Foreign companies that want to establish a presence in Nepal without engaging in direct commercial activities can register a contact office in Nepal. A contact office, sometimes called a liaison office, allows a foreign company to maintain a base of operations in Nepal for limited purposes. This article explains the legal framework, registration process, required documents, fees, and restrictions associated with contact office registration for foreign companies in Nepal.
What Is a Contact Office for a Foreign Company in Nepal?
A contact office is a representative office established by a foreign company in Nepal. It does not generate revenue or conduct business transactions in Nepal. Instead, it performs support functions such as market research, communication facilitation, promotion of the parent company’s products or services, and coordination between the foreign parent company and Nepali clients or partners.
A contact office is different from a branch office or a subsidiary company. A branch office can conduct business activities under certain conditions, whereas a contact office is strictly limited to liaison and representational activities.
The Companies Act, 2063 (2006) and the Foreign Investment and Technology Transfer Act (FITTA), 2019 govern the registration and operation of foreign company offices in Nepal, including contact offices.
Legal Framework Governing Contact Office Registration in Nepal
Companies Act, 2063 (2006)
The Companies Act, 2063 of Nepal provides the foundational legal structure for company registration, including foreign company offices. Chapter 19 of the Act deals with foreign companies and their registration requirements in Nepal. Under this Act, any foreign company that establishes a place of business in Nepal must register with the Office of the Company Registrar (OCR).
Foreign Investment and Technology Transfer Act (FITTA), 2019
The FITTA, 2019 regulates foreign investment in Nepal. Under this Act, foreign companies must receive prior approval from the Department of Industry (DOI) or relevant authority before establishing any form of office in Nepal. FITTA, 2019 defines the types of business a foreign entity can operate and restricts certain sectors from foreign participation.
Industrial Enterprises Act, 2076 (2020)
The Industrial Enterprises Act, 2076 also applies where a foreign company’s contact office is related to industrial promotion or project facilitation activities.
You can refer to the official Office of the Company Registrar website at https://www.ocr.gov.np and the Department of Industry website at https://www.doind.gov.np for updated legal provisions.
Who Can Register a Contact Office in Nepal?
Any foreign company incorporated or registered outside Nepal can register a contact office in Nepal. The parent company must:
- Be legally registered and operational in its home country
- Have a valid legal standing in the country of incorporation
- Provide proof that the contact office will not engage in revenue-generating commercial activities in Nepal
- Have a designated representative in Nepal
Permitted Activities of a Contact Office in Nepal
A contact office in Nepal can only perform the following non-commercial activities:
- Market research and information gathering
- Promotion and marketing of the parent company’s services and products
- Coordination between the parent company and Nepali entities
- Technical assistance facilitation as directed by the parent company
- Communication services between Nepal-based clients and the foreign parent
- Project monitoring for development-related activities funded by the parent company
A contact office cannot sign contracts, invoice clients, receive payments, or generate taxable income in Nepal.
Restricted Activities for a Contact Office
The following activities are not permitted for a contact office registered in Nepal:
- Conducting direct trade or business transactions
- Earning revenue from Nepali clients or the government
- Importing and selling goods commercially
- Operating as a tax-registered business entity for commercial purposes
If a foreign company wants to engage in business activities in Nepal, it must register a branch office or a subsidiary company under the Companies Act, 2063.
Documents Required for Contact Office Registration in Nepal
The following documents are required to register a contact office for a foreign company in Nepal:
From the Parent Foreign Company:
- Certificate of Incorporation of the parent company (notarized and apostilled)
- Memorandum and Articles of Association of the parent company
- Board resolution authorizing the establishment of a contact office in Nepal
- Power of Attorney in favor of the authorized representative in Nepal (notarized and apostilled)
- Audited financial statements of the parent company for the last one to two fiscal years
- Tax clearance or good standing certificate from the home country authority
- Company profile including nature of business, scope, and headquarters details
From the Authorized Representative in Nepal:
- Citizenship certificate or passport copy of the authorized representative
- Recent passport-size photographs
- Office address proof in Nepal (rental agreement or ownership certificate)
Other Documents:
- Application form prescribed by the Office of the Company Registrar
- Recommendation letter from the Department of Industry (where applicable)
- No Objection Certificate (NOC) if required by sector-specific regulators
All foreign documents must be authenticated and translated into Nepali by a certified translator.
Step-by-Step Process for Contact Office Registration in Nepal
Step 1: Obtain Prior Approval from the Department of Industry
The foreign company must first apply to the Department of Industry (DOI) under the Ministry of Industry, Commerce and Supplies. The DOI reviews the application and grants approval for the establishment of a contact office in Nepal.
Step 2: Prepare and Authenticate Documents
All incorporation documents, board resolutions, and powers of attorney from the parent company must be notarized, apostilled, and legalized through the Nepali Embassy or Consulate in the home country.
