Foreign investors and entrepreneurs planning to register a company in Nepal must understand that the process involves multiple government agencies, legal approvals, and procedural steps. The total timeline for a foreigner to register a company in Nepal typically ranges from 45 to 90 working days, depending on the type of business, investment size, and sector. This article provides a detailed breakdown of every stage, the applicable laws, required documents, and expected time at each step.
What Laws Govern Foreign Company Registration in Nepal?
Foreign company registration in Nepal is primarily governed by the following legislation:
- Foreign Investment and Technology Transfer Act (FITTA), 2019 (2076 BS) – the principal law regulating foreign direct investment (FDI) in Nepal
- Company Act, 2006 (2063 BS) – governs the incorporation and operation of companies
- Industrial Enterprises Act, 2020 (2076 BS) – applies to industrial enterprises including those with foreign investment
- Income Tax Act, 2002 (2058 BS) – governs taxation of all entities, including foreign-invested companies
- Nepal Rastra Bank (Foreign Exchange) Regulations – govern repatriation of profits and capital
Under FITTA 2019, foreign investors can invest in Nepal through equity investment, reinvestment of earnings, or technology transfer agreements. The Department of Industry (DOI) under the Ministry of Industry, Commerce and Supplies processes most foreign investment approvals. The Investment Board Nepal (IBN) handles large-scale investments, typically above NPR 6 billion or in priority sectors.
Visit the official Office of Company Registrar (OCR) and the Department of Industry websites for updated requirements.
What Are the Restricted and Prohibited Sectors for Foreign Investment?
Before beginning the registration process, a foreign investor must verify whether their intended business falls within the negative list under FITTA 2019. Schedule 1 of FITTA 2019 lists sectors where foreign investment is prohibited, such as:
- Cottage and small industries
- Personal service businesses (hair cutting, tailoring below certain scale)
- Arms and ammunition manufacturing
- Real estate business (except construction companies)
- Retail trade below a certain threshold
- Internal courier services
- Money exchange businesses (except as bank or financial institution)
Sectors not on the negative list are generally open to foreign investment subject to minimum investment thresholds and sector-specific regulations.
What Is the Complete Timeline for a Foreigner to Register a Company in Nepal?
The table below summarizes each stage of the foreign company registration process and the estimated time for each step:
StageActivityGovernment BodyEstimated TimeStage 1Pre-registration preparation and document collection—7–14 daysStage 2Foreign Investment ApprovalDepartment of Industry / IBN15–30 working daysStage 3Company Incorporation at OCROffice of Company Registrar3–7 working daysStage 4Industry / Business RegistrationDepartment of Industry7–15 working daysStage 5PAN and VAT RegistrationInland Revenue Department1–3 working daysStage 6Bank Account Opening (Foreign Currency & NPR)Commercial Bank3–7 working daysStage 7Sector-specific Licenses (if applicable)Relevant Ministry/Department15–30 working daysTotalComplete registrationMultiple Agencies45–90 working days
Stage 1: Pre-Registration Preparation (7–14 Days)
What documents does a foreigner need to prepare?
Document preparation is the first step before submitting any application. Foreign investors must gather and authenticate the following documents:
For individual foreign investors:
- Valid passport (notarized copy)
- Proof of residential address in the home country
- Bank reference letter from the investor’s home country bank
- Personal tax clearance or financial statement
- Passport-size photographs
- Power of Attorney (if applying through a representative in Nepal)
For foreign corporate investors:
- Certificate of Incorporation of the foreign company
- Memorandum and Articles of Association
- Board Resolution authorizing investment in Nepal
- Audited financial statements of the parent company
- Certificate of Good Standing from the home country
- Tax clearance certificate
All foreign documents must be notarized and apostilled (or legalized through the Nepali Embassy/Consulate in the country of origin). Translated documents must carry a certified Nepali translation.
Stage 2: Foreign Investment Approval from the Department of Industry (15–30 Working Days)
How does a foreigner get foreign investment approval in Nepal?
Foreign investment approval is mandatory under Section 5 of FITTA 2019. A foreign investor must apply to the Department of Industry (DOI) or Investment Board Nepal (IBN) depending on the investment size.
Steps to apply for FDI approval at DOI:
- Submit the application through the online portal at doind.gov.np
- Fill in the prescribed form with details of proposed business, investment amount, and investor information
- Attach all required documents listed above
- Pay the applicable government fee
- Receive the Foreign Investment Approval Letter (also called the approval certificate)
The DOI processes applications within 15 working days under normal circumstances. In practice, additional queries or document clarifications may extend this to 25–30 working days.
For investments exceeding NPR 6 billion or those in priority sectors, the Investment Board Nepal (IBN) handles the approval, and the timeline may extend based on board meeting schedules. Visit ibn.gov.np for details.
Stage 3: Company Incorporation at the Office of Company Registrar (3–7 Working Days)
How does a foreigner incorporate a company at OCR Nepal?
After receiving FDI approval from DOI, the foreign investor proceeds to register the company under the Company Act, 2006. The Office of Company Registrar (OCR) is the competent authority.
