Private Limited Company Registration Checklist for 2025

Are you looking to expand your business into Nepal but feeling overwhelmed by the registration process? You're not alone. Setting up a Private Limited Company in a new country can be confusing for foreign companies, with layers of legal requirements and approvals. This Private Limited Company registration checklist for 2025 is designed to clear up that confusion. We’ll walk you through every step, from securing a company name and OCR process (Office of the Company Registrar) to obtaining necessary approvals like FITTA 2019 permits, all in simple terms. By the end of this guide, you’ll know exactly what it takes to register a company in Nepal, how to stay compliant with local laws, and how to avoid common pitfalls. Let’s dive in and turn that daunting process into a manageable checklist!

Why Register a Private Limited Company in Nepal?

A Private Limited Company (Pvt. Ltd.) is the most popular business structure for investors entering Nepal. It provides a separate legal identity and limited liability, meaning your personal assets are protected from business debts (Companies Act, 2006). This structure is well-suited for foreign companies because it allows up to 100% foreign ownership in most sectors under Nepal’s foreign ownership rules, while offering credibility and permanence in the local market.

Under Nepal’s Companies Act 2006 (2063), a private company can be formed with a minimum of one shareholder and one director. Key characteristics include: it cannot publicly trade shares, and there are restrictions on transferring shares without consent. For foreign investors, a Private Limited Company is usually the go-to vehicle for establishing operations, as opposed to branch offices or partnerships, due to its flexibility and acceptance by authorities.

Legal benefits: Incorporating in Nepal gives your business legal recognition and the ability to enter into contracts, sue or be sued in the company’s name. Shareholders’ liability is limited to their share capital contribution. Registered companies can repatriate profits, access local finance, and enjoy protections under Nepalese law and bilateral treaties. The Industrial Enterprises Act, 2020, even offers certain incentives and defines industries eligible for benefits like tax rebates or subsidies. By registering a company, you also demonstrate compliance and transparency, which builds trust with clients and government bodies.

In summary, choosing to register as a Private Limited Company in Nepal sets a solid foundation for growth. It aligns with Nepal’s regulatory framework and provides a balance of investor control and risk mitigation,  essential for foreign companies aiming for long-term success in the Nepali market.

Legal Framework and Regulatory Authorities

Navigating Nepal’s legal framework is crucial for a smooth registration. Here are the main laws and authorities you need to know:

• Companies Act, 2006 (2063) and Companies Rules, 2006 (2064): These are the primary laws governing company incorporation, management, and compliance. They outline how to form a company, requirements for MoA and AoA (Memorandum and Articles of Association), director duties, and reporting obligations.

• Foreign Investment and Technology Transfer Act, 2019 (FITTA, 2019): This act regulates all foreign direct investment (FDI) in Nepal. Under FITTA, foreign investors must obtain approval for their investment and meet the minimum investment threshold of NPR 20 million (approximately USD 150,000). FITTA also lists the industries where FDI is restricted or requires joint ventures. For example, primary agriculture, real estate trading, and arms/ammunition businesses are prohibited sectors for foreign investment. Outside of these, foreign investors can own up to 100% equity in most industries (FITTA, 2019).

• Department of Industry (DOI) and Investment Board Nepal (IBN): These are the government bodies responsible for approving foreign investments. Smaller projects typically go through the DOI, while large-scale investments (usually above NPR 6 billion or in priority sectors) are handled by IBN. Before you can register a company with foreign ownership, you must obtain an FDI approval letter from one of these bodies as required by FITTA. This approval process involves submitting a detailed proposal of the business plan, equity structure, and obtaining a decision from the relevant authority.

• Office of the Company Registrar (OCR): The OCR, under the Ministry of Industry, Commerce, and Supplies, is the primary authority for company registration in Nepal. All companies (local or foreign) are registered through OCR’s system. OCR has an online registration portal called CAMIS, where applications are submitted electronically. The OCR ensures your chosen name is unique, verifies documents, and issues the Certificate of Incorporation once all criteria are met. Regional OCR offices exist in major cities, but the process is centralized via the online system for convenience. 

• Inland Revenue Department (IRD): After incorporation, the IRD is the authority for tax registrations. Companies must register for a Permanent Account Number (PAN) to operate legally and file taxes. If your company will engage in transactions above the VAT threshold or deal in goods/services subject to VAT, you must also register for Value Added Tax (VAT). These are requirements of the Income Tax Act 2002 and VAT Act 1996, respectively.

• Nepal Rastra Bank (NRB): NRB is Nepal’s central bank and oversees foreign currency regulations. For foreign-owned companies, NRB’s role is crucial in the FDI process after incorporation. When you bring investment funds into Nepal, NRB must be notified and will issue a Foreign Investment Approval Certificate (often via your commercial bank) to acknowledge the inward remittance as equity. This step is essential for future repatriation of profits or capital. NRB approval is also required for any foreign loans to the company or when repatriating dividends and sale proceeds to your home country. Essentially, NRB ensures that all cross-border fund flows comply with forex laws and that foreign investors can exit their investment under the rules.

• Industrial Enterprises Act, 2020: This act classifies industries and provides certain registration requirements and incentives. If your business falls under “industry” (manufacturing, energy, tourism, etc.), you might need to register as an industry at DOI in addition to registering the company at OCR. Being classified as an industry can entitle you to tax concessions and other benefits, but also comes with requirements like obtaining an Industry Registration Certificate.

