Company incorporation in Nepal has become increasingly attractive for foreign companies seeking South Asian market access, cost-efficient talent, and long-term growth. Nepal offers a young workforce, competitive operating costs, and clear legal pathways for foreign direct investment (FDI).
Yet, the incorporation process can feel complex. Multiple regulators. Specific laws. Local compliance requirements.
This guide simplifies everything. It walks you through the step-by-step process for company incorporation in Nepal, explains legal obligations, highlights common mistakes, and shows how foreign investors can enter Nepal confidently and compliantly.
Company incorporation in Nepal is governed by a structured legal framework designed to regulate ownership, investment protection, and compliance.
Key authorities involved include:
Office of the Company Registrar (OCR)
Department of Industry (DOI)
Nepal Rastra Bank (NRB)
Inland Revenue Department (IRD)
Foreign investors usually incorporate under the Foreign Investment and Technology Transfer Act (FITTA) 2019, supported by the Companies Act 2006.
Private Limited Company (FDI subsidiary)
Branch Office
Liaison Office
Employer of Record (pre-FDI entry)
Understanding the laws builds trust and reduces risk.
Companies Act, 2006 – governs incorporation, shareholding, and governance
FITTA, 2019 – regulates foreign investment approval and protection
Industrial Enterprises Act, 2020 – sector classification and thresholds
Income Tax Act, 2002 – corporate tax and withholding rules
Labor Act, 2017 & Social Security Act, 2018 – employment compliance
These laws collectively define how foreign companies register, operate, and repatriate profits.
This is the exact process most foreign investors follow.
Foreign companies must first decide how they want to operate.
Most popular option:
FDI-backed Private Limited Company due to:
Limited liability
Full operational control
Profit repatriation rights
Other structures are suitable for non-revenue or temporary presence.
Name reservation is done online with the Office of the Company Registrar.
Key rules:
Must be unique
Cannot conflict with existing trademarks
Must reflect the business activity
Approval usually takes 1–3 working days.
Foreign investors must seek FDI approval before incorporation.
Required submissions include:
Project proposal
Shareholding structure
Source of funds declaration
Passport and company documents of investors
Approval authority depends on investment size:
DOI for standard projects
Investment Board Nepal (IBN) for large investments
After FDI approval, investors must bring capital into Nepal.
Process:
Open a local bank account
Remit approved capital amount
Obtain NRB inward remittance confirmation
This step is critical for legal validity.
Once capital is verified, incorporation proceeds.
Documents filed include:
Memorandum of Association (MOA)
Articles of Association (AOA)
FDI approval letter
Bank capital confirmation
Director details
The OCR issues the Certificate of Incorporation.
After incorporation:
Register for Permanent Account Number (PAN)
Register for VAT if applicable
This enables invoicing, payroll, and compliance.
This includes:
Statutory books
Accounting systems
Payroll and Social Security Fund (SSF)
Local employment contracts
Foreign companies often underestimate this stage.
| Stage | Estimated Time |
|---|---|
| Name reservation | 1–3 days |
| FDI approval | 7–21 days |
| Capital remittance | 3–7 days |
| Company registration | 2–5 days |
| Tax & local setup | 5–10 days |
Total estimated time: 4–6 weeks
As per FITTA 2019:
Minimum FDI threshold: NPR 20 million
(subject to sector-specific exemptions)
This capital must be fully remitted through formal banking channels.
Foreign investors should budget for:
Government registration fees
Legal drafting and advisory
Banking and compliance setup
Ongoing accounting and tax filings
Costs vary by sector and structure but remain competitive compared to regional alternatives.
Avoid these frequent pitfalls:
Choosing the wrong entry structure
Delaying capital remittance
Non-compliant employment contracts
Ignoring monthly tax filings
Poor documentation at FDI stage
Professional guidance reduces delays and rejections.
| Structure | Can Earn Revenue | FDI Approval | Ideal For |
|---|---|---|---|
| Liaison Office | No | Yes | Market research |
| Branch Office | Limited | Yes | Short-term projects |
| Private Limited (FDI) | Yes | Yes | Long-term operations |
| Employer of Record | Yes (indirect) | No | Fast market entry |
Once incorporated, companies must:
File annual returns at OCR
Submit monthly and annual tax filings
Maintain SSF contributions
Renew registrations annually
Non-compliance can trigger fines and restrictions on repatriation.
Key advantages include:
Competitive labor costs
English-speaking professionals
Strategic access to India and China
Improving regulatory transparency
Strong investor protection under FITTA
Experienced advisors help with:
Structuring FDI optimally
Managing regulator communication
Ensuring labor and tax compliance
Supporting profit repatriation
Scaling operations smoothly
This significantly reduces execution risk.
Company incorporation in Nepal offers foreign companies a strategic, cost-efficient gateway to South Asia. With the right structure, compliant execution, and local expertise, Nepal can support long-term growth and regional expansion.
The key is doing it right the first time.
Planning to incorporate a company in Nepal?
Speak with our FDI and incorporation specialists for a free feasibility and compliance consultation. We handle approvals, registration, payroll, and ongoing compliance end-to-end.
Yes. FITTA 2019 allows 100% foreign ownership in most permitted sectors.
Typically 4–6 weeks, depending on FDI approval timelines and documentation readiness.
No. The entire process can be completed remotely via a local representative.
Yes. Nepal law allows repatriation of profits, dividends, and capital after tax clearance.
Generally NPR 20 million, subject to sector-specific rules.