Registering a Startup as a Private Limited Company in Nepal

Starting a business in Nepal sounds exciting until you actually try to register one.

Maybe you’ve spent nights sketching wireframes, pitching your co-founder over late-night coffee, or convincing your parents that “this startup thing” is actually serious. Then reality hits, someone says, “You’ll need to register your company.”

You open the Office of the Company Registrar’s website, and suddenly you’re drowning in forms that look like they belong in another century. You see terms like Memorandum of Association and FDI approval, and start wondering if you accidentally applied to law school instead of starting a business.

Every founder hits this point, the moment where your idea meets bureaucracy. But here’s the thing: registering your startup as a Private Limited Company in Nepal doesn’t have to be scary. It’s actually the smartest move you’ll make if you want real growth, funding, and credibility, both locally and globally.

In this guide, we’ll skip the legal mumbo-jumbo and walk you through everything you need to know about registering your startup the right way, what it means, how it helps, and how to do it without losing your sanity (or your weekends). 

Why Most Startups in Nepal Choose a Private Limited Company

In Nepal, the Companies Act 2063 (2006) defines several types of companies, but for startups, a Private Limited Company offers the best balance between flexibility and legal protection.

A Private Limited Company is a separate legal entity. It limits your personal liability, allows multiple shareholders, and can easily raise capital or issue shares to investors.

It’s also the only structure recognized by most venture capital (VC) funds, angel investors, and accelerators, locally and globally.

Key Features

• Ownership is divided into shares (up to 101 shareholders).

• Limited liability for founders and investors.

• Separate legal identity from the owners.

• Eligible for foreign investment under FITTA 2019.

• Ideal for tech, IT, and innovation-driven startups.

If you plan to raise funding, hire employees, or scale internationally, registering as a Private Limited Company is not just beneficial, it’s essential.

Nepal’s Startup Landscape: A Growing Ecosystem

The last five years have seen Nepal’s startup ecosystem grow significantly. Tech entrepreneurs, fintech innovators, and digital service providers are reshaping industries once dominated by traditional players.

According to the Ministry of Industry, Commerce, and Supplies, more than 6,500 new ICT-related firms have registered since 2018. The Digital Nepal Framework 2030 further encourages innovation, FDI in IT, and cross-border e-commerce.

Government-backed initiatives like Startup and Innovation Policy Draft 2023 are also being finalized to provide grants, tax exemptions, and incubation support.

For foreign founders, this timing couldn’t be better, Nepal is transitioning from a traditional to a digital economy.

Legal Framework for Startup Registration in Nepal

Startups in Nepal are governed by several core laws:

• Companies Act 2063 (2006) — regulates company registration and operations.

• Foreign Investment and Technology Transfer Act (FITTA) 2019 — governs FDI approvals and capital inflows.

• Industrial Enterprise Act 2020 — defines startup industries and incentives.

• Income Tax Act 2002 — outlines taxation and reporting obligations.

• Social Security Act 2018 — covers employee benefits.

Foreign startups must obtain approval from the Department of Industry (DOI) or the Investment Board of Nepal (IBN) before incorporation, while local founders register directly through the OCR online portal.

Step-by-Step Process to Register a Startup as a Private Limited Company in Nepal

Step 1: Name Reservation through the OCR Portal

Every startup begins by reserving its name on the Office of the Company Registrar website.
Your name must be unique and end with “Private Limited.”
Once approved, the name is reserved for 35 days.

Step 2: Draft and Prepare Founding Documents

You’ll need to prepare and notarize:

• Memorandum of Association (MoA): Describes your company’s objectives and shareholding.

• Articles of Association (AoA): Defines management rules and decision-making procedures.

• Board Resolution: Authorizing company formation.

• Identification Documents: Passport or citizenship of shareholders.

• Office Lease Agreement: Proof of your business address.

For foreign startups, add:

• Certificate of incorporation of the parent entity.

• Power of Attorney appointing a local representative.

• Investment approval letter from DOI or IBN.

Step 3: Submit Application via OCR Portal

Upload all documents online, verify details, and submit for review.
Once verified, the OCR issues a Certificate of Incorporation, which legally establishes your company.

Step 4: Obtain PAN and VAT Registration

After incorporation, register with the Inland Revenue Department (IRD) to get:

• PAN (Permanent Account Number) for tax identification.

• VAT registration (if turnover exceeds NPR 2 million annually).

Step 5: Open Corporate Bank Accounts

Open both NPR and foreign currency accounts for business transactions and FDI recording.

Step 6: Record Investment with Nepal Rastra Bank (NRB)

For foreign investors, record capital inflows at NRB to ensure repatriation rights for profits and dividends.

