Foreign nationals who want to register a company in Nepal must follow a structured legal process under Nepali law. Nepal allows foreign investment through the Foreign Investment and Technology Transfer Act (FITTA), 2019 and the Companies Act, 2006. The Office of the Company Registrar (OCR) is the primary authority responsible for company registration in Nepal. Foreigners must gather, prepare, and submit a specific set of documents before their company can be legally registered.
This article explains every document a foreigner needs to register a company in Nepal, the legal framework, the registration process, and other relevant information.
Legal Framework for Foreign Company Registration in Nepal
Before gathering documents, foreign investors must understand the laws that govern company registration in Nepal.
- Companies Act, 2006 (Second Amendment, 2017): This act governs the formation, registration, and operation of all companies in Nepal.
- Foreign Investment and Technology Transfer Act (FITTA), 2019: This act regulates foreign investment, technology transfer, and repatriation of profits.
- Industrial Enterprises Act, 2020: This act defines the types of industries and their operational requirements.
- Special Economic Zone Act, 2016: Applicable for companies operating in Special Economic Zones (SEZ).
The Department of Industry (DoI) and the Investment Board Nepal (IBN) are the main bodies that approve foreign investment proposals. All foreign-invested companies must register with the Office of the Company Registrar (OCR) under the Ministry of Industry, Commerce and Supplies.
You can visit the official OCR portal at www.ocr.gov.np and the Department of Industry at www.doind.gov.np.
Types of Companies a Foreigner Can Register in Nepal
Foreign nationals can register the following types of companies in Nepal:
Company TypeMinimum Paid-up Capital (Foreign)Foreign Ownership AllowedPrivate Limited CompanyNPR 20 million (approx. USD 150,000)Up to 100% in most sectorsPublic Limited CompanyNPR 100 millionUp to 100% in permitted sectorsBranch Office of Foreign CompanyAs per parent company requirement100% foreign-ownedLiaison OfficeNo specific capital requirement100% foreign-ownedJoint Venture CompanyNegotiable with Nepali partnerAs per agreement
The minimum foreign investment threshold as per FITTA 2019 is NPR 20 million (approximately USD 150,000) for most sectors. Some sectors have different thresholds or restrictions under the Negative List defined by the Government of Nepal.
Documents Required for a Foreigner to Register a Company in Nepal
The document requirements are divided into two categories: documents related to the foreign investor personally and documents related to the company formation.
1. Personal Documents of the Foreign Investor
Every foreign national must submit certified and notarized copies of the following personal documents:
- Valid Passport: A clear and valid copy of the foreign national’s passport, including the personal information page and any visa pages.
- Passport-Sized Photographs: Recent passport-sized photographs of all foreign shareholders and directors.
- Proof of Residential Address: A utility bill, bank statement, or official document showing the current residential address of the foreign investor.
- National Identity Document: If applicable, a national ID or driving license from the investor’s home country.
- No Objection Certificate (NOC): Some nationalities may need an NOC from their home country government or embassy, depending on bilateral agreements.
- Background Verification Documents: Police clearance certificate or a criminal background check from the investor’s home country.
All documents must be notarized by a public notary in the investor’s home country and apostilled (for countries under the Hague Convention) or attested by the Nepali Embassy in the respective country.
2. Documents for Foreign Company (If Registering as a Branch or Subsidiary)
If the applicant is a foreign company registering a branch office or a subsidiary in Nepal, additional documents from the parent company are required:
- Certificate of Incorporation: The official certificate showing that the parent company is legally registered in its home country.
- Memorandum and Articles of Association (MoA/AoA): The constitutional documents of the parent company.
- Board Resolution: A certified board resolution authorizing the establishment of a company or branch office in Nepal and appointing an authorized representative.
- Company’s Latest Annual Report or Audited Financial Statements: To prove the financial standing of the parent company (last 1-3 years).
- Tax Clearance Certificate: From the home country tax authority, confirming the parent company is in good standing.
- Proof of Company’s Registered Address: Official document showing the parent company’s registered office address.
- Power of Attorney: Authorizing a local representative or legal agent in Nepal to act on behalf of the company.
All these documents must also be notarized and apostilled or attested by the Nepali Embassy in the country of origin.
3. Documents for Company Registration at OCR Nepal
Once personal and company documents are ready, the following documents must be prepared specifically for submission to the Office of the Company Registrar (OCR):
- Application Form: Duly filled company registration application form available at OCR or online at www.ocr.gov.np.
- Memorandum of Association (MoA): Prepared as per the Companies Act, 2006, stating the company name, objectives, registered address, share capital, and shareholder details.
- Articles of Association (AoA): Prepared as per the Companies Act, 2006, specifying the rules and regulations for internal management of the company.
- Proposed Company Name Approval: The company name must be approved by OCR before submission. Foreigners must apply for name reservation first.
- Details of Shareholders: Full names, nationalities, passport numbers, and shareholding percentages of all shareholders.
- Details of Directors: Full names, nationalities, passport copies, and addresses of all board members.