• Labor Act, 2017: Once your company is set up and you begin hiring employees, this act governs employment relations in Nepal. It mandates written employment contracts, minimum wages, provident fund contributions, gratuity, working hours, leave, and employee safety standards. Every employer must comply with the Labor Act’s provisions to avoid legal issues. We’ll touch more on labor compliance in a later section, but keep in mind that incorporation is just the first step, being a compliant employer is the next.

• Social Security Act, 2018: This law established the Social Security Fund (SSF), a government-run fund to which employers and employees contribute. As of 2025, companies in Nepal are required to register with the SSF and deposit monthly contributions for each employee (this covers benefits like pension, medical insurance, maternity, and accident insurance). The employer generally contributes 20% of wages and the employee 11% to the fund, though these percentages are effectively split across various benefit schemes. Registration for the SSF is often done online via the SSF portal after obtaining a PAN and operating a payroll. Neglecting this can result in penalties, so it’s an important part of the compliance checklist.

• Income Tax Act, 2002, and Tax Administration Act: These outline the corporate tax obligations. Nepal’s standard corporate income tax rate is 25% of net profits for most companies, though banks and financial institutions pay 30%, and special rates apply to certain industries. Your company will need to file annual tax returns and pay advance taxes as required. The law also requires maintaining proper books of account and having them audited (for most companies, annually) by a certified auditor. Tax compliance is a major part of running a company, so understanding these obligations early on is key.

• Other Laws: Depending on your business activities, you may need to consider other laws like the Environmental Protection Act (if your industry impacts the environment and requires an Environmental Impact Assessment), sector-specific laws (for banking, telecommunications, education, etc.), Intellectual Property laws (to protect trademarks or patents), and immigration rules (if you plan to bring in expatriate staff or need work visas). For foreign investors, immigration is often relevant. Nepal provides non-tourist visas for investors and key personnel, usually facilitated after the company is registered and the investment is on record.

In summary, Nepal’s regulatory landscape requires juggling multiple laws and bodies. To succeed, ensure you have approvals per FITTA, register correctly under the Companies Act, and plan for tax, labor, and foreign exchange compliance from the start. It may sound like a lot, but the next section breaks it down into a step-by-step process that you can follow methodically.

Step-by-Step Process: How to Register a Company in Nepal (2025)

Registering a company in Nepal involves a series of sequential steps. Here’s a step-by-step checklist that combines the general process for local entrepreneurs with additional steps required for foreign investors:

1. Obtain FDI Approval (for Foreign Investors) – If your company will have foreign shareholders, start by getting approval under FITTA 2019. Prepare a proposal detailing your business plan, shareholder details, and intended capital investment. Submit this to the Department of Industry (DOI) or Investment Board Nepal (IBN) as applicable. You’ll receive a Foreign Investment Approval Letter, which is required before company incorporation. (Skip this step if all shareholders are Nepali citizens, as no prior investment approval is needed for local ownership.)

2. Reserve a Unique Company Name – Choose a distinctive name for your company that isn’t already in use. Names must end with “Private Limited” and should not conflict with existing company names or trademarks. Use the OCR’s online portal (CAMIS at ocr.gov.np or camis.ocr.gov.np) to search for name availability and reserve your company name. You can propose up to three names in order of preference. Once you submit the name reservation request, the OCR typically responds within 1-2 days. After approval, the name is reserved for a limited time (generally 45 days) for you to complete the registration.

3. Prepare the Required Documents – While your name reservation is in process (or after approval), start preparing all necessary documents for the incorporation application. Key documents include:

   • Memorandum of Association (MoA) – outlines the company’s objectives, share capital, and shareholder information.

   • Articles of Association (AoA) – defines the internal governance rules, roles of directors, meeting procedures, etc.

   • Application Form – the standard form from OCR (available online) that provides details of the company (registered address, directors, authorized capital, etc.).

   • Identification Documents of promoters/shareholders: For Nepali promoters, a notarized copy of the citizenship certificate; for foreign promoters, a notarized copy of the passport and any applicable visa.

   • Joint Venture Agreement or Shareholders Agreement (if any) – if you have multiple founders or a foreign-local joint venture, it’s good to prepare an agreement outlining each party’s roles and shareholding. Not mandatory to submit, but useful for clarity.

   • Approval Letter from DOI/IBN – (for foreign investment): Attach the FDI approval obtained in Step 1.

   • Address Proof for Registered Office – typically a rent agreement for the office space or proof of ownership if you own the property. Along with this, include a copy of the property owner’s citizenship certificate and a recent utility bill (electricity or water bill) for that address. These are needed to verify the company’s registered address.

   Ensure all documents for submission are prepared in Nepali or English. If any documents (like passports) are in another language, get official translations. The MoA and AoA must be signed by all shareholders (promoters) and witnessed/notarized. For 2025, digital signature/verification is also facilitated in the OCR portal for certain steps, but initially, you may still need to upload scanned signed copies. Take your time with this step, incomplete or incorrect documentation is the number one cause of delays or rejections in company registration.

4. Submit the Online Application to OCR – With documents in hand, fill out the company registration application on the OCR’s online platform. Create a user account on the CAMIS portal if you haven’t already. The system will guide you to input company details (from your prepared forms) and upload electronic copies of the documents from Step 3. Double-check that every required field is filled and all attachments are uploaded in the correct format. Once you submit, you will need to pay the registration fee. The fee depends on your company’s authorized capital. You can pay online through the system or pay at a bank and upload the voucher. (For example, the registration fee for a small company with authorized capital up to NPR 100,000 is NPR 1,000, whereas for a larger company it can be as high as NPR 30,000–50,000). After payment, your application status will show as “Under Review”. The OCR officers will now verify your submission.

