Private Limited Company Name Registration Rules in Nepal

Starting a business in Nepal can be daunting, especially for foreign investors. Many entrepreneurs are confused about private limited company name registration rules in Nepal, such as mandatory suffixes, name restrictions, and multiple regulatory approvals. This guide addresses these pain points with a clear problem-solution approach. You will learn the legal framework (Companies Act 2063 and relevant laws), a step-by-step incorporation process (OCR, DOI, NRB, IRD), required documents, fees, timelines, and ongoing compliance (tax, VAT, labor and SSF obligations). By following this roadmap, you’ll avoid common mistakes and understand exactly what’s needed to register your company and get up and running in Nepal.

Nepal’s national flag illustrates the country’s corporate environment, emphasizing that foreign businesses must follow strict naming rules and procedures. For example, a Nepalese private limited company name must end with “Private Limited” by law. The flag symbolizes the importance of compliance with OCR guidelines and approvals (e.g. DOI, NRB) when incorporating in Nepal.

Overview of Private Limited Companies in Nepal

A private limited company is the most common form for business registration in Nepal. It’s a separate legal entity offering limited liability to shareholders. As per the Companies Act, a private company can be incorporated by one or more persons (foreigners may serve as promoters under FITTA approval). Key features include:

• Name Requirements: The company name must be unique, not misleading, and include “Private Limited” as the last words. Names implying government or offensive content are prohibited.

• Shareholders/Directors: A private company can be formed by a single person or group. (In practice, at least one director is appointed.) Foreign promoters are allowed under applicable laws.

• Foreign Investment: Foreigners can own up to 100% equity in most sectors (FITTA 2019 and DOI regulations apply). A minimum investment of NPR 20 million is required for FDIs. Some sectors have caps (e.g. 80% for airlines/telecom, 51% for consulting).

• Post-Registration Compliance: After incorporation, companies must register with tax and labor authorities. Nepal’s corporate income tax for standard companies is 25%. Value Added Tax (VAT) registration is mandatory once turnover exceeds thresholds (13% rate). Employers must also enroll in the Social Security Fund (SSF) per the Labor Act 2017.

In this guide, we detail how these rules fit together in practice to help you comply with Nepal’s company registration laws.

Legal Framework

Nepal’s incorporation and compliance rules are governed by several laws:

• Companies Act 2063 (2006) and Rules 2064: This is the primary law for company registration. It sets naming rules (e.g. end in “Private Limited”), minimum promoter/shareholder requirements, and OCR’s authority. For instance, OCR can refuse a name if it’s identical/similar to an existing or cancelled company.

• Foreign Investment and Technology Transfer Act (FITTA) 2019: This law governs foreign equity and approvals. Under FITTA, foreign investors need prior DOI approval for investments over NPR 20M. The DOI’s guidelines (Foreign Investment Regulations) list prohibited and restricted sectors.

• Nepal Rastra Bank (NRB) Directives: NRB issues regulations on foreign currency and FDI flows. Its Foreign Investment and Foreign Loan Management Bylaw, 2021 facilitates foreign capital inflow approvals and repatriation of profits. All foreign investments must be remitted via authorized banks and recorded under NRB oversight.

• Industrial Enterprises Act 2020: If your company involves manufacturing or industry, it must register the “industry” with government (Industrial Enterprises Act) to operate legally.

• Tax Laws: Income Tax Act 2002 (2058) and VAT Act 1996 set tax rates and registration rules. Nepal’s standard corporate tax rate is about 25%, and VAT is 13% on most sales.

• Labor and Social Security Laws: The Labor Act 2017 and Social Security Act 2018 impose obligations on employers. These include minimum wages, leave and termination rules, and mandatory SSF contributions. Specifically, employers and employees contribute to SSF (about 20% employer, 11% employee of payroll). Employers must register with the SSF when hiring staff.

Each of these laws (Companies Act, FITTA, NRB directives, Income Tax Act, Labor Act, etc.) should be consulted during registration and operations. Our Digital Consulting Ventures team has extensive expertise in navigating this framework for foreign businesses in Nepal, ensuring full legal compliance.

Step-by-Step Registration Process

The company formation process in Nepal follows these main steps (generally 7–15 business days if all documents are ready):

1. Reserve a Company Name (OCR): Apply online via the Office of Company Registrar (OCR) portal. The name must be unique and end with “Private Limited”. OCR checks for conflicts – it will reject names identical or confusingly similar to existing or cancelled firms. Avoid banned words (e.g. “Government,” “Royal,” etc.). Reservation is usually approved in 1–3 days if compliant.

2. Prepare Documents: Draft the Memorandum and Articles of Association (in Nepali or translated). Assemble required papers: name reservation certificate, MOA/AOA, promoters’ ID (Nepalese citizenship or foreign passport and any FDI permits), office address proof, and bank deposit slip. Foreign promoters must have prior government approval and bring funds via proper channels.

3. Apply for Incorporation (OCR): Submit the incorporation application online through OCR’s CAMIS system. Provide company details (address, capital, directors) and upload all documents. Pay registration fees based on authorized capital (small companies typically pay around NPR 10–20K). You will receive a digitized receipt of application.

