Foreign nationals who want to establish a business presence in Nepal must follow a structured legal process governed by multiple laws and regulatory bodies. The process of online company registration for foreigners in Nepal has become more streamlined in recent years, with the government digitizing several key steps. This article covers every aspect of the company registration process for foreign investors, including legal requirements, document checklists, applicable laws, capital requirements, and procedural steps.
Legal Framework Governing Foreign Company Registration in Nepal
The registration of a company by foreign nationals in Nepal falls under several laws. Understanding these laws is the foundation of the entire process.
- Companies Act, 2063 (2006) – Governs the incorporation, operation, and management of all companies in Nepal.
- Foreign Investment and Technology Transfer Act, 2075 (FITTA 2019) – Regulates foreign direct investment (FDI) in Nepal, defines eligible sectors, and sets out approval procedures.
- Industrial Enterprises Act, 2076 (2020) – Covers industrial operations and licensing.
- Income Tax Act, 2058 (2002) – Governs tax obligations of registered companies.
- Special Economic Zone Act, 2016 – Applicable for businesses operating within Special Economic Zones.
The primary regulatory body for company registration is the Office of the Company Registrar (OCR), while the Department of Industry (DoI) or the Investment Board Nepal (IBN) handles foreign investment approvals depending on the investment size.
Types of Companies Foreigners Can Register in Nepal
Foreign investors can register the following types of companies in Nepal:
1. Private Limited Company (Pvt. Ltd.)
This is the most common form chosen by foreign investors. A private limited company requires a minimum of one shareholder and one director. Foreign nationals can hold 100% ownership in most sectors as permitted under FITTA 2075.
2. Public Limited Company
A public limited company requires at least seven shareholders. It can issue shares to the public and is subject to Securities Board of Nepal (SEBON) regulations if listed on the Nepal Stock Exchange (NEPSE).
3. Branch Office
A foreign company can establish a branch office in Nepal after obtaining approval from the OCR and the Department of Industry. A branch office operates as an extension of the parent company.
4. Liaison/Representative Office
A liaison office cannot conduct commercial activities directly but can manage communication, research, and coordination on behalf of the parent foreign company.
5. Joint Venture Company
Foreign nationals can also form a joint venture with a Nepali citizen or company. This is common in sectors where 100% foreign ownership is restricted.
Sectors Open and Restricted for Foreign Investment
Under FITTA 2075 and the Negative List issued by the Government of Nepal, not all sectors are open to foreign investment.
CategoryDetailsFully Open SectorsManufacturing, IT/software, tourism, hydropower, education (higher), healthcare, infrastructurePartially Open (Joint Venture Required)Some service sectors, domestic airlines, certain retail businessesRestricted/Prohibited SectorsCottage and small industries, personal service businesses (beauty parlors, tailoring, etc.), poultry and fishery below threshold, money lending, travel agencies (below certain capital), arms and ammunition
The complete negative list is published by the Ministry of Industry, Commerce and Supplies (MoICS).
Minimum Foreign Investment Capital Requirement in Nepal
One of the key requirements under FITTA 2075 is the minimum capital threshold for foreign investors.
- The minimum foreign investment amount is NPR 20 million (approximately USD 150,000) for most business sectors.
- For technology-based and specialized businesses, exceptions may apply.
- The capital must be brought in through a banking channel (foreign currency inward remittance).
- Joint venture companies must ensure the Nepali partner holds at least the minimum statutory share in restricted sectors.
This capital threshold was significantly reduced from the earlier requirement to attract more foreign direct investment (FDI) into Nepal.
Online Company Registration Process for Foreigners in Nepal
The Office of the Company Registrar operates an online company registration portal where applicants can complete most steps digitally. Below is the step-by-step process:
Step 1: Obtain Foreign Investment Approval
Before registering a company, a foreign investor must obtain Foreign Investment Approval from:
- Department of Industry (DoI) – for investments up to NPR 6 billion
- Investment Board Nepal (IBN) – for investments exceeding NPR 6 billion
Submit an application at the Department of Industry with the required documents.