5. Obtain the Certificate of Incorporation – If everything in your application is in order, the OCR will approve your company registration. You’ll be notified via the online portal (and sometimes email) that your application is approved. You can then download your Certificate of Incorporation (also known as the Company Registration Certificate. This certificate is an official document that includes your company registration number and date of incorporation. Congratulations – at this point, your company legally exists! Timeline: The online registration process typically takes around 3–7 working days after document submission for local promoters. For foreign-invested companies, expect it to take a bit longer (perhaps 1-2 weeks) because the OCR may coordinate with DOI on verifying your approval letter and any extra documentation.

6. Register for PAN and VAT – After incorporation, you must register your company with the Inland Revenue Department (IRD) to obtain a Permanent Account Number (PAN). The PAN is essentially your company’s tax ID, required for paying taxes, opening bank accounts, and conducting any financial transactions legally. To do this, visit the nearest IRD or Taxpayer Office (some offices have online registration portals). You will submit the PAN registration application along with copies of: the Certificate of Incorporation, MoA/AoA, a board resolution appointing a tax officer (usually a director or accountant who will handle tax filings), and proof of your office address. If your business will engage in taxable sales of goods/services above the threshold (currently NPR 5 million annual turnover) or if you choose to voluntarily register, also apply for VAT registration at the same time. The IRD will issue a PAN/VAT Certificate with a unique PAN number and VAT number (if applicable) for your company. This process is usually quick – you can often get the PAN within 1-2 days of application.

7. Local Ward Office Registration – In many municipalities in Nepal (especially in cities like Kathmandu), after you have your company, you are required to register your business at the local ward office (municipal ward) where your company’s office is located. This is essentially a local government record for businesses operating in that area. The ward office may ask for copies of your incorporation certificate, a request application, and a small fee. They will note your business in their register and often issue a ward registration certificate or letter. This needs to be renewed annually, typically at the start of the Nepali fiscal year (mid-July), by paying a nominal renewal fee. While this step is sometimes overlooked, it’s legally required and can be important for obtaining other local approvals or during inspections.

8. Open a Corporate Bank Account – With your company and tax registrations in hand, open a bank account in the company’s name. Choose a Nepali bank (there are many commercial banks to choose from). You’ll need the company registration certificate, PAN certificate, company stamp (seal), copies of MoA/AoA, board resolution to open the account, and identification of the account operators (directors/signatories). For foreign investment, this bank account should be in a commercial bank that can handle foreign currency. The initial foreign shareholder capital must be remitted from abroad directly into this account. The bank will coordinate with Nepal Rastra Bank to ensure the incoming foreign currency is documented as FDI. Opening a bank account is usually done in a day or two. It’s crucial for starting business operations, all payments, whether equity injection or customer payments, will flow through this account.

9. Bring in Capital and NRB Confirmation (FDI-specific) – If you are a foreign investor, after the company is registered and the bank account is open, you will transfer the investment funds (equity capital as per your approved amount) from your home country into the company’s Nepali bank account. Your bank will convert the foreign currency into Nepali Rupees and deposit it as paid-up capital. They will also issue a credit advice and work with NRB to get an NRB acknowledgment letter that states your company received X amount of foreign investment in such-and-such currency. This document is extremely important for future repatriation of profits or capital, basically it’s proof that money came in via official channels. Without it, you might face difficulties when you later try to send dividends back or when closing the company. Ensure you keep this NRB letter safely. (Note: For subsequent investments or loans, a similar process is followed each time.)

10. Obtain Any Industry-Specific Licenses – Depending on your business, there might be additional registrations or licenses required. For example, if you are opening a travel/tour agency, you need a license from the Tourism Board; if running a school, a permit from the Education Ministry; for healthcare, a license from Health authorities, etc. Similarly, if your company will engage in import/export, you may need to register with the Department of Customs for an EXIM (Export/Import) Code. Check the regulatory requirements for your industry early on. Many service businesses won’t have extra licenses beyond company and tax registration, but regulated sectors definitely do. The Department of Industry or your local consultant can advise on this.

11. Post-Incorporation Compliance Setup – After all the initial registrations, ensure you set up your accounting, compliance, and HR systems in line with Nepali requirements. This includes appointing an external auditor (a certified Chartered Accountant or registered auditor in Nepal) who will audit your company’s financial statements annually as required by law. You should also register your company and employees with the Social Security Fund (SSF) as mentioned earlier (this can be done once you have employees and a payroll running; you’ll need to upload employee details and contribute monthly). If you plan to hire expatriates, you will also initiate work permit and visa procedures at this stage (through the Department of Labour and Immigration Department, typically an initial non-tourist visa that can convert to a business visa after FDI, and work permits issued by the Labor office). Finally, familiarize yourself with reporting deadlines – for example, companies must hold an Annual General Meeting (AGM) within 6 months of fiscal year end and file annual returns with OCR; tax filings (VAT monthly/quarterly, income tax annually, etc.) have their own schedules. Setting up reminders or a compliance calendar in advance will help you stay on track.

Each of these steps is essential to properly company registration Nepal and making sure your business is legally ready to operate. Missing a step (like forgetting the ward registration or not getting FDI approval first) can cause headaches later. Now that we’ve outlined the process, let’s look at some of these steps in detail, including the documents and requirements you’ll need and how long each stage might take.