Steps for company incorporation at OCR:
- Reserve the proposed company name through the OCR online portal at ocr.gov.np
- Prepare the Memorandum of Association (MOA) and Articles of Association (AOA)
- Submit the registration application online along with:
- FDI approval letter from DOI
- Proposed MOA and AOA
- Passport copies of all shareholders and directors
- Citizenship certificate/passport of Nepali directors (if any)
- Proof of registered office address in Nepal
- Pay the registration fee based on authorized capital
- Receive the Certificate of Incorporation
OCR typically processes and issues the Certificate of Incorporation within 3 to 7 working days after submission of complete documents.
Stage 4: Industry Registration at the Department of Industry (7–15 Working Days)
Is industry registration separate from company registration in Nepal?
Yes. Under the Industrial Enterprises Act, 2020, a company with foreign investment must separately register the industry or enterprise with the Department of Industry. This is distinct from company incorporation at OCR.
The DOI issues an Industry Registration Certificate, which serves as official authorization to operate the specific industry or business. The timeline for this is 7 to 15 working days after submitting the company’s Certificate of Incorporation and other supporting documents.
Stage 5: PAN and VAT Registration at the Inland Revenue Department (1–3 Working Days)
What tax registrations does a foreign company need in Nepal?
Every company registered in Nepal, including foreign-invested companies, must obtain:
- Permanent Account Number (PAN) – mandatory for all businesses under the Income Tax Act, 2002
- Value Added Tax (VAT) Registration – required if annual turnover exceeds NPR 5 million (or immediately for import/export businesses)
Applications are submitted to the Inland Revenue Department (IRD) at ird.gov.np. The IRD processes PAN registration within 1 to 3 working days.
Stage 6: Bank Account Opening (3–7 Working Days)
How does a foreign-invested company open a bank account in Nepal?
A foreign-invested company must open both a foreign currency account and a Nepali Rupee (NPR) account at a licensed commercial bank in Nepal. The foreign currency account is required to receive the initial foreign investment remittance. The bank account opening process requires the Certificate of Incorporation, PAN certificate, FDI approval letter, and identity documents of authorized signatories.
Summary Table: Documents Required at Each Stage
StageKey Documents RequiredFDI Approval (DOI)Passport, financial proof, business plan, company documentsCompany Registration (OCR)FDI approval letter, MOA, AOA, passport copiesIndustry Registration (DOI)Certificate of Incorporation, MOA, AOAPAN/VAT (IRD)Certificate of Incorporation, MOA, company addressBank AccountCertificate of Incorporation, PAN, FDI approval, KYC documents
What Factors Can Delay Foreign Company Registration in Nepal?
Several practical factors can extend the registration timeline beyond 90 days:
- Incomplete or improperly notarized foreign documents
- Proposed business falling under restricted sectors requiring additional clearance
- Requirement for environmental impact assessment (EIA) for certain industries
- Foreign investor not available in Nepal (requiring strong Power of Attorney)
- Additional approval from sector-specific ministries (e.g., tourism, education, finance)
- Queries raised by DOI or OCR requiring supplementary documentation
FAQs: Timeline for Foreigner to Register a Company in Nepal
1. What is the minimum investment required for a foreigner to register a company in Nepal?
Under FITTA 2019 and applicable regulations, foreign investors must meet the prescribed minimum investment thresholds set by the Department of Industry. Investors should confirm the current minimum threshold directly with DOI at doind.gov.np before proceeding.
2. Can a foreigner register a 100% foreign-owned company in Nepal?
Yes. Under FITTA 2019, foreigners can register a 100% wholly foreign-owned company in Nepal, provided the sector is not on the negative list and all statutory requirements under the Company Act, 2006 are met.
3. How long does the entire foreign company registration process take in Nepal?
The complete process takes approximately 45 to 90 working days, covering FDI approval, company incorporation, industry registration, tax registration, and bank account opening. Complex sectors may take longer.
4. Is it mandatory to have a Nepali partner or director to register a company in Nepal?
No. FITTA 2019 does not mandate a Nepali partner for foreign investors in most sectors. However, some sector-specific laws may impose Nepali participation requirements. A Nepali representative is practically useful for handling local compliance.
5. Which government body approves large foreign investments in Nepal?
The Investment Board Nepal (IBN) at ibn.gov.np approves foreign investments above NPR 6 billion or those in infrastructure and priority sectors. The Department of Industry handles approvals for smaller investments.
6. Can a foreign company register a branch office in Nepal instead of a new company?
Yes. Under the Company Act, 2006 and related regulations, a foreign company can register a branch office or liaison office in Nepal. This process also involves OCR registration and DOI approval but follows a separate procedure from full company incorporation.
Conclusion
The timeline for a foreigner to register a company in Nepal spans 45 to 90 working days across multiple agencies. The process begins with foreign investment approval from the Department of Industry under FITTA 2019, followed by company incorporation at OCR under the Company Act 2006, industry registration, tax registration at IRD, and bank account opening. Proper document preparation and legal compliance at every stage determine the actual duration of the process.Add to Conversation
