Registering a Company in Nepal: Everything You Need to Know

How to register a company in Nepal is one of the most common questions foreign investors ask when exploring South Asia. Nepal offers competitive labor costs, English-speaking professionals, and growing access to India and China. But company registration follows a specific legal path that foreign businesses must understand clearly.

This guide gives you a complete, practical, and legally accurate explanation of registering a company in Nepal as a foreign entity. It reflects current laws, regulatory practice, and real-world execution. It is written for decision-makers, founders, and compliance teams who want certainty, not theory.

Why Foreign Companies Are Registering in Nepal

Nepal is no longer just a tourism-driven economy. It is becoming a serious destination for global operations.

Foreign companies choose Nepal for several reasons:

• Competitive operating and salary costs

• Young, educated, English-speaking workforce

• Favorable foreign investment laws

• Strategic access to India and China

• Growing IT, outsourcing, and services ecosystem

Industries seeing strong foreign participation include IT services, outsourcing, engineering, renewable energy, education, and consulting.

Legal Framework Governing Company Registration in Nepal

Understanding the legal foundation is essential before you register.

Company registration and foreign investment are governed primarily by:

• Office of the Company Registrar

• Companies Act 2006

• Foreign Investment and Technology Transfer Act 2019

• Nepal Rastra Bank

• Industrial Enterprises Act 2020

• Income Tax Act 2002

These laws define ownership rules, capital requirements, approval processes, and ongoing compliance.

Types of Business Entities Available in Nepal

Foreign companies can register several entity types. The correct choice depends on control, risk, and long-term plans.

1. Private Limited Company (Most Common)

This is the preferred structure for foreign investors.

Key features:

• Separate legal entity

• Limited liability

• Can be 100 percent foreign-owned (sector permitting)

• Suitable for commercial operations

2. Branch Office

A branch is an extension of a foreign parent company.

Key features:

• No separate legal personality

• Limited to approved activities

• Profits can be repatriated with approvals

3. Liaison Office

This structure is used only for non-commercial activities.

Key features:

• No revenue generation allowed

• Used for market research or coordination

• Strict regulatory oversight

4. Public Limited Company

Rare for foreign entrants. Mostly used for large capital-raising ventures.

Eligibility Rules for Foreign Companies

Before learning how to register a company in Nepal, you must confirm eligibility.

Foreign investment is allowed in most sectors. However:

• Some sectors are restricted or capped

• Minimum investment thresholds apply

• Activities must align with approved industry classifications

As of current regulations, the minimum foreign investment is NPR 20 million for most sectors, unless exempted.

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

This section explains the full process in logical order.

Step 1: Name Reservation

You begin by reserving a company name with the Office of the Company Registrar.

Rules to follow:

• Name must be unique

• No prohibited or misleading words

• Alignment with proposed business activities

Name approval usually takes one to three working days.

Step 2: Prepare Incorporation Documents

You will need to draft and finalize:

• Memorandum of Association

• Articles of Association

• Shareholder and director details

• Passport and address documents

• Board resolutions from parent company

Accuracy here avoids future rejection.

Step 3: Company Registration with OCR

Once documents are ready, the application is submitted to the OCR portal.

Upon approval, you receive:

• Certificate of Incorporation

• Company registration number

At this stage, the company exists legally, but cannot operate yet.

Step 4: Foreign Investment Approval

Foreign-owned companies must obtain foreign investment approval.

This is done through:

• Department of Industry (for most sectors)

• Investment Board Nepal (for large investments)

Approval confirms the legitimacy of capital inflow and ownership.

Step 5: Capital Inflow and Bank Account

After approval:

• Open a foreign currency account in Nepal

• Remit approved capital through banking channels

• Obtain capital confirmation letter

This step is closely monitored by Nepal Rastra Bank.

Step 6: Tax Registration and Local Compliance

Final operational steps include:

• Permanent Account Number registration

• VAT registration if applicable

• Local ward office registration

• Social Security Fund registration

Only after this can the company legally operate.

Timeline for Company Registration in Nepal

A realistic timeline helps planning.

Delays usually occur due to document inconsistencies or sector-specific approvals.

Cost Breakdown: What Foreign Companies Should Budget

Costs vary by structure and advisory support.

Typical expenses include:

• Government registration fees

• Foreign investment approval fees

• Legal and professional fees

• Banking and compliance setup costs

While government fees are modest, professional support significantly reduces risk and delays.

Key Compliance Obligations After Registration

Registering the company is only the beginning.

Foreign companies must comply with:

• Annual filings with OCR

• Tax filings and audits

• Social Security Fund contributions

• Employment law compliance

• Foreign exchange reporting

Non-compliance can lead to penalties, fines, or operational suspension.

Common Mistakes Foreign Companies Make

Avoid these frequent errors:

• Choosing the wrong entity structure

• Underestimating approval timelines

• Improper capital remittance

• Ignoring post-registration compliance

• Relying on unqualified intermediaries

Nepal’s system is rule-based. Errors are rarely forgiven retroactively.

Comparison: Entity Options for Foreign Companies

Strategic Tip for Foreign Investors

Many foreign companies use a phased approach:

• Start with a liaison or branch office

• Validate the market

• Transition to a private limited company

This reduces risk while maintaining regulatory compliance.

Why Professional Support Matters

While it is legally possible to register independently, foreign companies face:

• Regulatory interpretation challenges

• Banking and capital hurdles

• Language and procedural barriers

Professional advisors streamline the process and prevent costly errors.

Conclusion

Understanding how to register a company in Nepal is critical for foreign businesses seeking long-term success. The process is structured, transparent, and investor-friendly when done correctly.

With the right entity choice, proper approvals, and ongoing compliance, Nepal can become a stable and profitable base for regional operations.

Call to Action

If you are planning to register a company in Nepal, speak with specialists who manage the process end to end.
Book a consultation to assess eligibility, timelines, and costs before you commit.

Frequently Asked Questions

1. Can a foreigner own 100 percent of a company in Nepal?

Yes. Foreigners can own 100 percent of a private limited company in most permitted sectors, subject to foreign investment approval.

2. What is the minimum investment to register a company in Nepal?

The standard minimum foreign investment is NPR 20 million, though some sectors have exemptions or different thresholds.

3. How long does company registration in Nepal take?

Most foreign-owned companies are fully operational within four to six weeks if documents are complete.

4. Is a local director required in Nepal?

No. Nepal does not mandate a local director, but a local representative is often required for compliance.

5. Can profits be repatriated outside Nepal?

Yes. Profits, dividends, and capital can be repatriated after tax clearance and regulatory approvals.