Documents and Requirements Checklist for 2025

To ensure your company registration process goes smoothly, you should prepare a checklist of all requirements and documents beforehand. Below is a comprehensive list for reference:

• Proposed Company Name – Ensure it’s unique and follows naming guidelines (no prohibited words, etc.). Have alternatives ready in case your first choice isn’t available.

• Promoters/Shareholders Information – Names, addresses, copies of citizenship (for Nepalis) or passports (for foreigners). For any corporate shareholders (if a company is investing), you’ll need that company’s registration documents and a board resolution approving the investment.

• Memorandum of Association (MoA) – Drafted as per Schedule 1 of the Companies Rules. Must include company name, registered office, objectives of the company (be specific about the scope of business to avoid needing amendments later), amount of authorized capital, number of shares, and details of promoters with their subscribed shares.

• Articles of Association (AoA) – Drafted as per Schedule 2 of the Companies Rules. Outlines the governance (e.g., how meetings are called, how directors are appointed, powers of directors, rights of shareholders, dividend process, etc.). Standard templates are available, but they should be tailored to your company’s needs if necessary.

• Application Form for Company Registration – This is the form provided by OCR (often referred to as form Shahamati or simply the Company Registration Form). In the online system, this is an e-form you fill out, but it mirrors the physical form which includes details like: company name, address, objectives, details of shareholders and their shares, details of directors, company secretary (if any), authorized and issued capital, etc.

• Consent of Director(s) – If the directors are decided among promoters, each director typically provides a signed consent that they agree to be a director of the company and are not disqualified by law (e.g., not bankrupt, not convicted of certain offenses). This might be part of the application or a separate letter as required.

• Chartered Accountant Verification (for large companies) – If the authorized capital exceeds a certain threshold (often NPR 10 million or more), OCR may require a verification/statement from a licensed Chartered Accountant about the details of promoters (this is to prevent fraudulent incorporations with high capital). This requirement can change, so check if it applies in 2025 for your capital size.

• Foreign Investment Approval Letter – For FDI companies. As obtained from DOI or IBN (Step 1 in the process above). Make sure it’s the final approval, not just an in-principle letter. Usually, it will mention the name of the proposed company, the amount of investment approved, and any conditions.

• Joint Venture Agreement – For FDI or partnerships. If you have a JV between a foreign investor and a Nepali investor, an agreement signed by both parties outlining the ownership split, roles, profit sharing, etc., is often prepared. While not mandatory to submit to OCR, it is sometimes required by DOI for the FDI approval stage, and it’s good to have legally to avoid disputes. If submitted to any authority, have it notarized.

• Registered Office Address Proof – As noted earlier: rental agreement or ownership proof, plus landlord’s ID and a utility bill. If your office is in an industrial zone or special economic zone, include the allocation letter or lease agreement for that space.

• Personal PAN of Promoters – For Nepali promoters. The OCR sometimes asks for personal PAN (tax number) of Nepali citizens who are promoters, to ensure individuals are in the tax system. If any Nepali promoter doesn’t have a PAN, it’s advisable they obtain one (it’s free and easy) prior to registration.

• Company Statutory Fees – Budget for the registration fee based on authorized capital. Also, budget for notary costs (notarizing documents might cost a few hundred rupees per document) and professional fees if you are using a lawyer or consultant.

• Power of Attorney (if applicable) – If you cannot be physically present or if you are having a consultant handle the submission, you might need to issue a power of attorney to your representative to deal with OCR on your behalf. For instance, foreign promoters often authorize a local lawyer or consultant to submit documents and even sign on their behalf where allowed. This POA should be notarized (and if made abroad, consularized by a Nepali embassy).

Checklist Tip: Maintain a folder (physical and digital) with all these documents. Create a simple checklist and tick off each item as you compile it. Having everything ready not only speeds up the process but also creates a good impression with regulators (fewer queries and resubmissions).

Finally, remember that accuracy is key. Ensure names are spelled consistently across all documents, addresses match, and information like passport numbers, dates, etc., is correct. Discrepancies can lead to the OCR rejecting the application or asking for clarification. A little extra diligence at the document preparation stage can save you days or weeks of delay.

Fees, Timeline, and Key Registration Authorities

Understanding the costs, timeframes, and authorities involved will help you plan the registration efficiently:

• Registration Fees: Nepal’s company registration fees are scaled according to the authorized capital of the company. As of 2025, for a Private Limited Company, the fees range roughly from NPR 1,000 for small companies (authorized capital up to NPR 100,000) and increase in slabs. For example, a company with Rs. 1 million capital might pay around NPR 9,500; larger companies with Rs. 10 million could pay around NPR 19,000; and the maximum fee is around NPR 30,000–40,000 for very high capital (tens of millions). These rates are set by the government and published in the Companies Rules or the Finance Acts. There’s also a nominal fee for name reservation (often around NPR 100 or NPR 200, which is usually paid via the same portal). Other potential costs include: Notary public fees (for document verification), stamp duty on the MoA/AoA (minimal), and local ward registration fees (vary by municipality, often a few hundred rupees annually). Overall, the official costs of incorporation in Nepal are relatively low, the bigger expenses tend to be the minimum capital requirement (for foreign companies) and professional services if you engage lawyers/consultants.