Step 7: Register with Social Security Fund (SSF)

If hiring employees, register your company and workers under SSF for mandatory contributions.

Startup-Specific Considerations in Nepal

Equity and ESOP (Employee Stock Ownership Plans)

Private Limited Companies can issue shares to employees as part of retention plans. This flexibility allows startups to reward talent without immediate salary burdens, a major attraction for tech companies.

Foreign Founder Requirements

If you are a foreigner, your company must invest a minimum of NPR 20 million (approximately USD 150,000). This can include cash, technology, or intellectual property valuation.

Tech-Based Licensing

Startups operating in data processing, fintech, or e-commerce may require additional approvals from:

• Department of IT (for cloud or data services).

• Nepal Rastra Bank (for fintech).

• Nepal Telecommunications Authority (for communication platforms).

Intellectual Property Protection

After registration, startups should register trademarks and copyrights under their company’s name to protect ownership rights.

Advantages of Registering a Startup as a Private Limited Company

1. Legal Protection and Investor Confidence

A registered Private Limited Company separates founders’ personal assets from business liabilities. It also establishes trust with investors who prefer dealing with incorporated entities.

2. Full Ownership and Control

Startups can maintain 100 percent ownership while accessing Nepal’s growing market and talent base.

3. Easier Fundraising

Private Limited Companies can issue new shares to angel investors or venture capital firms. They can also onboard foreign shareholders through FDI compliance.

4. Brand Credibility

Banks, vendors, and global partners take registered entities seriously. It signals professionalism and legal reliability.

5. Tax Benefits and Incentives

Startup Funding and Compliance: What Founders Should Know

Foreign and local startups can raise funding under the following frameworks:

• Seed or Angel Round: Investment through share subscription.

• Venture Capital or Private Equity: Must be recorded under NRB.

• Convertible Notes or SAFE Agreements: Not yet fully codified but accepted under FITTA guidance.

To attract funding, maintain:

• Clear shareholding records.

• Annual audit and financial statements.

• Proper NRB reporting for any foreign investment.

Comparison: Private Limited vs Partnership for Startups

A Private Limited structure provides scalability, while partnerships often limit growth opportunities.

Common Challenges and Solutions for Startup Registration

Challenge 1: Complex paperwork for first-time founders
Solution: Hire a professional service provider to handle documentation and translations.

Challenge 2: Confusion over FDI approval and minimum capital
Solution: Consult early with DOI or IBN to align your investment proposal.

Challenge 3: Unclear tax and compliance obligations
Solution: Register for PAN/VAT early and file annual returns on time.

Challenge 4: IP and shareholding disputes among founders
Solution: Draft a strong Founders’ Agreement before registration.

Challenge 5: Delayed digital verification
Solution: Keep both English and Nepali versions of all documents ready for OCR review.

10-Step Summary Checklist for Startup Registration in Nepal

1. Finalize your startup name and reserve it on the OCR portal.

2. Draft Memorandum and Articles of Association.

3. Prepare the founder identification and office lease proof.

4. Submit FDI proposal if applicable.

5. File incorporation application at OCR.

6. Obtain PAN and VAT registration.

7. Open a bank account and record foreign capital inflow.

8. Register with SSF if hiring staff.

9. Register IP and trademarks.

10. File annual return and maintain audit compliance.

FAQ — People Also Ask

1. Can I start a tech startup as a foreigner in Nepal?
Yes. Foreigners can register 100 percent-owned IT or service companies by obtaining FDI approval and meeting the minimum investment threshold.

2. What is the minimum capital to register a startup?
There is no fixed minimum for local founders, but foreign-owned startups must invest at least NPR 20 million.

3. How long does it take to register a Private Limited Company?
It usually takes 3 to 4 weeks, depending on document accuracy and government processing time.

4. Can startups raise funding from abroad?
Yes, but all foreign investments must be approved and recorded by the Department of Industry and Nepal Rastra Bank.

5. Do startups get tax benefits in Nepal?
Yes. Registered startups in priority sectors like IT and exports can access tax rebates and special incentives.

Starting a business is never just about paperwork. It’s about building something that lasts, a company that attracts investors, protects your vision, and grows sustainably.

At Digital Consulting Ventures (DCV), we understand the challenges founders face, from FDI approvals to documentation, taxation, and compliance with Nepal’s startup laws. We simplify the entire process so you can focus on what matters: innovation and growth.

Our team has helped global entrepreneurs register and scale startups across IT, consulting, e-commerce, and outsourcing sectors in Nepal. Whether you’re setting up your first entity or expanding internationally, we make the process transparent, compliant, and future-ready.

Ready to turn your startup dream into a registered reality?
Book a free consultation with DCV today and let our legal and corporate experts handle every step of your incorporation journey.