Share Transfer Process in Nepal

Legal Framework for Share Transfers

Share transfers in Nepal are governed by:
✔ Companies Act, 2063 (2006)
✔ Securities Act, 2063 (2007) for public companies
✔ Company’s Articles of Association

Types of Share Transfers

1. Private Company Share Transfer

Method	Process	Timeframe
Private Agreement	Between existing shareholders/third parties	7-15 days
Right of First Refusal	Existing shareholders get priority	10-20 days

2. Public Company Share Transfer

Method	Process	Timeframe
Stock Exchange	Through NEPSE trading system	T+2 days
Off-Market	For bulk/block transfers	7-10 days

Step-by-Step Transfer Process

1. Document Preparation

Document	Requirement
Share Transfer Deed	Stamp duty paid (0.5% of value)
Board Resolution	Approving the transfer
Share Certificate	Original with transfer form
PAN of Transferee	Mandatory for registration

2. Approval Process

Seller submits transfer request
Company board approves (within 15 days)
Share registrar updates records
New certificate issued to buyer

3. Registration & Fees

Action	Fee (NPR)	Authority
Stamp Duty	0.5% of transaction value	IRD
Share Registrar Fee	500-2,000	Company/Registrar
Capital Gains Tax	5-10% (for profitable sales)	IRD

Special Cases

Restricted Transfers

✔ Lock-in periods for promoters (1-3 years)
✔ NRB approval required for foreign investors
✔ Court approval for disputed shares

Transmission of Shares

Inheritance: Requires succession certificate
Court Order: For legal transfers

Post-Transfer Compliance

Mandatory Updates

✔ Company register within 15 days
✔ SEBON/NEPSE (for listed companies)
✔ Bank records for dividend payments

FAQs About Share Transfers

1. Can shares be transferred without board approval?

→ No, board must approve within 15 days

2. Is notarization required for transfer deed?

→ No, but recommended for high-value transactions

3. How to transfer inherited shares?

→ Submit succession certificate to company

4. What’s the tax on share transfers?

→ 5% CGT (individuals), 10% (companies)

5. Can foreigners buy shares in Nepali companies?

→ Yes, but sector limits apply (max 80% in most sectors)

Pro Tips for Smooth Transfer

✔ Verify share encumbrances before purchase
✔ Obtain NOC from financiers if shares pledged
✔ Use registered brokers for public company shares
✔ File capital gains tax within 3 months

Need Help? Contact:

Office of Company Registrar: ☎ 01-5970037
NEPSE Helpdesk: ☎ 01-4266091

💡 Transfer ownership smoothly with proper legal compliance! 📈