• Timeline: For a fully Nepali-owned company, once all documents are ready, the registration with OCR is quite fast, often completed within 3 to 7 working days. This is thanks to the online system that has streamlined many steps. Post-incorporation tasks like PAN registration can be done in 1-2 days, and ward registration another day; so a local company can be completely set up (legal and operational) within two weeks or less. For a foreign-invested company, the timeline is longer due to the extra approval and processes. Obtaining the foreign investment approval from DOI/IBN can take anywhere from 1 to 3 weeks, depending on the project complexity and completeness of your proposal. After that, OCR registration (another week), then opening a bank account and bringing in funds (coordinating with NRB can take a week or so). In practice, a foreign company might expect around 4 to 6 weeks (about 1 to 1.5 months) from start to finish to be ready to operate. If your sector requires additional licenses (like industry registration or sectoral licenses), that could add a few more weeks. It’s wise for foreign investors to anticipate about 6-8 weeks total to be safe, in case of any delays or queries in the process.

• Key Authorities Involved:

  • Office of the Company Registrar (OCR) – Handles name reservation and the actual company incorporation process. You will interact with OCR through the online portal, and possibly in person if any documents need to be delivered or issues need to be resolved.

  • Department of Industry (DOI) – If foreign investment is involved, DOI is the first stop for approval (unless your project is very large or falls under IBN). The DOI’s Foreign Investment Section will review your FDI application and issue the approval letter. They often also issue an Industry Registration Certificate simultaneously for many investments, indicating you are registered as an industry under the Industrial Enterprises Act.

  • Investment Board Nepal (IBN) – A high-level government body that handles big investments (generally above NPR 6 billion, or in priority sectors like hydropower above a certain MW, large infrastructure, etc.). If your investment qualifies, you apply here instead of DOI. IBN’s process may include more detailed project negotiations or conditions.

  • Inland Revenue Department (IRD) – Under the Ministry of Finance, through its local tax offices, IRD issues PAN and VAT and monitors tax compliance. You or your accountant will deal with IRD for registrations and ongoing tax filings.

  • Nepal Rastra Bank (NRB) – As mentioned, NRB isn’t one you “visit,” but rather you comply with its regulations via banks. NRB issues foreign exchange regulations. Ensure you (and your bank) follow NRB directives when remitting capital or loans. They have a dedicated Foreign Exchange department that ultimately gives the go-ahead for repatriations.

  • Local Government (Ward/Municipality) – The ward office or municipality office for your business location will come into play for post-registration local registration and when obtaining certain local clearances (like signage permit, if you put up a signboard, or recommendation letters you might need for other work). Building a good relationship with local officials can be helpful for smooth operations.

• Additional Agencies: Depending on your business, you might interact with others: e.g., Department of Immigration (for visas for foreign personnel), Social Security Fund Office (for enrolling in SSF), Department of Labor (for work permits or labor compliances), and any sector regulators (for example, Nepal Telecommunications Authority if IT/telecom, Nepal Rastra Bank if a financial service, Food and Drug Administration if pharmaceuticals, etc.).

To keep track of the timeline, it’s useful to maintain a Gantt chart or schedule of tasks with estimated durations. If you’re working with a firm like DCV for incorporation, they will typically project manage these timelines for you. Patience and persistence are key, sometimes a file might sit on a desk a day longer than expected, or an officer might ask for an additional document. Following up diplomatically and providing any info promptly helps keep things moving.

Below is a quick comparison of Local vs Foreign Company Registration in Nepal, summarizing key differences:

Table: Comparison of key factors between a locally-owned company and a foreign-owned company in Nepal.

As shown above, the main differences come down to the initial approval and minimum capital for foreign investors, along with some sector limitations. Once established, both local and foreign companies operate under the same company law and tax law, though foreign companies will engage more with NRB for currency-related matters.

Tax, Labor, and Ongoing Compliance Obligations

Registering the company is just the beginning. To keep your company in good standing, you must adhere to Nepal’s ongoing compliance requirements in taxation, labor law, accounting, and general administration. Here’s what you need to know:

Tax Registration and Filing: After obtaining your PAN, your company is legally obligated to maintain accounting records and file tax returns. Nepal’s fiscal year runs from July 16 to July 15 (approximately). Key tax compliance includes:

• Corporate Income Tax: The standard corporate tax rate is 25% of net profit (Income Tax Act, 2002). Certain industries have different rates (for example, telecom, insurance, and financial institutions are taxed at 30%). Tax returns must be filed annually, typically by the end of Poush (mid-January) for the prior fiscal year if no extensions. You’ll need to pay advance taxes in installments during the year (often referred to as estimated tax payments), usually in three tranches of 40%, 30%, and 30% of the estimated liability, as per the Tax Administration Act schedules.

• Withholding Taxes (TDS): Your company must withhold taxes on certain payments – e.g., salaries, rent, service fees, interest, dividends to individual shareholders, etc., at prescribed rates, and deposit them monthly to the government. For example, salary TDS as per the individual tax slabs, 15% on certain service payments, 5% on dividends (which is final tax on dividends to residents, and for foreign investors, dividend tax is also 5% in Nepal, often eligible for relief under DTA treaties).

• VAT (Value Added Tax): If registered for VAT, you must charge 13% VAT on your sales (if applicable) and file VAT returns monthly or quarterly based on your transaction volume. VAT returns are due by the 25th of the following month. You can claim input VAT credits for business purchases. Ensure proper VAT invoices are issued and maintain purchase/sales records as the law requires.

• Tax Audits and Assessments: The IRD may audit company tax returns. Always keep documentation of expenses, revenues, and maintain accounting and audit compliance according to Nepali Accounting Standards. Hiring a qualified accountant or accounting service is recommended. Also note, the Income Tax Act requires an audit report from a certified auditor to be submitted along with the annual tax return for companies, so an external audit is not just a Companies Act requirement, but tied to tax filing too.