- Registered Office Address Proof in Nepal: Lease agreement or ownership document of the company’s office in Nepal.
- Consent Letter from Directors: Signed consent from all directors agreeing to serve as directors of the company.
4. Documents for Foreign Investment Approval from Department of Industry
Before or alongside company registration, foreign investors must obtain Foreign Investment Approval from the Department of Industry (DoI) or the Investment Board Nepal (IBN) for investments exceeding NPR 6 billion.
Documents required for foreign investment approval include:
- Foreign Investment Application Form: Available on the DoI website at www.doind.gov.np.
- Project Proposal / Business Plan: A detailed description of the proposed business activities, market analysis, employment generation plan, and financial projections.
- Source of Fund Documentation: Bank statements or fund transfer proof showing the origin of investment capital.
- Technology Transfer Agreement (if applicable): If the foreign company is bringing in technology, a copy of the technology transfer agreement.
- Environmental Impact Assessment (EIA): Required for industries that may have environmental impact, as per Environment Protection Act, 2019.
- Joint Venture Agreement (if applicable): If entering into a joint venture with a Nepali entity, a signed joint venture agreement must be submitted.
Step-by-Step Process for Foreign Company Registration in Nepal
- Reserve Company Name: Apply for company name reservation through OCR online portal or physical office.
- Obtain Foreign Investment Approval: Submit foreign investment application to the Department of Industry or Investment Board Nepal.
- Prepare MoA and AoA: Draft and notarize Memorandum of Association and Articles of Association as per Companies Act, 2006.
- Submit Documents to OCR: File all required documents along with registration fees at the Office of the Company Registrar.
- Receive Company Registration Certificate: OCR issues the Certificate of Company Registration upon successful verification.
- Register for PAN/VAT: Register with the Inland Revenue Department (IRD) for Permanent Account Number (PAN) and VAT if applicable.
- Obtain Industry Registration Certificate: Register with the Department of Industry under the Industrial Enterprises Act, 2020.
- Open a Corporate Bank Account: Open a company bank account in a licensed Nepali bank.
- Bring in Foreign Capital: Transfer foreign investment into the company’s Nepali bank account and report to Nepal Rastra Bank (NRB).
Document Checklist Summary Table
Document CategorySpecific DocumentAuthorityPersonal DocumentsPassport, Photos, Address ProofNotary/EmbassyCorporate Documents (Parent Company)Certificate of Incorporation, MoA/AoA, Board ResolutionNotary/ApostilleOCR Registration DocumentsApplication Form, MoA, AoA, Shareholder DetailsOffice of Company RegistrarForeign Investment ApprovalProject Proposal, Fund Source, Application FormDepartment of IndustryTax RegistrationPAN/VAT ApplicationInland Revenue DepartmentOffice Address ProofLease Agreement in NepalLocal Authority
Common Reasons for Document Rejection at OCR
Foreign investors often face document rejection due to:
- Documents not properly notarized or apostilled
- Passport copies that are unclear or expired
- MoA and AoA not compliant with Companies Act, 2006
- Company name not pre-approved by OCR
- Incomplete project proposal for DoI approval
- Missing board resolution or improperly worded power of attorney
Frequently Asked Questions (FAQs)
Q1. Can a 100% foreign-owned company be registered in Nepal?
Yes. As per FITTA 2019, a foreigner can own 100% of a company in Nepal, except in sectors listed under the Negative List defined by the Government of Nepal, such as retail trading, mass media, and cottage industries.
Q2. What is the minimum investment amount for foreign company registration in Nepal?
The minimum foreign investment as per FITTA 2019 is NPR 20 million (approximately USD 150,000). This threshold applies to most sectors, though some sectors may have higher requirements.
Q3. Do foreign documents need to be apostilled for company registration in Nepal?
Yes. All foreign documents submitted for company registration in Nepal must be apostilled if the country is a signatory to the Hague Convention or attested by the Nepali Embassy in the investor’s home country.
Q4. How long does it take to register a foreign company in Nepal?
The company registration process typically takes 15 to 45 working days, depending on the completeness of documents, approval from the Department of Industry, and processing time at the Office of the Company Registrar.
Q5. Is a local Nepali director required for foreign company registration?
No, Nepali law does not mandate a local Nepali director for foreign-invested companies. However, appointing a local director or legal representative facilitates smoother operations and government interactions in Nepal.
Q6. Where can a foreigner get the company registration application form in Nepal?
The application form is available at the Office of the Company Registrar (OCR) located in Tripureshwor, Kathmandu, and also downloadable from the official website at www.ocr.gov.np.
Conclusion
Registering a company in Nepal as a foreigner requires a comprehensive set of documents including personal identification, corporate documents, investment approval forms, and company incorporation papers. All documents must comply with the Companies Act, 2006, FITTA 2019, and the procedures set by the Office of the Company Registrar and the Department of Industry. Proper document preparation, notarization, and apostille are the most critical steps to ensure a smooth registration process. Foreign investors are advised to consult a registered Nepali lawyer or company secretary to ensure full legal compliance before submitting documents to the concerned authorities.Add to Conversation