4. DOI/NRB Approval (for FDI): If foreign investment is involved, simultaneously apply to the Department of Industry (DOI) for FDI approval. Projects exceeding NPR 6B require Investment Board Nepal approval. NRB’s One-Window is also notified of the foreign inflow. Ensure funds are remitted through authorized banks and documentation is sent to NRB.

5. Final Approval: OCR reviews the application and documents. If any discrepancies arise, OCR will request corrections. Upon satisfaction, OCR issues the Certificate of Incorporation (CoI). This legally confirms company formation.

6. Post-Incorporation Compliance: After CoI is granted, apply for a Permanent Account Number (PAN) with the Inland Revenue Department for tax purposes, and register for VAT if required by turnover. Open a company bank account and deposit any remaining capital. Enroll with the Social Security Fund (SSF) before hiring employees.

Following these steps carefully (with all paperwork in order) leads to a smooth registration. Below is a numbered list summarizing the process:

1. Reserve Company Name: Via OCR portal, ensure “Private Limited” suffix and uniqueness. 

2. Prepare MOA/AOA & Docs: Draft MOA/AOA; collect IDs, approved funds deposit, and address proof.

3. Submit Application to OCR: Complete online form, upload documents, and pay fees.

4. Secure FDI Approval: File with the Department of Industry for foreign investment approval and notify NRB.

5. Receive Incorporation Certificate: OCR reviews and issues CoI.

6. Post-Registration Tasks: Obtain PAN/VAT registration, SSF registration, open bank account, and fulfill any visa or industry license needs.

Documents & Requirements

When applying to OCR, you must gather several key documents:

• Company Name Reservation: The approved name certificate from OCR (with alternate names used in filing).

• Memorandum & Articles of Association: Stating company objectives and rules. These must be signed by promoters.

• Promoter/Director IDs: Copies of citizenship certificates (for Nepali promoters) or passports (for foreign promoters). Non-resident Nepali certificates are also accepted. Foreign promoters need government permission letters.

• Capital Deposit Proof: Bank statement or letter confirming deposit of minimum share capital (the promoter must deposit any declared capital in a Nepali bank and obtain a certificate).

• Business Address Proof: Lease agreement or utility bill for the registered office in Nepal.

• Other Legal Documents: Board resolution or power of attorney (if someone is signing on behalf of promoters), FDI approval letter from DOI, and any industry-specific permits (if applicable).

By law, OCR requires submission of MOA/AOA and identity proofs. Incomplete documentation is a common reason for delays. Ensure all documents are duly notarized and, if needed, translated into Nepali.

Fees, Timeline, and Authorities

• Fees: OCR charges incorporation fees based on authorized capital. For small private companies (authorized capital up to NPR 1 million), OCR fees typically range from NPR 10,000 to 20,000. Government also levies stamp duty on share capital. Additional fees apply for DOI approval of foreign investment.

• Timeline: If all paperwork is correct, incorporation can be completed in about 1–2 weeks. Name clearance is usually 1–3 days. OCR’s final review may take several days. FDI approvals may add 1–2 weeks. Total timeline can be ~2–3 weeks.

• Authorities Involved:

  • OCR (Office of Company Registrar): Handles name reservation and issues incorporation certificate under the Companies Act. All companies register here (CamIS portal).

  • DOI (Department of Industry): Approves foreign equity and industrial registration as per FITTA. Projects with investment above NPR 6B go to the Investment Board Nepal (IBN). 

  • NRB (Nepal Rastra Bank): Regulates foreign capital inflow and repatriation. NRB’s One-Window (Foreign Investment and Loan unit) facilitates FDI inflows and approvals.

  • IRD (Inland Revenue Department): Issues PAN and VAT certificates. Companies must register for tax and file returns via the IRD.

  • Social Security Fund (SSF): Overseen by the government, all employers must register with SSF once they have staff. Contributions are remitted via the SSF portal.

Here’s a comparison table of local vs foreign company registration in Nepal:

This comparison highlights the extra steps and requirements for FDIs (like DOI/NRB approvals) versus purely domestic companies.

Tax, Labor, and Compliance Obligations

Once the company is registered, it must comply with Nepal’s tax and labor laws:

• Income Tax: As mentioned, standard corporate tax is 25%. Special rates exist (e.g. 30% for banks, 20% for special industries). Foreign companies are taxed only on Nepal-sourced income at 25%.

• Value Added Tax (VAT): The VAT rate is 13% on most goods and services. Mandatory VAT registration kicks in at turnover thresholds: goods-only businesses exceeding NPR 5 million and service/mixed enterprises exceeding NPR 3 million annually. VAT returns must be filed monthly or quarterly, depending on turnover.

• Social Security Fund (SSF): Employers must register with the Social Security Fund and contribute on behalf of employees. Under the Labor and SSF Acts, employers contribute about 20% of payroll (with employees contributing ~11%) to SSF benefits. For example, for every NPR 1000 salary, the employer would allocate NPR 200 to SSF (including the employee’s share).

