Top 10 FAQs on Company Incorporation in Nepal for International Businesses (2025 Edition)

Nepal has become an increasingly attractive destination for international companies looking to expand into South Asia. With full foreign ownership allowed in most sectors, low startup costs, and a growing tech-enabled infrastructure, it’s no surprise that many overseas entrepreneurs are exploring company incorporation in Nepal.

In this 2025 edition, we answer the top 10 frequently asked questions foreign businesses have when it comes to incorporating a company in Nepal. Whether you're planning to open a tech firm, export business, or service company, this guide covers everything you need to know — from FDI rules to timelines, documents, and post-registration compliance.

1. Can foreign nationals fully own a company in Nepal?

Yes. Foreign nationals and international companies can own 100% equity in most permitted sectors in Nepal. Common industries open to full foreign ownership include:

• Information technology and software development

• Manufacturing and export-based industries

• Hydropower and renewable energy

• Consultancy services (with restrictions on ownership percentages in some cases)

However, certain sectors are restricted or prohibited for foreign ownership (e.g., retail trading, personal services, and small-scale agriculture). Always review the Negative List under Nepal’s Foreign Investment and Technology Transfer Act (FITTA) before proceeding.

2. What are the legal steps for company incorporation in Nepal as a foreigner?

The process for company incorporation in Nepal as a foreign national typically involves:

1. FDI approval from the Department of Industry (DoI) or Investment Board Nepal (IBN)

2. Name reservation with the Office of the Company Registrar (OCR)

3. Company registration at OCR

4. PAN registration with the Inland Revenue Department (IRD)

5. NRB registration with Nepal Rastra Bank to bring in capital

6. Industry registration (if required, especially for manufacturing)

Post-incorporation, you’ll also need to comply with tax filings, audits, and labor laws.

3. Is there a minimum capital requirement for foreign investors?

Yes. As of 2025, Nepal mandates a minimum foreign direct investment (FDI) of NPR 20 million (approx. USD 150,000) per foreign investor for most sectors.

Exceptions apply:

• IT-based companies using the automatic FDI approval route are exempt from the minimum capital threshold.

• Investment amounts may be higher for regulated or large-scale industries.

This rule ensures only serious investors enter the market while promoting startup growth in tech-friendly sectors.

4. How long does the company registration process take?

For a foreign investor, the total process typically takes 4 to 8 weeks, depending on the route taken:

Using the automatic route for FDI up to NPR 500 million can significantly reduce timelines.

5. Which type of business structure should I choose?

The most common business structures in Nepal for foreign investors are:

• Private Limited Company (Pvt. Ltd.):
  Best for startups, SMEs, and tech ventures. Requires at least one shareholder and allows up to 100% foreign ownership.

• Public Limited Company:
  Suitable for large enterprises planning to raise capital publicly. Requires at least 7 shareholders and higher compliance obligations.

• Branch Office / Liaison Office:
  Allows a foreign parent company to operate in Nepal. Branches can generate income; liaison offices cannot.

For most foreign-owned startups and SMEs, a Private Limited Company is the most practical and cost-efficient option.

6. What documents are required for foreign company registration in Nepal?

Here’s a checklist of standard documents needed for company incorporation in Nepal by foreign nationals or entities:

• FDI approval letter from DoI or IBN

• Memorandum and Articles of Association

• Company name reservation certificate

• Copy of investor's passport (individual) or registration certificate (company)

• Power of Attorney for local representative

• Financial credibility certificate from a foreign bank

• Notarized and translated documents (as applicable)

• Board resolution authorizing investment (for corporate investors)

• Lease agreement for the registered office (if applicable)

Ensure documents are notarized and, where necessary, translated into English or Nepali.

7. How do I bring capital into Nepal legally?

To legally bring investment capital into Nepal, you must:

1. Register the investment with NRB (Nepal Rastra Bank)

2. Open a foreign currency account under the company’s name

3. Transfer capital via banking channels with clear investment purpose

4. Receive a remittance certificate from the bank

5. Update DoI and NRB with the amount and share allotment

Proper registration ensures you can legally repatriate profits and dividends later under Nepalese law.

8. Are there tax incentives for foreign companies in Nepal?

Yes. Foreign companies in eligible sectors may benefit from:

• Tax holidays (up to 10 years) for priority sectors (e.g., tourism, hydropower)

• Customs duty exemptions on capital equipment imports

• Reduced corporate tax rates for export-oriented and manufacturing businesses

• Repatriation of profits in foreign currency (subject to tax clearance and NRB approval)

The standard corporate income tax in Nepal is 25%, but effective rates may be lower depending on incentives.

9. What are the ongoing compliance requirements?

After company incorporation in Nepal, you must comply with:

• Annual financial audits by a certified auditor

• Filing tax returns and advance tax payments

• Renewing ward/municipality registrations annually

• Filing updates with the Company Registrar for share changes, directorship changes, etc.

• Social Security Fund (SSF) registration for employees

• Timely repatriation approvals for dividends or capital

Missing any of these may lead to penalties or loss of legal standing.

10. Can I repatriate my profits and capital investment from Nepal?

Yes. Nepal’s legal framework permits 100% repatriation of:

• Dividends

• Profits

• Capital gains

• Royalties (if registered under a technology transfer agreement)

To repatriate, the company must:

• Obtain a tax clearance certificate

• Apply to Nepal Rastra Bank (NRB) with proof of inward remittance

• Show compliance with all filing obligations

The repatriation is done in convertible currency (typically USD or EUR) and processed via official banking channels.

Final Thoughts

Understanding the legal and procedural aspects of company incorporation in Nepal is critical for international businesses entering the market. With transparent FDI laws, digital incorporation tools, and a favorable tax environment, Nepal continues to make strides in becoming an investor-friendly destination.

Whether you're establishing a regional presence or launching a new venture, the 2025 environment offers clarity, incentives, and structure to support your growth.

Key Takeaways for Foreign Companies

✅ 100% foreign ownership allowed in most sectors
✅ Minimum FDI requirement: NPR 20 million (waived for IT startups)
✅ Company registration takes ~4–8 weeks
✅ Profits and capital can be repatriated legally
✅ Post-registration compliance is critical for long-term success