Private Limited Company Registration in Nepal: Complete Guide (2025)

For global businesses seeking a cost-efficient and compliant entry into South Asia, private limited company registration in Nepal has become an attractive option. Nepal’s legal and investment landscape has evolved dramatically, streamlining approvals, digitalizing processes, and offering competitive advantages for companies in IT, outsourcing, manufacturing, and consulting.

As of FY 2024–25, foreign direct investment in Nepal increased by 36% year-on-year, signaling growing investor confidence. Backed by reforms under the Companies Act 2006, FITTA 2019, and Industrial Enterprise Act 2020, registering a company in Nepal is now simpler, faster, and more transparent than ever.

Why Choose Nepal for Business in 2025

Strategic Market Access

Nepal’s location between India and China positions it as a strategic business hub for regional operations. It offers cost advantages and strong connectivity to two of the world’s largest markets.

Stable and Skilled Workforce

Nepal’s workforce is young, educated, and globally oriented. By 2030, over 22 million Nepalis will be of working age, many with skills in finance, IT, and customer operations.

Simplified Regulatory System

Digital transformation at the Office of the Company Registrar (OCR) and the Department of Industry (DOI) allows full registration and approvals in weeks, not months.

Attractive Investment Climate

Tax holidays, repatriation rights, and liberal ownership laws create an investor-friendly environment for foreign entrepreneurs.

Understanding Private Limited Companies in Nepal

A Private Limited Company (Pvt. Ltd.) is the most common and flexible form of business entity in Nepal. It is governed by the Companies Act 2006 and offers:

• Limited liability for shareholders.

• A distinct legal identity separate from the owners.

• Flexibility in management and shareholding.

• Ability to operate across multiple sectors.

It can be formed by one to 101 shareholders, and its shares cannot be publicly traded. For foreign companies, this model ensures control, compliance, and protection of intellectual and financial assets.

Legal Framework and Key Authorities

Foreign Investment Approval under FITTA 2019

Foreign investors must obtain approval before registration. The Foreign Investment and Technology Transfer Act (FITTA) 2019 allows investment through:

• Equity participation in a Nepalese company.

• Technology transfer agreements.

• Reinvestment of retained profits.

Minimum Foreign Investment Threshold: NPR 20 million (approx. USD 150,000) per investor.

Approval Route:

• Department of Industry (DOI): For projects below NPR 6 billion.

• Investment Board Nepal (IBN): For projects exceeding NPR 6 billion.

Once approval is granted, the investor must remit funds via a commercial bank approved by the Nepal Rastra Bank (NRB) for verification.

Step-by-Step Process for Private Limited Company Registration

Name Reservation at OCR

Reserve your company name online through the OCR portal. The name must be unique and end with “Pvt. Ltd.”. Approval typically takes 1–2 working days.

Preparation of Incorporation Documents

Draft the Memorandum of Association (MOA) and Articles of Association (AOA) specifying company's objectives, shareholding, capital, and director details.

Foreign Investment Approval (if applicable)

Submit the investment proposal to DOI or IBN with supporting documents such as a project report, board resolution, and company profile.

Open a Foreign Investment Account

Once approval is granted, open a foreign currency account at an NRB-approved bank and remit the investment amount.

Company Registration at OCR

Submit all notarized documents, MOA, AOA, passport copies, and FDI approval letters to OCR. Upon approval, you’ll receive the Certificate of Incorporation and company number.

PAN and VAT Registration

Register the company with the Inland Revenue Department (IRD) to obtain a Permanent Account Number (PAN) and, if applicable, Value Added Tax (VAT) number.

Social Security Fund (SSF) and Labor Compliance

Enroll employees in the Social Security Fund, maintain employment contracts, and comply with the Labor Act 2017 and Bonus Act 1974.

Documents Required for Registration

For Local Shareholders:

• Citizenship certificate copies.

• Signed MOA and AOA.

• Recent passport-size photographs.

• Office lease agreement.

• Contact details of directors.

For Foreign Shareholders:

• Parent company incorporation certificate.

• Board resolution authorizing investment.

• Passport copies of directors/shareholders.

• Power of attorney to the local representative.

• Proof of investment transfer (SWIFT copy).

All foreign documents must be notarized and authenticated by the Nepali embassy or the Ministry of Foreign Affairs.

Capital Requirements

💡 Pro Tip: Set authorized capital higher than initial paid-up capital for flexibility during expansion.

Post-Registration Compliance Obligations

Corporate Compliance

• Conduct board meetings and annual general meetings (AGM).

• Maintain a share register and minute book.

• File annual financial statements and audits to the OCR within six months of the fiscal year-end.

Tax Compliance

• File monthly VAT returns (if applicable).

• Deduct TDS from employee and contractor payments.

• File annual income tax returns.

• Renew the tax clearance certificate annually.

HR and Payroll Compliance

• Contribute to Social Security Fund (SSF) (31% combined).

• Maintain attendance, leave, and bonus records.

• Ensure compliance with Labour Act and Bonus Act provisions.

Cost and Timeline Overview

Common Mistakes to Avoid

• Submitting MOA/AOA without notarization.

• Inconsistent information between documents.

• Forgetting NRB inward remittance documentation.

• Delayed tax registration or filings.

• Using temporary office addresses.

✅ Always appoint a local compliance consultant to manage filings across OCR, DOI, IRD, and NRB.

Taxation Framework in Nepal

• Corporate Tax Rate: 25% (standard).

• VAT: 13%.

• Withholding Tax: 5–15%, depending on service type.

• Dividend Repatriation Tax: 5%.

Tax Incentives:

• IT and export-oriented companies qualify for tax holidays under the Industrial Enterprise Act.

• Hydropower and infrastructure sectors receive multi-year exemptions and reduced rates.

Frequently Asked Questions

Can foreigners fully own a private limited company in Nepal?
Yes, 100% ownership is allowed in most sectors except a few restricted industries like retail trading and beauty services.

How long does registration take?
For local investors, about 7–10 days; for foreign investors, 15–25 working days after FDI approval.

What is the minimum investment amount?
NPR 20 million per foreign investor as per NRB and FITTA 2019.

Can profits be repatriated abroad?
Yes, after obtaining tax clearance and NRB approval.

Is an annual audit mandatory?
Yes, every company must submit audited accounts to the OCR each fiscal year.

Digital Consulting Ventures (DCV) helps global businesses establish and manage FDI-compliant private limited companies in Nepal. We provide one-window services that simplify your setup and ensure full regulatory compliance.

Our services include:

• FDI approval and documentation.

• OCR, DOI, and NRB coordination.

• PAN/VAT and SSF registration.

• Accounting, tax, and audit support.

• Payroll and HR compliance setup.

📞 Ready to establish your company in Nepal?
Connect with our compliance specialists today to start your registration process with confidence.