Accounting and Audit Compliance in Nepal: Every company must maintain accurate books of account from day one of operations. Nepali law (Companies Act and Auditors’ Act) requires that companies appoint a qualified auditor and have an annual audit of financial statements. For private companies, an audit is mandatory regardless of size (unless you meet criteria for a very small company exemption, but generally in practice, even small companies do it. The audited financial statements (Balance Sheet, Profit/Loss, Cash Flow, Notes) need to be approved by the shareholders in the Annual General Meeting (AGM). You must also submit an annual return to the OCR each year, which includes basic details of the company, any changes in directors, shareholders, etc., along with the audited financial statements. Failure to submit annual returns on time can lead to fines (OCR can impose late fees for each year of delay). It’s wise to engage an accounting firm or keep a dedicated accountant on staff to ensure all transactions are recorded and compliance deadlines are met.

Labor Law Compliance: If you have employees, Nepal’s Labor Act, 2017, and related regulations become very important. Key points to comply with:

• Employment Contracts: Every employee should be given a written contract (appointment letter) stating the role, salary, working hours, and other terms. The Labor Act mandates certain contents for contracts and also mandates a probation period (up to 6 months allowed) for new employees.

• Working Hours and Leave: Standard working hours are 8 hours a day, 6 days a week (48 hours/week) unless you choose a 5-day week, in which case adjust daily hours accordingly. Overtime above that must be paid at 1.5 times the normal rate. Employees are entitled to leave benefits: e.g., 1 day off per week, public holidays (13+ days annually), annual paid leave (18 days a year accrued), sick leave (12 days a year), maternity leave (98 days, per the 2017 Act, with at least 60 days paid), paternity leave (15 days). Ensure these are honored and documented.

• Salary and Benefits: Adhere to minimum wage laws (the government periodically updates the minimum monthly wage; as of recent years, it’s been around NPR 15,000 per month, but check the latest). Provide pay slips and maintain payroll records. The Bonus Act, 1974 requires that companies distribute 10% of their net profits as a bonus to employees each year (subject to certain limits and eligibility; excess profit after distributing the bonus goes to a national welfare fund). This is applicable if your company has more than 50 employees, or if mandated by industry, it’s something to keep in mind as you grow.

• Social Security Fund (SSF): As noted, the Social Security Act, 2018, now requires companies to enroll themselves and their employees in the SSF program. Practically, this means: register on the SSF online portal as an employer, then register each employee (who will each get an SSF number), and contribute the combined 31% (employer 20%, employee 11% which you deduct from salary) of basic salary every month to the fund. The contributions cover provident fund, medical, accident, maternity, and pension schemes managed by the government. If your company already has existing Provident Fund or CIT (Citizen Investment Trust) schemes, there are rules to transition into SSF. Non-compliance can lead to fines and also disqualify the company from certain government tenders or approvals. So, make sure to budget for these contributions in your payroll. Positive side – these contributions are considered tax-deductible expenses for the company, and they provide social security to your staff.

• Workplace Policies: Labor law also touches on having proper workplace policies in place (anti-harassment, health and safety, etc.). For instance, if you have 10 or more employees, you should have an Employment Rules/Employee Handbook registered with the Labor Department, outlining company-specific policies in line with national law. Additionally, ensure a healthy and safe working environment for employees as per the Labor Act and the Occupational Safety and Health guidelines.

• Labor Registrations: Some local governments ask businesses to register employees at the local ward or maintain a list. Also, the Labor Office (a regional office under the Labor Ministry) often wants companies to report the staff details. Keep an eye out for any notices from the Labor Office and comply accordingly.

Annual General Meetings (AGM) and Corporate Governance: Nepal’s company law requires that a private company hold an AGM within 6 months of the end of its fiscal year. During the AGM, the shareholders approve the audited accounts, appoint/reappoint the auditor for next year, and make any decisions on dividends or other major issues. Even if you have a single shareholder (or just a couple), you should document that these decisions were made (minutes of AGM). For foreign investors who might be the only shareholders, you’ll need to plan to either be present in Nepal for an AGM or provide proxies/remote participation. The minutes of AGM and the signed audited financials are filed with OCR as part of the annual return. If there are changes in directors or capital, or articles, those have separate filing requirements (and sometimes fees) with OCR. Staying on top of these filings keeps your company in good standing and avoids penalties or legal troubles.

Renewals and Licenses: As part of compliance, remember to renew any licenses (industry registration, municipality renewals, sector-specific permits) annually or as required. For example, an industry registration certificate from the DOI often needs a renewal stamp each year by submitting a progress report and a minimal fee. Failing to renew can cause issues when you need no objection letters or any services from those departments.

In summary, running a company in Nepal means ongoing responsibility: paying taxes, treating employees as per law, contributing to social funds, maintaining proper accounts, and respecting regulatory filings. The government has been increasing enforcement in recent years, and the concept of “tax clearance certificate” and “labor clearance” is often required when repatriating money or closing a company, which means you must show all obligations are cleared. So it’s best to embed compliance into your operations from day one. Many foreign businesses choose to outsource accounting and compliance to local firms (like DCV’s compliance team or other auditors) for peace of mind. It’s a worthwhile investment to avoid legal complications and focus on your core business.

