labor laws
Ease of operations after incorporation
Both registration methods fall under these laws and regulations:
Companies Act, 2063 (2006): Defines company structures, directors, shareholder rights, and filing obligations.
Foreign Investment and Technology Transfer Act (FITTA), 2019: Governs FDI approvals, sectoral limits, and repatriation.
Nepal Rastra Bank (NRB) Regulations: Controls foreign capital remittance, inflows, and repatriation.
Income Tax Act, 2058 and VAT Act, 2052: Covers taxation for incorporated entities.
Labor Act, 2017 and Social Security Fund Act, 2017: Governs employment compliance.
Understanding these frameworks ensures that your registration, whether online or traditional, is legally sound.
Online Company Registration is a digital solution offered by the Office of the Company Registrar (OCR).
Digital submission: Upload all forms and documents through the OCR portal.
Automated verification: Checks documents against NRB and FDI records.
Director KYC: Passport, photo, and consent are uploaded online.
Capital tracking: Paid-in capital monitored digitally with banks.
Integrated tax application: PAN and VAT registration are linked.
Faster approvals (typically 2–3 weeks).
Reduced physical visits and courier costs.
Real-time tracking of application status.
Lower human error in forms and calculations.
Requires reliable internet and familiarity with online procedures.
Some regulated sectors still require manual approvals.
Bank account opening may require physical signatures.
Project scoping: Define business model, capital, and legal structure.
Name reservation: Submit proposed names online; usually instant verification.
FDI application: Upload the foreign investment proposal, parent company KYC, and sector details.
MoA/AoA filing: Draft digital Memorandum and Articles of Association.
Director consent and KYC: Upload scanned passport, photo, and signed consent.
Bank account coordination: Open corporate account using OCR digital certificate.
Capital remittance: Transfer funds as per NRB FDI guidelines.
PAN and VAT registration: Apply online through integrated IRD modules.
Post-registration compliance: Maintain statutory registers and board minutes digitally.
The traditional process involves manual submissions at various offices.
Name reservation at OCR office: Submit printed forms with multiple name options.
FDI approval: Submit hard copies to Department of Industry (DOI) or Investment Board Nepal (IBN).
Director KYC: Provide notarized passports, photos, and consent letters.
MoA/AoA submission: Signed documents filed physically.
Bank account opening: Provide all physical documents, including NRB approval.
Capital remittance: Bank processes foreign investment; NRB documents filed manually.
PAN and VAT application: Submit forms to the Inland Revenue Department.
Post-incorporation compliance: Update statutory registers, board minutes, and employee records manually.
Direct interaction with authorities; faster clarification for non-standard cases.
Better for complex projects requiring special approvals.
Longer timelines (6–10 weeks).
More paperwork and potential for manual errors.
Higher cost due to travel, courier, and legal support.
| Step | Online Registration | Traditional Process |
|---|---|---|
| Name reservation | Online portal submission; instant check | OCR office visit; manual check |
| FDI approval | Scan and upload proposal | Physical submission to DOI/IBN |
| Director KYC | Digital upload | Notarized hard copy submission |
| MoA/AoA filing | Digital forms | Printed forms with signatures |
| Bank account | Coordinate via bank using digital certificates | Physical submission to bank |
| Capital remittance | Digital tracking with NRB | Manual NRB filing and bank verification |
| PAN/VAT | Online integrated | Manual filing at IRD office |
| Timeline | 2–3 weeks | 6–10 weeks |
| Cost | Lower; mainly service charges | Higher; travel, courier, legal fees |
| Errors | Reduced due to automation | Higher risk of human error |
| Follow-up | Portal notifications & emails | Multiple office visits and calls |
Insight: Online registration suits standard foreign investment. Traditional may be necessary for complex or highly regulated sectors.
Directors: At least one; resident directors recommended for smoother banking.
Company Secretary: Optional but recommended for compliance.
Shareholders: Parent company can own 100%, unless restricted by sector rules.
Authorized vs Issued capital: Must align with FDI approval and bank requirements.
Maintain statutory registers and minutes.
Approve filings promptly.
Ensure compliance with NRB, IRD, and labor authorities.
Oversee intercompany transactions and transfer pricing documentation.
Week 1–2: Name reservation, document upload
Week 3: FDI approval
Week 4: Incorporation certificate issued
Week 5: Bank account opened, capital remitted
Week 6: PAN/VAT registration complete
Week 1–3: Name reservation, FDI application preparation
Week 4–6: Physical filings at OCR and NRB
Week 7–8: Bank account opened, capital remitted
Week 9–10: PAN/VAT registration
Tip: Add 1–2 weeks buffer for holidays or sector-specific approvals.
Use a single authorized remitter with correct purpose codes.
Keep FDI approval, incorporation certificate, and bank remittance forms ready.
Maintain a copy of SWIFT advice and NRB confirmation.
Any future repatriation of capital or profits requires clean NRB records.
Corporate tax: Standard 25%; may vary by sector.
VAT: 13% on taxable supplies.
TDS: Withholding on salaries, services, and rent.
Payroll: Comply with Labor Act and Social Security Fund contributions.
Audit: Annual statutory audit required.
Draft employment contracts aligned with Nepal labor laws.
Register all employees under SSF.
Senior expatriates require business or work visas.
Resident director helps streamline banking, compliance, and visa requirements.
Draft agreements for services, royalties, or management fees.
Maintain transfer pricing files to avoid disputes.
Align invoicing with actual work performed.
Monitor forex exposure and settlement timing.
Incorrect sequence of approvals
Under-capitalization
Incomplete NRB documentation
Late VAT/TDS filings
Non-resident director complications
Missing board minutes
Ignoring sector-specific permits
Incorrect MoA/AoA templates
Outdated KYC or notarizations
Over-promising timelines
Online registration: ~1,000–5,000 NPR service fees; minimal travel
Traditional process: 10,000–20,000 NPR or higher, including courier, travel, and legal fees
Banking: Charges similar for both
Legal & advisory: Recommended for FDI compliance
Payroll & HR setup: Monthly operational budget
Audit fees: Annual, based on turnover and complexity
Certain sectors like finance, telecom, energy, and media may have foreign ownership caps.
Manufacturing may require environmental clearance or SEZ registration.
Always check FITTA schedules and sector-specific guidelines before filing.
Speed: OCR wins
Cost: OCR is cheaper
Complexity: Traditional better for specialized projects
Compliance: OCR reduces errors and allows automated tracking
Human interaction: Traditional gives direct access to officials
Many investors combine OCR for speed and manual submissions for sector-specific approvals.
1) Which method is faster for foreign investors?
Online registration is faster, typically 2–3 weeks versus 6–10 weeks for traditional filings.
2) Can I do everything online for all sectors?
Not always. Some regulated sectors require in-person verification or special permits.
3) Is OCR cheaper than traditional?
Yes, online reduces travel, courier, and manual processing fees.
4) Do both methods require a resident director?
Resident directors are recommended to ease banking and compliance.
5) Can I switch from traditional to OCR midway?
Partial switching is possible but requires verification of documents and approvals.
Choosing between online company registration vs. traditional process in Nepal is a critical decision for foreign investors. Online registration offers speed, convenience, and reduced errors, making it ideal for standard FDI cases. The traditional process, while slower and more paperwork-intensive, provides direct engagement with authorities and is better suited for complex or highly regulated sectors. Understanding director responsibilities, share capital requirements, NRB compliance, and taxation is essential for smooth incorporation.
By carefully planning your approach, following legal frameworks, and leveraging expert guidance, foreign companies can efficiently establish a subsidiary in Nepal. Start your incorporation journey today with DCV’s expert support to ensure compliance, save time, and minimize risks.