Foreign Company Incorporation in Nepal: Complete 2025 Guide

Last Update- May 14, 2025

Introduction

Nepal has become an increasingly attractive destination for foreign investors, offering strategic location advantages, a growing economy, and progressive FDI policies. This step-by-step guide covers everything you need to know about registering a foreign company in Nepal, including legal requirements, costs, timelines, and compliance.

1. Understanding Foreign Investment Options in Nepal

Nepal offers multiple structures for foreign businesses:

✅ Wholly-Owned Subsidiary – Full foreign ownership allowed in most sectors
✅ Joint Venture – Partnership with local Nepalese investors
✅ Branch Office – Extension of a foreign parent company
✅ Liaison Office – For market research (non-commercial activities)

Key Law: Foreign Investment and Technology Transfer Act (FITTA) 2019 governs foreign investments.

2. Legal Framework for Foreign Businesses

Nepal’s regulatory system includes:

• Companies Act 2063 (2006) – Rules for incorporation & governance

• Industrial Policy 2020 – Sector-specific incentives

• Investment Board Nepal Act – For large-scale projects (> NPR 6B)

Pro Tip: Consult a Nepalese corporate lawyer to navigate overlapping regulations.

3. Eligibility Requirements for Foreign Investors

4. Step-by-Step Registration Process (2024)

1️⃣ Investment Approval – DOI or Investment Board Nepal
2️⃣ Company Name Reservation – Office of Company Registrar (OCR)
3️⃣ Draft MOA & AOA – Must comply with Nepal’s Companies Act
4️⃣ Document Submission – Notarized, translated (if foreign language)
5️⃣ PAN & Tax Registration – Inland Revenue Department
6️⃣ Local Permits – Municipal office & sector-specific licenses

⏳ Total Time: 3-6 months

5. Required Documents Checklist

📄 Certified passport copies of directors/shareholders
📄 Parent company’s Certificate of Incorporation (apostilled)
📄 Board resolution approving Nepal incorporation
📄 Business plan & financial projections
📄 Nepali-translated MOA/AOA

Note: All foreign documents require Nepalese embassy legalization.

6. Costs & Fees Breakdown

💡 Budget extra for translation, notarization, and unexpected delays.

7. Post-Registration Compliance

• Annual filings with Company Registrar

• Tax audits by Nepal-certified auditors

• NRB approval for profit repatriation

• Renewable permits (annual basis)

⚠️ Non-compliance risks fines or license cancellation.

Frequently Asked Questions (FAQs)

1. Can foreigners fully own a company in Nepal?

Yes, except in restricted sectors like media (49% cap) and agriculture.

2. What’s the fastest way to register?

Hiring a local corporate lawyer cuts processing time by ~40%.

3. How are profits taxed?

• 25% corporate tax (standard)

• 5% withholding tax on dividends

4. Is physical presence required?

No, if you appoint a local attorney with Power of Attorney.

5. Can a foreign company buy property?

Only for business operations (not investment) with government approval.

Conclusion & Next Steps

Nepal offers significant opportunities but requires careful navigation of its legal system. For a hassle-free incorporation:

🔹 Verify your sector’s FDI limits
🔹 Prepare documents early (translation/notarization takes weeks)
🔹 Partner with a local law firm for compliance

📞 Need help? [Sunshine law firm and legal Research center] for a free consultation.