Legal Framework for IT Companies
Software businesses in Nepal operate under:
✔ Companies Act, 2063
✔ IT Policy, 2075
✔ Foreign Investment & Technology Transfer Act
Business Registration Options
1. Recommended Structures
| Entity Type | Minimum Capital | Best For |
|---|---|---|
| Private Limited | NPR 100,000 | Most software firms |
| IT Startup | NPR 50,000 | Early-stage companies |
| 100% Foreign-owned | USD 50,000 | International companies |
Special Feature: IT companies enjoy 100% foreign ownership – the only sector with this privilege in Nepal.
Step-by-Step Registration Process
1. Company Name Registration
- Submit 3 name options to Office of Company Registrar (OCR)
- Fee: NPR 300 (valid for 90 days)
- IT-specific names allowed (e.g., “Solutions”, “Technologies”)
2. Document Preparation
Required Documents:
- MOA/AOA (mentioning software development as primary activity)
- Directors’ citizenship/PAN
- Foreign investors: passport copy + NRB approval
- Office address proof (home address acceptable)
3. Registration Submission
- Online: Via OCR Portal
- Fee: NPR 10,000 + NPR 500 per NPR 100,000 capital
- Processing Time: 3-5 working days
Post-Registration Requirements
1. Tax Registrations
| Registration | Authority | Deadline |
|---|---|---|
| PAN | Inland Revenue | 15 days |
| VAT (if turnover > NPR 2M) | IRD | 30 days |
| Software Industry Registration | Ministry of Communication | Optional |
2. Compliance for IT Companies
✔ Annual audit requirement
✔ Employee SSF enrollment
✔ IP protection for software
Special Benefits for IT Companies
Government Incentives
✔ Tax holiday: 5 years for export-focused firms
✔ Duty-free hardware imports
✔ Easy forex facilities for international payments
✔ Special visa quotas for foreign tech experts
IT Park Advantages
Companies in Nepal Innovation Technology Park (NITP) get:
- 10-year tax exemption
- Subsidized high-speed internet
- