Company incorporation Nepal is becoming a strategic move for foreign companies looking to access South Asia’s emerging markets, skilled workforce, and cost-efficient operations. Nepal offers a clear legal framework, investment protection laws, and full foreign ownership in many sectors.
This guide explains private limited company incorporation in Nepal in a clear, practical way. It is written specifically for foreign companies and investors. You will learn the process, documents, timelines, costs, and compliance requirements. You will also understand when incorporation makes sense versus other entry models like liaison offices or EOR.
Nepal is no longer just a low-cost destination. It is a structured investment jurisdiction backed by law.
Key drivers include:
Strategic location between India and China
Competitive labour and operating costs
English-speaking professional workforce
Liberal FDI policies under FITTA 2019
Guaranteed profit and capital repatriation
Foreign investors can incorporate a private limited company in Nepal with up to 100% foreign ownership, subject to sector approval.
A private limited company is the most common vehicle for foreign direct investment.
Separate legal entity
Limited liability of shareholders
Minimum 1 shareholder, maximum 101
Minimum 1 director
Shares are not publicly traded
Under the Companies Act 2006, a private limited company can conduct full commercial operations in Nepal.
Foreign company incorporation in Nepal is governed by several key laws.
Companies Act 2006
Foreign Investment and Technology Transfer Act (FITTA) 2019
Industrial Enterprises Act 2020
Income Tax Act 2002
Labour Act 2017
Social Security Act 2018
These laws collectively define investor rights, approval procedures, tax obligations, and employment compliance.
Foreign investors can be:
Foreign individuals
Foreign companies
Joint ventures with Nepali partners
Most service sectors allow 100% foreign ownership. Restricted sectors include defence, real estate trading, and small retail businesses.
Apply to the Office of the Company Registrar (OCR) to reserve your company name.
Key documents include:
Memorandum of Association (MOA)
Articles of Association (AOA)
Shareholder and director details
Passport and corporate documents
Once approved, the OCR issues the Certificate of Incorporation.
Apply to:
Department of Industry (DOI) or
Investment Board Nepal (IBN)
Approval depends on project size and sector.
Foreign capital must be remitted through an approved banking channel.
Register for:
Permanent Account Number (PAN)
VAT (if applicable)
Local ward office registration
Mandatory for hiring employees in Nepal.
Foreign investors should prepare the following:
Passport copies of shareholders and directors
Parent company registration certificate
Board resolution approving Nepal investment
MOA and AOA
Power of Attorney
Bank reference letter
All foreign documents must be notarised and apostilled.
Most foreign investors complete incorporation within 4–6 weeks.
Approximate timeline:
Name approval: 1–2 days
OCR registration: 3–5 days
FDI approval: 2–4 weeks
Tax and labour setup: 5–7 days
Delays usually arise from incomplete documents or sector-specific approvals.
Costs vary based on capital size and sector.
Government registration fees
FDI approval fees
Legal and consulting fees
Notarisation and translation costs
For most foreign companies, company incorporation Nepal costs range from USD 2,000 to USD 5,000, excluding capital investment.
| Entry Model | Suitable For | Key Limitation |
|---|---|---|
| Private Limited Company | Long-term operations | Higher compliance |
| Branch Office | Contract execution | Limited activities |
| Liaison Office | Market research | No revenue allowed |
| Employer of Record (EOR) | Quick hiring | No legal entity |
This comparison helps investors choose the right structure before committing capital.
Standard corporate tax: 25%
Special industries may receive incentives
Dividends: 5%
Service fees: varies by nature
Standard VAT rate: 13%
Nepal has double taxation avoidance agreements (DTAAs) with several countries.
Foreign-owned companies must comply with Nepali labour laws.
Key obligations:
Written employment contracts
Minimum wages and leave entitlements
Social Security Fund contributions
Payroll tax deductions
Non-compliance can lead to fines and operational restrictions.
Nepal guarantees:
Repatriation of profits
Repatriation of dividends
Repatriation of invested capital
These rights are protected under FITTA 2019 and regulated by Nepal Rastra Bank.
Avoid these errors:
Choosing the wrong entry structure
Underestimating compliance requirements
Delaying SSF and labour registration
Using informal nominee arrangements
Professional guidance reduces regulatory risk significantly.
Incorporation makes sense if you:
Plan long-term operations
Need local contracts and invoicing
Want to hire employees directly
Require full operational control
For short-term testing, EOR or liaison offices may be better.
Yes. Most sectors allow full foreign ownership under FITTA 2019, subject to approval.
There is no fixed minimum. Capital depends on sector and project scope.
Typically 4–6 weeks, including FDI approval and tax registration.
Yes. Profits, dividends, and capital can be repatriated under NRB rules.
No. Foreign nationals can act as directors without local shareholding.
Company incorporation Nepal offers foreign companies legal certainty, ownership control, and long-term growth potential. A private limited company is the most robust structure for serious investors.
With the right legal, tax, and compliance support, Nepal can be a highly efficient base for regional operations.
Planning company incorporation in Nepal?
Speak with our FDI and corporate structuring experts for a free feasibility and compliance consultation. We handle the process end-to-end, from approval to operations.