If you are planning to start a business in Nepal, understanding the legal, regulatory, and procedural requirements is essential. Nepal offers growing opportunities across technology, services, manufacturing, tourism, and outsourcing. However, the setup process differs for local citizens, Non-Resident Nepalis (NRNs), and foreign investors. This guide delivers a clear, authoritative breakdown of what you need to comply with Nepali law, avoid delays, and launch with confidence.
Nepal’s business environment has improved steadily due to regulatory reforms, digitisation of registrations, and foreign investment incentives.
Key advantages include
Competitive labour and operating costs
Access to South Asian markets
Growing startup and outsourcing ecosystem
Tax incentives in priority sectors
Repatriation rights for approved investments
For NRNs, Nepal also offers preferential investment recognition and simplified ownership structures.
Nepali citizens can establish all standard business structures with minimal capital thresholds.
NRNs are legally allowed to invest and operate businesses under special recognition rules. They enjoy many of the same rights as foreign investors, including profit repatriation.
Foreign companies must comply with foreign investment laws and obtain approvals through designated authorities such as Department of Industry and Nepal Rastra Bank.
The most common and scalable structure.
Best for
Startups
SMEs
NRN-owned ventures
Suitable for professional services and small businesses.
Fast to register but limited in scale and liability protection.
Used by foreign companies exploring the market before full incorporation.
Business name approval
Registered office address in Nepal
Constitutional documents
PAN or VAT registration
Local bank account
Passport and NRN card
Investment approval
Capital inward remittance
Industry-specific licences
Citizenship certificate
Proposed company name
Memorandum of Association
Articles of Association
Passport
NRN identity card
Investment commitment letter
Bank remittance proof
Parent company documents
Board resolution
Power of Attorney
FDI approval letter
Apply through the Office of Company Registrar system.
File incorporation documents with Office of Company Registrar.
Obtain PAN and VAT where applicable.
Mandatory for manufacturing, IT, outsourcing, and regulated sectors.
NRNs and foreigners must route funds via approved banking channels.
| Stage | Typical Duration |
|---|---|
| Name approval | 1–2 days |
| Company registration | 3–5 days |
| PAN/VAT registration | 1–2 days |
| FDI approval (if applicable) | 2–4 weeks |
| Item | Approximate Cost (NPR) |
|---|---|
| Company registration | 1,000 – 15,000 |
| PAN/VAT registration | Free |
| Legal drafting | Varies |
| FDI approval | Case-specific |
| Annual compliance | Ongoing |
Costs vary by sector, capital size, and compliance complexity.
Companies Act, 2006
Foreign Investment and Technology Transfer Act, 2019
Industrial Enterprises Act, 2020
Income Tax Act, 2002
Labour Act, 2017
These laws regulate ownership, taxation, employment, and repatriation.
Annual returns filing
Tax filings and audits
Labour and social security compliance
Industry licence renewals
Missing annual filings
Incorrect tax classification
Non-compliant employment contracts
NRNs benefit from:
Recognition as foreign investors
Profit repatriation rights
Ability to hold 100% ownership in approved sectors
However, documentation accuracy is critical to avoid regulatory delays.
IT and software services
Outsourcing and shared services
Tourism and hospitality
Manufacturing and agro-processing
Education and consulting
Each sector may require additional approvals.
Regulatory interpretation gaps
Delays in approvals
Banking documentation issues
Labour compliance complexity
Professional advisory support reduces risk and timelines.
To start a business in Nepal, locals and NRNs must align with legal, tax, and regulatory frameworks from day one. While the process is straightforward, errors can be costly. With proper structuring, compliant documentation, and expert guidance, Nepal offers a stable and rewarding business environment for long-term growth.
Planning to start a business in Nepal?
Book a free consultation to receive a personalised roadmap covering structure, cost, timelines, and compliance.
Yes. With proper documents and guidance, most businesses can be registered within one week, excluding sector approvals.
Yes. NRNs can hold full ownership in most sectors, subject to foreign investment regulations.
There is no fixed minimum for local companies. Foreign investment thresholds apply for NRNs and foreigners.
No. Locals and NRNs can own companies independently unless sector-specific rules apply.
Yes. Approved foreign and NRN investments can legally repatriate profits through Nepal Rastra Bank procedures.