Step 3: Submit Application to the Office of the Company Registrar
After obtaining DOI approval, the authorized representative submits a formal application to the Office of the Company Registrar (OCR) along with all required documents and applicable fees.
Step 4: Verification and Review by OCR
The OCR reviews the submitted documents for completeness and legal compliance. The OCR may request additional documents or clarifications during this stage.
Step 5: Name Reservation
The name of the contact office in Nepal must reflect the parent company’s name and include “Contact Office” in the designation. The OCR verifies that the name is not already in use.
Step 6: Payment of Registration Fees
The applicant pays the prescribed registration fee as set by the OCR fee schedule. The fee depends on the nature and paid-up capital or scope of the parent company.
Step 7: Receive Registration Certificate
Upon successful review and payment, the OCR issues the Registration Certificate for the contact office. The contact office can then begin its liaison activities in Nepal.
Step 8: Tax Registration (PAN)
The contact office must register with the Inland Revenue Department (IRD) for a Permanent Account Number (PAN), even if it does not conduct commercial activities. PAN registration is mandatory for all entities operating in Nepal.
Fees for Contact Office Registration in Nepal
ParticularsApproximate Fee (NPR)DOI Application Processing FeeNPR 5,000 – 10,000OCR Registration FeeNPR 9,000 – 15,000 (varies by capital)Document Authentication/LegalizationVariable (per document)Certified Translation FeeNPR 500 – 1,000 per pageAnnual Renewal FeeNPR 5,000 – 10,000
Fees are subject to revision by the Office of the Company Registrar and the Department of Industry. Verify current fees at https://www.ocr.gov.np.
Validity and Renewal of Contact Office Registration
A contact office registration in Nepal is typically valid for one year and must be renewed annually. The renewal application must be submitted to the OCR before the expiration of the existing registration.
Renewal RequirementDetailsRenewal PeriodAnnualRenewal Application DeadlineBefore expiry of existing registrationDocuments Required for RenewalUpdated financial statements, PAN clearance, activity reportRenewal AuthorityOffice of the Company Registrar (OCR)Penalty for Late RenewalAdditional fine as per OCR regulations
Key Differences Between Contact Office, Branch Office, and Subsidiary
- A contact office performs only liaison and representational activities. It cannot earn revenue in Nepal.
- A branch office is a registered extension of the foreign parent company and can engage in limited commercial activities as approved by the DOI.
- A subsidiary company is an independent Nepali company with foreign equity participation and operates under the full scope of Nepali company law.
Foreign companies must choose the right structure based on their business objectives in Nepal.
Compliance Requirements for Contact Office in Nepal
After registration, a contact office must comply with the following:
- Annual renewal of registration with the OCR
- Annual tax filing with the Inland Revenue Department even without taxable income
- Maintaining books of accounts as required by Nepali accounting standards
- Submitting activity reports to DOI or OCR as required
- Not engaging in commercial activities beyond the scope defined in the registration
Failure to comply with these requirements can result in cancellation of the contact office registration.
Frequently Asked Questions (FAQs)
1. What is a contact office in Nepal for a foreign company?
A contact office is a non-commercial representative office established by a foreign company in Nepal. It performs liaison, coordination, market research, and promotional activities without engaging in revenue-generating business transactions as defined under the Companies Act, 2063.
2. Which authority registers a contact office in Nepal?
The Office of the Company Registrar (OCR) under the Government of Nepal registers a contact office. Prior approval from the Department of Industry (DOI) is also required before submitting the application to the OCR.
3. Can a contact office in Nepal earn revenue or sign contracts?
No. A contact office cannot earn revenue, invoice clients, sign business contracts, or conduct commercial transactions in Nepal. Its activities are strictly limited to non-commercial liaison and representational functions.
4. How long does contact office registration take in Nepal?
The registration process typically takes 15 to 30 working days after submitting complete documents. Delays may occur if additional documents or clarifications are requested by DOI or OCR.
5. Is PAN registration mandatory for a contact office in Nepal?
Yes. All entities, including contact offices, must register for a Permanent Account Number (PAN) with the Inland Revenue Department (IRD) regardless of whether they conduct taxable activities in Nepal.
6. What happens if a contact office conducts commercial activities in Nepal?
If a contact office engages in unauthorized commercial activities, it violates the Companies Act, 2063 and FITTA, 2019. This can result in cancellation of registration, financial penalties, and legal action against the authorized representative in Nepal.
Conclusion
Contact office registration for a foreign company in Nepal follows a defined legal process governed by the Companies Act, 2063, FITTA, 2019, and related regulations. The registration involves approval from the Department of Industry, submission to the Office of the Company Registrar, and ongoing compliance with annual renewal and tax obligations. Foreign companies must clearly understand the scope and restrictions of a contact office before proceeding with registration. For the most current procedures and fees, refer to the official OCR website and the Department of Industry website.Add to Conversation