• Labor Compliance: Nepal’s Labor Act 2017 requires written employment contracts, observance of working hours/leaves, and provisions for severance/bonus. A notable requirement is the 13th-month (annual) bonus to eligible employees. Companies must follow minimum wage rules and allow benefits like annual leave and provident fund (if opted).

• Auditing and Reporting: Every Nepalese company must keep proper accounting books and have annual financial statements audited by a licensed Chartered Accountant. Audited financial statements and annual returns must be submitted to OCR (typically within 3 months of fiscal year-end, which is mid-July) and tax returns to IRD by mid-January. A Tax Clearance Certificate is often needed to renew business licenses and visas.

Practical Tip: Early registration of VAT, PAN, and SSF after incorporation is crucial. For instance, foreign companies often overlook VAT until turnover is high. The COVID-19 update in 2025 raised some VAT thresholds (services now NPR 3M), but foreign firms should still register early if anticipating large contracts.

Common Mistakes & Practical Tips

Foreign entrepreneurs often make these common mistakes:

• Name Errors: Forgetting the “Private Limited” suffix or choosing a name too similar to an existing firm will get you rejected. Always run alternate name options through OCR’s name-checker tool first.

• Skipping Approvals: Starting operations without DOI or NRB clearance for foreign funding is risky. Ensure DOI approval is in hand before incorporating and that foreign funds enter via authorized bank channels.

• Incomplete Documents: Missing citizenship certificates, unverified deposit slips, or untranslated documents will delay OCR processing. Double-check every requirement against the Companies Act checklist.

• Underestimating Tax Obligations: Ignoring VAT or SSF until deadlines can incur penalties. Register for VAT once turnover is near the threshold and enroll in SSF before your first payroll.

• Capital Miscalculations: Declaring too little share capital can trigger OCR queries. Make sure the bank deposit matches or exceeds the capital shown in the MOA.

Tip: Engage local experts early. Nepal’s bureaucratic processes can be smoother with assistance in Nepali-language forms and contacts (e.g. OCR’s CAMIS portal, DOI communication).

Frequently Asked Questions

Q: How do I register a private limited company in Nepal?
A: First reserve your company name with the Office of Company Registrar (OCR), ensuring it ends in “Private Limited” and is unique. Next, draft your MOA/AOA and gather documents (ID, address, capital deposit). Submit the incorporation application online at OCR, pay the required fee, and obtain DOI/NRB approval if foreign funds are involved. Upon OCR’s approval you get the company certificate, then register for PAN, VAT, and SSF.

Q: What documents are required for company registration in Nepal?
A: Key documents include the OCR-approved name reservation certificate, Memorandum & Articles of Association, and copies of promoters’ IDs (Nepalese citizenship or foreign passports with any government approval). You also need proof of capital deposit (bank slip), proof of registered office, and board resolutions or consent forms. If foreign investment is used, include DOI approval letters. All documents should be notarized and translated into Nepali if in another language.

Q: Can foreign investors fully own a company in Nepal?
A: Yes, foreign individuals or companies can incorporate and fully own a Nepalese private limited company in most sectors. The main requirement is a minimum investment (usually NPR 20 million). Some sectors have ownership limits (for example, up to 80% in airlines/telecom, 51% in consulting). Sector-specific rules are detailed in FITTA 2019 and DOI regulations. Even if 100% ownership is allowed, you still must obtain prior DOI approval and comply with NRB’s foreign exchange procedures.

Q: What taxes must a Nepalese company register for?
A: Every company needs a Permanent Account Number (PAN) for income tax, at which you pay corporate tax (standard ~25% on profits). If your annual sales exceed thresholds (NPR 5M for goods-only, NPR 3M for services) you must register for VAT (13% rate). You’ll also withhold payroll taxes (TDS) from salaries. Employers must register with the Social Security Fund (SSF) and make contributions (around 20% of payroll) for employee benefits. In summary, key registrations are PAN, VAT (if triggered), and SSF.

Q: How long does company registration take in Nepal?
A: Generally, the process takes about 1–3 weeks if all requirements are met promptly. Name approval can take 2–5 business days. After submitting documents online, OCR usually processes the application in under two weeks. Foreign investment approval may add a few days. To avoid delays, prepare your documents in advance and respond quickly to any OCR queries. Hiring a local consultant (like DCV) can streamline the timeline.

In summary, Nepal’s Private Limited Company name registration rules require careful attention to naming conventions, legal approvals, and documentation. By adhering to the Companies Act (suffix “Private Limited”), securing any needed DOI/NRB clearances for FDI, and completing OCR’s online process, you can successfully register your company. After incorporation, remember mandatory compliance steps: apply for PAN/VAT, register employees for SSF, and file annual audits. Foreign investors benefit from FITTA’s streamlined approvals, but must follow sector-specific equity limits and Nepal’s foreign exchange rules.

With the growing business opportunities in Nepal, now is the time to act. Digital Consulting Ventures (DCV) offers expert guidance at every step, from name reservation to full compliance. Our team understands Nepal’s laws and can handle OCR filings, FDI applications, and all legal requirements on your behalf. Don’t let paperwork slow you down, book a consultation today to start your Nepalese company registration with confidence.