Company Registration Process in Nepal – Complete Guide

Back to home

Company Registration Process in Nepal – Complete Guide

Registering a company in Nepal is the first step toward legally operating a business. Nepal’s business environment encourages entrepreneurship across sectors like IT, tourism, manufacturing, retail, and services. This guide provides a detailed overview of the company registration process, required documents, types of companies, fees, timelines, and post-registration compliance.

Legal Framework for Company Registration in Nepal

  • Companies Act, 2006 – Governs the incorporation, management, and compliance of companies.
  • Income Tax Act, 2058 (2001 A.D.) – Regulates taxation of companies.
  • Value Added Tax (VAT) Act – Applies if annual turnover exceeds NPR 5 million.
  • Foreign Investment and Technology Transfer Act (FITTA) – Applicable if foreign investors are involved.

Types of Companies in Nepal

  1. Private Limited Company
    • Minimum 1 shareholder, maximum 50 shareholders.
    • Suitable for small and medium businesses.
  2. Public Limited Company
    • Minimum 7 shareholders.
    • Can issue shares to the public; suitable for large-scale operations.
  3. Partnership Firm
    • Minimum 2 partners; no maximum limit.
    • Ideal for small-scale ventures.
  4. Sole Proprietorship
    • Owned by a single individual.
    • Simple registration with the municipality for small businesses.
  5. Branch or Liaison Office
    • For foreign companies entering Nepal.
    • Must comply with FITTA and OCR regulations.

Step-by-Step Company Registration Process

1. Name Reservation

  • Submit the proposed company name to the Office of Company Registrar (OCR).
  • Name must be unique and not similar to existing companies.

2. Prepare Memorandum and Articles of Association

  • MOA (Memorandum of Association) – Defines company objectives, capital structure, and shareholder details.
  • AOA (Articles of Association) – Outlines internal management and governance rules.

3. Submit Company Registration Application

  • Apply at OCR with:
    • MOA and AOA
    • Shareholder and director details
    • Registered office address
    • Passport-sized photographs of directors

4. PAN and VAT Registration

  • Obtain Permanent Account Number (PAN) from the Inland Revenue Department (IRD).
  • Register for VAT if annual turnover exceeds NPR 5 million.

5. Open Bank Account and Deposit Share Capital

  • Open a company bank account in a licensed bank.
  • Deposit the minimum required share capital (typically NPR 100,000 for Private Limited Companies).

6. Obtain Sector-Specific Licenses (if required)

  • Depending on the industry, additional approvals may be required from:
    • Department of Industry
    • Ministry of Tourism, Culture and Civil Aviation
    • Department of Drug Administration
    • Local municipality

Documents Required for Company Registration

  • Name approval certificate from OCR
  • MOA and AOA
  • Citizenship or passport copies of shareholders/directors
  • Passport-sized photographs of directors
  • Lease agreement or proof of office premises
  • Bank deposit certificate for share capital
  • Board resolution (if applicable)
  • Sector-specific license (if required)

Fees for Company Registration

  • OCR registration fee: NPR 5,000 – 100,000 depending on authorized capital
  • PAN registration: Free
  • VAT registration: Free
  • Sector-specific licenses: Varies by industry
  • Notary and legal fees: NPR 5,000 – 15,000

Timeline for Company Registration

  • Name approval: 1–2 working days
  • Company registration at OCR: 3–5 working days
  • PAN/VAT registration: 1–2 working days
  • Bank account opening & share capital deposit: 2–3 working days
  • Sector-specific licensing: 7–30 working days depending on industry

Total estimated time: 10–20 working days for standard company registration.

Post-Registration Compliance

  • Maintain books of accounts and audited financial statements.
  • File annual tax returns to IRD.
  • Renew company registration if required by law.
  • Renew sector-specific licenses annually.
  • Comply with labor, consumer protection, and environmental laws.

Benefits of Registering a Company in Nepal

  • Legal authority to operate business.
  • Access to bank accounts, loans, and investment opportunities.
  • Credibility with clients, suppliers, and investors.
  • Ability to enter contracts and tender for government projects.
  • Compliance with tax and labor laws reduces legal risks.

Workflow Diagram of Company Registration

flowchart TD
    A[Reserve Company Name at OCR] --> B[Prepare MOA & AOA]
    B --> C[Submit Registration Application at OCR]
    C --> D[Obtain PAN & VAT Registration]
    D --> E[Open Bank Account & Deposit Share Capital]
    E --> F[Obtain Sector-Specific Licenses if Required]
    F --> G[Commence Operations & Annual Compliance]

Conclusion

Registering a company in Nepal is a structured and straightforward process that requires name approval, MOA/AOA submission, OCR registration, PAN/VAT registration, bank account setup, and sector-specific licensing. Proper registration ensures legal operation, credibility, and eligibility for business growth while maintaining compliance with tax, labor, and industry regulations.