The Essential Guide to Company Registration in Nepal: What You Need to Know in 2023

Navigating the complexities of company registration in Nepal can be a daunting task for both local and foreign entrepreneurs. This guide aims to demystify the process, providing a clear roadmap for establishing a legal business entity in Nepal.

Types of Companies in Nepal

Nepal's business landscape accommodates various company structures, tailored to meet different business needs:

1. Limited Liability Company (LLC): Popular among medium to large-scale businesses, an LLC offers limited liability protection to its shareholders. There are two types of LLCs: single ownership and multiple ownerships, with a minimum capital requirement of one lakh.

2. Public Limited Company (PLC): Suitable for businesses intending to trade shares publicly. PLCs require a minimum capital of one crore and can have an unlimited number of shareholders.

3. Non-Governmental Organisations (NGOs): Registered under Nepalese law, NGOs aim to increase social activities and minimise illegal operations. They must have at least five shareholders, including one female, and do not require capital.

4. Sole Proprietorship: This type involves single ownership and is suitable for individuals managing their own business​.

Pre-Registration Process

Selecting a unique name for your company is the first step. The name should not resemble any existing registered company in Nepal to avoid legal issues​.

Registration Process

The registration process involves several steps:

1. Document Submission: After name approval, submit the Memorandum of Association (MOA), Articles of Association (AOA), application, and the owner's citizenship details to the Company Registrar's Office. These documents outline the company's objectives, rules, and operations.

2. Document Examination: The Office of Company Registrar (OCR) reviews all submitted documents.

3. Payment of Fees: Fee payment varies based on the type and capital of the company.

4. Certificate of Incorporation (COI): Upon approval, the COI is issued, marking the official registration of your company​.

Documentation Required

Key documents required include:

• National identity card or passport of the owner(s).
• Citizenship certificate of the owner(s).
• Passport-sized photos.
• Proof of address of the company's office.
• The company's objective.
• Capital details (authorised, issued & paid-up)​.

Post-Registration Process

After obtaining the COI, additional steps include:

• Acquiring a Permanent Account Number (PAN) Card.
• Registering for VAT and PAN, necessary for tax compliance​.

Benefits of Company Registration

Registered companies in Nepal enjoy several benefits:

• Legal protection and limited liability for shareholders and directors.
• Access to government contracts, tenders, grants, and subsidies.
• Easier bank account opening and loan acquisition from financial institutions​.

Common Challenges

Companies may face hurdles like:

• Difficulty in acquiring necessary documents.
• Lengthy registration processes due to bureaucratic inefficiencies.
• Navigating through bureaucratic hurdles which can cause delays​.

Conclusion

Company registration in Nepal, while intricate, is a crucial step for any aspiring business. Understanding the types of companies, complying with legal requirements, and preparing for potential challenges will streamline the process, paving the way for a successful business venture.

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.