Common Mistakes and Practical Tips for Success

Even with a roadmap, mistakes can happen. Here are some common pitfalls foreign investors and new entrepreneurs should avoid, along with practical tips to ensure a smooth registration and operation:

• Skipping the FDI Approval Stage: A critical mistake foreign investors make is trying to register a company directly at OCR without realizing they first need DOI/IBN approval under FITTA. OCR will reject any application with foreign shareholders if it doesn’t see the DOI approval letter attached. Tip: Always start with the foreign investment approval if any shareholder is not Nepali. Engage with the DOI early, and consider consulting a local expert to prepare your proposal. This will save you from restarting the process.

• Inadequate or Mismatched Documents: Small inconsistencies like a name mismatch (e.g., John Doe in one document vs J. Doe in another) or missing pages in a scanned document can lead to rejection. Tip: Double-check all documents. Use a standardized naming (First Middle Last) everywhere. Ensure passports are valid (not expiring soon) during the process. If a document is notarized, ensure the notary seal is clear on the scan. It helps to have a checklist (like the one above) and get someone else to review your application package before submission.

• Choosing a Confusing Company Name: If your proposed name is too similar to an existing company or violates naming rules (like using “Nepal” at the end, which might imply governmental connection, or using words like “bank”, “insurance” without approval), OCR will reject it. Tip: Check the OCR online database for existing names. Avoid restricted words or get necessary permissions if you must use them. It’s often better to pick a simple, unique name and then, if needed, use a brand/trade name separately for marketing.

• Underestimating Capital Requirements: While Nepali-owned companies can register with very low capital, foreign investors sometimes think they can do the same and later invest as needed. But with the NPR 20 million minimum for FDI, if you show a lower capital in the documents, the DOI will not approve it. Also, having too low a capital can be a hindrance for business (e.g., you might need a certain equity for work visas or contracts). Tip: Plan your capitalization properly. If NPR 20 million is required, decide whether you’ll bring it all upfront or in tranches (the approval might specify this). Also, consider your funding needs, having a realistic capital reflecting your business plan makes it easier to finance initial operations.

• Ignoring Sector-specific Laws: Some businesses need extra permits – e.g., a fintech service might need Nepal Rastra Bank’s nod, an NGO-style activity would need Social Welfare Council, a manufacturing unit might require environmental clearances. Tip: Research your industry or consult with local professionals about any additional licenses. Initiate those license applications in parallel with company registration if possible, to save time.

• Delays in Post-Registration Tasks: Getting the company certificate feels like the finish line, but don’t celebrate too long, delaying PAN registration or bank account opening can stall your operations. For instance, you legally shouldn’t issue invoices or conduct business without a PAN. Tip: Right after you get the incorporation certificate, move on to tax registration and bank formalities within days. This ensures you can start signing contracts and invoicing clients promptly.

• Not Setting Up Governance: In closely held companies (especially one-person companies or small partnerships), people often neglect formalities like board meetings, resolutions, or even separating personal and company finances. This can cause issues later in audits or disputes. Tip: Treat the company seriously as a separate entity. Document key decisions with board resolutions, even if you are the sole director (you’ll just sign the resolution yourself). Keep company funds in the company bank account, avoid using it for personal expenses. Good corporate governance habits not only keep you compliant but also build a trustworthy record if you ever seek investors or partnerships.

• Overlooking Local Partnerships for Restricted Activities: Foreign investors sometimes hit a wall when they realize a certain small business activity (like retail trade or real estate brokerage) isn’t open to 100% foreign ownership. In frustration, some try to circumvent by using a local “proxy” shareholder without a clear legal arrangement, which can be very risky. Tip: If your desired business is in a restricted category, consider alternatives: perhaps partner genuinely with a Nepali citizen (and reflect that in shareholding from the start) or explore if there’s a way to slightly pivot the business model to fit within allowed areas. Always follow the spirit of the law; having hidden arrangements can backfire legally and financially.

• Underestimating the Importance of Compliance: Many think once the company is registered, they’re done with bureaucracy. Nepal’s system does require ongoing compliance, and the government is enforcing more each year. For example, failure to file annual returns to OCR for 3+ years could lead to your company being listed for dissolution. Tip: Mark all compliance dates on a calendar. Use professional services for tax filing and legal compliance if you’re not able to handle it. The cost of compliance is much lower than the cost of penalties or legal issues.

• Communication Gaps: If you’re a foreign investor not based in Nepal, not staying in touch with local directors or consultants can mean missing notices or correspondence from government offices. Tip: Ensure the registered email and phone number given to OCR and IRD are actively monitored. Many communications (like tax notices or OCR notices) may come via email or online portals. Also, consider giving someone power of attorney or at least authority to act on urgent matters if you’re frequently away.

Practical Tips: Always keep a set of physical copies of important documents in a secure place, and digital backups as well. When dealing with Nepali bureaucracy, patience and politeness go a long way, build good relationships with officials, and they will be helpful when you need guidance. Networking with other businesses or joining chambers of commerce (like FNCCI or industry associations) can provide informal support and updates on regulatory changes. And remember, if something seems too confusing, don’t hesitate to seek professional help. It’s better to ask and do it right than to guess and redo it.

Frequently Asked Questions (FAQ)

1. Can a foreigner own 100% of a private limited company in Nepal?
Yes, a foreigner (or foreign company) can own up to 100% equity in a Nepali private limited company in most sectors. Nepal’s foreign ownership rules allow full foreign investment except in certain restricted industries (like defense, small retail, farming, etc.). You must still get prior approval under FITTA 2019 for any foreign investment, and invest at least NPR 20 million. Once approved, the company can be fully foreign-owned, and you’ll enjoy the same legal status as local companies.