Step 2: Name Reservation via OCR Portal
- Visit the OCR online portal at ocr.gov.np
- Create an account and log in
- Submit a company name reservation request
- The OCR checks name availability and approves within 7 working days
Step 3: Prepare and Submit the Memorandum of Association (MoA) and Articles of Association (AoA)
- Draft the Memorandum of Association (MoA) and Articles of Association (AoA) as per the Companies Act 2063
- These documents define the company’s objectives, capital structure, share distribution, and internal governance
Step 4: Upload Documents on the OCR Portal
- Log in to the OCR online portal
- Fill in the company registration form (Form No. 1 for Private Limited Company)
- Upload all scanned documents
- Pay the registration fee online
Step 5: Verification and Issuance of Certificate of Incorporation
- The OCR verifies submitted documents
- Upon approval, the Certificate of Incorporation is issued
- This certificate is the legal proof of company existence in Nepal
Step 6: Post-Registration Compliance
After receiving the Certificate of Incorporation, complete the following:
- Obtain PAN (Permanent Account Number) from the Inland Revenue Department (IRD)
- Register for VAT if annual turnover exceeds NPR 5 million
- Obtain a Business Registration Certificate from the local municipality
- Register with the Department of Labour if employing workers
- Open a corporate bank account in Nepal
Documents Required for Foreign Company Registration in Nepal
The following documents are required for online company registration by foreign nationals:
For the Foreign Investor/Shareholder:
- Passport copy (notarized and legalized)
- Passport-size photographs
- Foreign Investment Approval letter from DoI or IBN
- Proof of address (bank statement, utility bill)
- Bank reference letter
- Tax clearance or equivalent document from the home country
For the Company:
- Proposed company name and objectives
- Memorandum of Association (MoA)
- Articles of Association (AoA)
- Filled OCR registration form (Form No. 1)
- Proof of registered office address in Nepal (rent agreement or ownership document)
- Director’s consent letter
- Share allotment details
For Branch or Liaison Office:
- Parent company’s Certificate of Incorporation
- Parent company’s MoA/AoA
- Board resolution authorizing establishment of branch in Nepal
- Power of attorney in favor of a Nepal-based representative
All foreign documents must be notarized and apostilled or legalized by the Nepali Embassy in the concerned country, or legalized through the Ministry of Foreign Affairs of Nepal.
Company Registration Fees for Foreign Investors
The OCR charges company registration fees based on the authorized capital of the company.
Authorized Capital (NPR)Registration Fee (NPR)Up to 1,00,0001,0001,00,001 to 3,00,0004,5003,00,001 to 10,00,0009,50010,00,001 to 30,00,00014,50030,00,001 to 1,00,00,00024,500Above 1,00,00,00024,500 + NPR 5 per 10,000 additional
These fees are subject to change. Check the latest fee schedule at the OCR official website.
Timeline for Foreign Company Registration in Nepal
The total time for completing company registration in Nepal for foreigners generally takes 30 to 60 working days, broken down as follows:
- Foreign Investment Approval from DoI – 15 to 30 working days
- Name Reservation at OCR – 5 to 7 working days
- Document verification and Certificate of Incorporation – 7 to 15 working days
- PAN/VAT Registration – 3 to 7 working days
- Municipal Business License – 5 to 10 working days
The timeline may vary based on document completeness and workload at government offices.
Repatriation of Profit and Investment for Foreign Investors
Under FITTA 2075, foreign investors have the legal right to repatriate:
- Profit and dividends earned from the investment
- Returns from the sale of shares
- Royalties and service fees
- Principal amount of the original investment upon winding up
Repatriation must be done through a commercial bank in Nepal in foreign currency, following the procedures of Nepal Rastra Bank (NRB), the central bank.
Frequently Asked Questions (FAQs)
Q1. Can a foreigner register a 100% foreign-owned company in Nepal?
Yes. Under FITTA 2075, foreign nationals can register a 100% foreign-owned private limited company in most sectors except those listed in the negative list. Prior approval from the Department of Industry is mandatory.
Q2. What is the minimum capital requirement for foreign company registration in Nepal?
The minimum foreign investment threshold is NPR 20 million (approximately USD 150,000) as prescribed under FITTA 2075. This amount must be brought in through official banking channels in foreign currency.
Q3. Is the entire company registration process available online in Nepal?
Most of the company registration steps are available through the OCR online portal at ocr.gov.np. However, some physical verifications, document submissions at DoI, and municipality registrations still require in-person visits.
Q4. Which authority approves foreign investment in Nepal?
The Department of Industry (DoI) approves foreign investments up to NPR 6 billion. The Investment Board Nepal (IBN) handles approvals for investments exceeding NPR 6 billion. Both operate under government oversight.
Q5. How long does it take to register a foreign company in Nepal?
The complete process, including foreign investment approval and company incorporation, typically takes 30 to 60 working days. Delays may occur due to incomplete documents or pending verification at government offices.
Q6. Can a foreign company open a branch office in Nepal without forming a new company?
Yes. A foreign company can establish a branch office in Nepal after obtaining approval from the OCR and the Department of Industry. The branch must submit parent company documents including MoA, AoA, and a board resolution.
Conclusion
Online company registration for foreigners in Nepal follows a multi-step legal process governed by the Companies Act 2063, FITTA 2075, and guidelines from the OCR, DoI, and IBN. Foreign investors must secure foreign investment approval first, followed by company incorporation, tax registration, and business licensing. The government has digitized significant portions of the registration process through the OCR portal, making it more accessible for international investors. Compliance with capital requirements, documentation standards, and sector restrictions is essential for a successful and legally valid company registration in Nepal.
