Introduction
Foreign Direct Investment (FDI) in Nepal has gained significant momentum following the promulgation of the Foreign Investment and Technology Transfer Act (FITTA) 2019. The Government of Nepal actively encourages foreign investors to establish manufacturing companies, service enterprises, and technology-driven businesses within the country. Understanding the comprehensive fee structure for foreign company registration is crucial for international investors planning to enter the Nepalese market. This guide provides detailed information about registration costs, government fees, and associated expenses for establishing FDI companies in Nepal under current legal frameworks.
Requirements for Foreign Company Registration
Basic Eligibility Criteria
Foreign investors must meet specific requirements under FITTA 2019 and the Company Act 2063 to establish companies in Nepal. The minimum investment threshold varies by sector, with manufacturing industries requiring lower capital compared to service sectors.
Investment Thresholds
- Manufacturing Sector: Minimum NPR 50 million investment
- Service Sector: Minimum NPR 100 million investment
- Energy Sector: Minimum NPR 500 million investment
- Infrastructure Projects: Minimum NPR 1 billion investment
Sectoral Restrictions
The Foreign Investment Policy 2014 outlines sectors where foreign investment is prohibited, restricted, or freely allowed. Investors must verify their business activities align with permitted sectors before initiating registration procedures.
Detailed Registration Process
Step 1: Obtain Investment Approval from Department of Industry
Foreign investors must first secure investment approval from the Department of Industry (DOI). Submit the investment proposal along with required documents including feasibility study, environmental impact assessment, and technical specifications. The DOI evaluates proposals based on economic benefits, technology transfer potential, and employment generation capacity.
Step 2: Reserve Company Name at Office of Company Registrar
Visit the Office of Company Registrar (OCR) to reserve your preferred company name. The name reservation process requires submitting three alternative names with justification for each option. Names must comply with Company Act 2063 provisions and cannot conflict with existing registered entities.
Step 3: Prepare and Submit Incorporation Documents
Prepare comprehensive incorporation documents including Memorandum of Association, Articles of Association, and Board Resolution. These documents must be drafted in accordance with Company Act 2063 requirements and signed by all founding shareholders and directors.
Step 4: Complete Company Registration at OCR
Submit all required documents to OCR along with prescribed fees. The registration officer reviews documents for legal compliance, verifies shareholder information, and ensures adherence to foreign investment regulations under FITTA 2019.
Step 5: Obtain Post-Registration Certificates and Permits
After successful registration, obtain necessary certificates including Tax Registration Certificate from Inland Revenue Department, VAT registration if applicable, and sector-specific licenses from relevant regulatory authorities.
Documents Required
Primary Documentation
- Investment Approval Letter from Department of Industry
- Memorandum and Articles of Association drafted by qualified legal professionals
- Board Resolution authorizing company incorporation
- Passport Copies of all foreign shareholders and directors
- Bank Guarantee or deposit certificate proving minimum capital requirement
Supporting Documents
- Feasibility Study Report detailing project viability and market analysis
- Environmental Impact Assessment for manufacturing and industrial projects
- Technology Transfer Agreement if applicable
- Joint Venture Agreement for partnership arrangements
- Power of Attorney for authorized representatives
Compliance Certificates
Foreign investors must provide certificates proving legal standing in their home countries, including certificate of good standing, tax clearance certificates, and audited financial statements of parent companies.
Time Frame & Cost Structure
Registration Fees Table
Service TypeGovernment Fee (NPR)Professional Fee (NPR)Total Estimated Cost (NPR)Investment Approval (DOI)25,00050,00075,000Name Reservation1,0005,0006,000Company Registration15,00075,00090,000Tax Registration2,00010,00012,000VAT Registration1,0005,0006,000Municipal License5,00015,00020,000Environmental Clearance50,000100,000150,000Labor Permit Processing10,00025,00035,000Bank Account Opening5,00020,00025,000Miscellaneous Expenses-50,00050,000TOTAL ESTIMATED COST114,000355,000469,000
Processing Timeline
The complete registration process typically requires 45-60 working days, depending on sector complexity and document completeness. Manufacturing companies may require additional time for environmental clearances and technical approvals.
Additional Costs
Foreign investors should budget for translation services, legal consultation fees, and ongoing compliance costs. Annual renewal fees for various licenses and permits range from NPR 50,000 to NPR 200,000 depending on business scale.
Post-Registration Obligations
Regulatory Compliance Requirements
Registered foreign companies must maintain continuous compliance with FITTA 2019, Company Act 2063, and sector-specific regulations. This includes filing annual returns, maintaining statutory books, and submitting periodic reports to relevant authorities.
Tax Obligations
Foreign companies must comply with Income Tax Act 2058, VAT Act 2052, and other applicable tax legislation. Regular tax filing, advance tax payments, and audit requirements form essential compliance obligations.
Employment and Labor Compliance
Companies must adhere to Labor Act 2074 provisions regarding employee rights, social security contributions, and workplace safety standards. Foreign employees require work permits under Immigration Act 2049.
Environmental and Social Responsibilities
Manufacturing companies must maintain environmental compliance certificates and implement corporate social responsibility programs as mandated by relevant legislation and government policies.
Frequently Asked Questions
What is the minimum investment required for foreign company registration in Nepal?
The minimum investment varies by sector: NPR 50 million for manufacturing, NPR 100 million for services, NPR 500 million for energy, and NPR 1 billion for infrastructure projects under FITTA 2019.
How long does the foreign company registration process take in Nepal?
The complete registration process typically takes 45-60 working days, including investment approval, name reservation, incorporation, and obtaining necessary licenses from various government departments and regulatory authorities.
Where should foreign investors submit their company registration applications?
Foreign investors must submit applications to the Department of Industry for investment approval, followed by company registration at the Office of Company Registrar in Kathmandu or respective provincial offices.
What are the key requirements for foreign company registration in Nepal?
Key requirements include minimum capital investment, investment approval from DOI, compliance with sectoral restrictions, preparation of legal documents, appointment of local directors, and obtaining necessary licenses.
What is the total estimated cost for registering a foreign company in Nepal?
The total estimated cost ranges from NPR 400,000 to NPR 500,000, including government fees of approximately NPR 114,000 and professional service fees of NPR 355,000 for standard registration procedures.