2. What is the minimum capital required to register a company in Nepal?
For purely Nepali-owned companies, there is no statutory minimum capital – you could register with very low capital (even NPR 1000 or less) as long as it’s practical for your business. However, for foreign-invested companies, the minimum foreign investment is NPR 20 million (approximately USD 150,000) as per government regulation under FITTA. This means if any shareholder is foreign, your authorized and paid-up capital should typically meet that threshold. Certain industries or visa processes may effectively impose higher capital needs, so plan accordingly.

3. How long does it take to register a private limited company in Nepal?
The timeline can vary. For a local company (Nepali shareholders only) using the OCR’s online system, it usually takes about 3–7 working days to get the company incorporation certificate once you submit all documents correctly. Adding the time to prepare documents and do post-registration tasks (PAN, etc.), it might be 1-2 weeks total. For a company with foreign investors, it takes longer because you first need FDI approval. Obtaining the approval can take a few weeks, and the overall process (approval + company registration + bringing in capital) often ranges from 4 to 6 weeks in total. Starting early and ensuring all paperwork is complete will help avoid delays in the OCR process and other steps.

4. What taxes will my company have to pay in Nepal?
A Nepali company is subject to corporate income tax on its profits at the standard rate of 25% (with higher rates of 30% for certain regulated industries). If your company distributes dividends, a 5% dividend tax is levied at source. Companies also collect and pay VAT (13%) on sales of goods and services if registered under the VAT Act. Additionally, you’ll encounter withholding taxes on various payments (for example, TDS on salaries, rent, and contractor payments), which the company must deduct and remit to the tax office. Other potential taxes/fees include excise duties (for certain products), customs duties on imports, and local taxes, if any (some municipalities levy an annual business tax or signboard tax). Overall, Nepal’s tax regime requires periodic filings: VAT returns (monthly/quarterly), TDS filings (monthly), and income tax returns (yearly). Staying compliant with these is important to avoid fines and to obtain a tax clearance certificate each year.

5. What are the ongoing compliance requirements after company registration in Nepal?
After incorporation, a company must adhere to several compliance obligations: It needs to maintain proper accounting records and undergo an annual audit by a certified auditor. The audited financial statements and an annual return must be filed with the Company Registrar each year. The company also has to file annual tax returns and pay taxes as due, as well as monthly/quarterly VAT and withholding tax filings. If you have employees, compliance with the Labor Act 2017 is necessary, providing appointment letters, respecting working hours and leave, contributing to the provident fund or Social Security Fund (SSF) as required, and remitting employee taxes. The company should hold an Annual General Meeting of shareholders within six months of the fiscal year-end to approve accounts and discuss any major decisions. Additionally, any changes, like a new director, a change in office address, or share transfers, must be reported to OCR through formal filings. In summary, regular compliance with accounting, audit, tax, and labor laws is essential to keep your company in good standing in Nepal.

Entering the Nepal market by registering a Private Limited Company is a strategic move that can unlock tremendous opportunities, but success lies in the details. In this guide, we provided a comprehensive 2025 checklist to help you navigate every stage of the company registration journey. Let’s recap the key takeaways:

• Preparation and Compliance: From the get-go, ensure you have all required approvals (like DOI approval under FITTA 2019 for foreign investors) and documents in place. Familiarize yourself with Nepal’s legal landscape, the Companies Act 2006, foreign investment rules, and sector-specific regulations. This upfront homework will save you time and prevent costly mistakes.

• Step-by-Step Process: Follow a structured approach – reserve your company name, prepare a robust MoA/AoA, register with the OCR, and then swiftly handle post-incorporation tasks like tax registration and bank account setup. Use our step-by-step list as a roadmap, and you’ll find the process is quite manageable.

• Mind the Details: Pay attention to seemingly small requirements like local ward registration, annual renewals, and proper record-keeping. They can have big implications down the line for legal compliance. Similarly, invest in good accounting and legal advice for peace of mind – especially regarding Nepal tax rates, labor obligations, and foreign currency rules.

• Foreign Investors: Nepal is increasingly welcoming to FDI, with 100% ownership allowed in most areas and clear provisions for profit repatriation. Just remember that the FDI process entails some extra steps and a minimum capital – plan accordingly. Also, engage with local partners or consultants to navigate cultural and bureaucratic nuances effectively.

• Why DCV – Your Trusted Partner in Nepal: Registering a company is one thing; building a thriving, compliant business is another. This is where expert guidance can make all the difference. Digital Consulting Ventures (DCV) is here to support you at every step. With a team of seasoned corporate lawyers, accountants, and industry experts, we ensure your incorporation is not only fast and hassle-free but also sets you up for long-term success. From crafting tailored MoA/AoA, obtaining all the right approvals, to setting up accounting systems and HR policies, we’ve got you covered. We pride ourselves on our in-depth knowledge of Nepalese business law, taxation, and compliance, and we stay updated on every legal change so you don’t have to.

Ready to turn plans into reality? Don’t let bureaucracy hold back your Nepal business expansion. Book a consultation with Digital Consulting Ventures and let our experts walk you through a smooth company registration and beyond. We’ll handle the heavy lifting – approvals, paperwork, and compliance – while you focus on strategizing your growth in Nepal. Contact us today to start your Private Limited Company registration in Nepal, and take the first step towards tapping into Nepal’s vibrant market.