Starting a business in Nepal is not only a contribution to the country's economy but also a rewarding venture. The first step in this journey is registering your company, a process governed by the Companies Act 2006 (2063). This comprehensive guide aims to navigate you through the nuances of company registration in Nepal, ensuring a smooth and efficient experience.
In Nepal, you can register a private company, public company, or a non-profit organisation/NGO. Private companies can have 1 to 50 shareholders and are restricted from collecting funds through public share offerings. In contrast, public companies require a minimum of 7 shareholders and a minimum paid-up capital of NPR 10 million, with the ability to offer shares publicly. Non-profit organisations are geared towards societal benefits and public welfare, with restrictions on profit distribution.
The first step in registering your company is to reserve a unique name through the Office of Company Registrar’s (OCR) website. This involves creating an account and submitting a name reservation request.
Once the name is approved, the following documents need to be submitted to the OCR:
If your company has foreign investors, you’ll need approval from the relevant authority and additional documentation, like the investor’s passport or company-related documents for foreign corporate investors.
The registration fees are contingent on the size of your capital investment. For private limited companies, fees range from NPR 1,000 for capital investments up to NPR 100,000 to NPR 43,000 plus NPR 30 for each additional NPR 100,000 for investments over NPR 100,000,000. Public limited companies have a different fee structure, starting from NPR 15,000 for capital investments up to NPR 10,000,000.
Besides registering with the OCR, businesses also need to register as an enterprise at the provincial level, and in some cases, obtain specific approvals or licenses from various departments such as the Department of Industry, Department of Electricity Development, and Nepal Rastra Bank, especially for regulated businesses like banking, hydropower, travel, and hospitals.
For these types of businesses, specific procedures apply, such as submitting an application form with details like the firm's name, address, objectives, identity proof of the proprietors or partners, and partnership details.
The step-wise process includes:
The process typically takes 7 to 15 days. Required documents include the application for registration, Memorandum of Association, Articles of Association, citizenship certificates or passports of promoters, and shareholder’s agreement, among others.
Public companies require a minimum investment of over NPR 1 Crore, whereas private companies need NPR 1 Lakh. Every company must obtain a PAN or VAT Registration certificate from the Inland Revenue Department prior to commencing business activities.
For foreign investors, opening a foreign currency account at Nepal Rastra Bank is necessary.
Registering a company in Nepal is a structured process that requires careful planning and understanding of the legal requirements. This guide provides the essential steps and considerations to help you navigate the process efficiently. Whether you are starting a private, public, or non-profit organization, following these guidelines will ensure a smooth registration process and set the foundation for a successful business venture in Nepal.
Disclaimer: This article is for informational purposes only and shall not be construed as legal advice, advertisement, personal communication, solicitation or inducement of any sort from the firm or any of its members. The firm shall not be liable for consequences arising out of any action undertaken by any person relying on the information provided herein.