If you are planning to incorporate a company in Nepal, you are not alone. Nepal has become a strategic destination for foreign investors seeking South Asian growth. Competitive labour costs. A young workforce. Liberalised foreign direct investment policies.
This 2026 edition answers the most common questions foreign companies ask before entering Nepal. It combines legal accuracy with practical execution insights. The goal is clarity. Not complexity.
Whether you are a startup, SME, or multinational, this guide gives you a decisive head start.
Nepal is no longer just a frontier market. It is an emerging services and outsourcing hub.
Key drivers include:
Stable FDI framework under FITTA 2019
Access to India and China trade corridors
English-speaking, skilled workforce
Competitive operating costs
Full profit and capital repatriation rights
Foreign ownership is permitted in most sectors. Incorporation is transparent when done correctly.
To incorporate a company in Nepal, foreign investors must follow both company law and investment law. This dual framework is critical.
The two governing pillars are:
Companies Act 2006
Foreign Investment and Technology Transfer Act (FITTA) 2019
Ignoring either leads to delays or rejection.
Foreign companies can choose from several structures. The right choice depends on control, tax, and long-term plans.
This is the most common structure.
100 percent foreign ownership allowed
Separate legal entity in Nepal
Eligible for profit repatriation
Subject to corporate tax
Best for execution-based operations.
No separate legal personality
Parent company bears liability
Restricted commercial scope
Requires annual renewals
Suitable for market research only.
No revenue generation allowed
Limited operational scope
Temporary presence
| Factor | Private Limited (FDI) | Branch Office | Liaison Office |
|---|---|---|---|
| Legal status | Separate entity | Extension of parent | Extension of parent |
| Revenue allowed | Yes | Yes | No |
| Ownership | Up to 100% foreign | Parent company | Parent company |
| Profit repatriation | Allowed | Allowed | Not applicable |
| Tax liability | Corporate tax | Corporate tax | Minimal |
| Best for | Long-term operations | Project execution | Market entry |
As of 2026, the minimum foreign investment threshold is:
NPR 20 million per investor
This applies to equity-based FDI companies. Technology transfer agreements follow different thresholds.
The investment must be brought through formal banking channels and approved by:
Department of Industry (DoI) or
Investment Board Nepal (IBN) for large projects
Here is a simplified and practical overview.
Name reservation at the Company Registrar
FDI approval from DoI or IBN
Company registration under Companies Act
Capital injection via NRB-approved bank
PAN and VAT registration
Industry-specific licenses if required
Post-incorporation compliance setup
When documents are prepared correctly, timelines are predictable.
Name approval: 1 to 2 working days
FDI approval: 15 to 30 working days
Company registration: 1 to 3 days
Tax registration: 1 to 2 days
Average total timeline: 3 to 5 weeks
Delays usually come from incomplete filings or unclear shareholding structures.
Foreign investors must prepare both corporate and personal documentation.
Passport or incorporation certificate
Board resolution approving Nepal investment
Shareholding structure chart
Power of attorney
Source of funds declaration
All foreign documents must be notarised and, where applicable, apostilled.
Understanding tax exposure is critical before you incorporate a company in Nepal.
Corporate income tax: 25 percent
VAT: 13 percent
Withholding tax on dividends: 5 percent
Payroll taxes under Labour and SSF laws
Nepal follows the Income Tax Act 2002. Double taxation treaties apply with several countries.
One of the most asked questions by foreign companies is about exits and returns.
Nepal allows:
Repatriation of dividends
Repatriation of capital on exit
Repatriation of royalties and fees
Approvals are granted through Nepal Rastra Bank under FITTA 2019.
Clean accounting records are mandatory.
Incorporation is only the beginning.
Foreign companies must maintain:
Annual financial audits
Tax filings and advance tax
SSF and labour compliance
Industry renewals
NRB reporting for foreign transactions
Non-compliance can block profit repatriation.
Avoid these costly errors.
Choosing the wrong entity structure
Underestimating compliance workload
Poor capital injection planning
Ignoring labour law obligations
Working without local compliance partners
These mistakes are preventable with the right advisory support.
Local execution matters.
A strong partner helps you:
Secure faster approvals
Structure investment efficiently
Stay compliant across laws
Protect repatriation rights
Scale operations confidently
This is where most foreign companies win or lose time.
If you are ready to incorporate a company in Nepal, speak with specialists who manage FDI, legal, tax, and compliance end to end.
Book a consultation or request a tailored incorporation roadmap today.
To incorporate a company in Nepal in 2026 is a strategic move. The framework is investor-friendly. The opportunities are real. The compliance expectations are strict.
With the right structure and guidance, Nepal can become a profitable and scalable base for your regional expansion.
Yes. Most sectors allow full foreign ownership under FITTA 2019, subject to sectoral approvals.
On average, 3 to 5 weeks, depending on FDI approval timelines and document readiness.
The minimum foreign investment is NPR 20 million per investor for equity-based FDI companies.
Yes. Dividends, capital, and royalties are fully repatriable with NRB approval.
No. However, a local authorised representative is required for regulatory coordination.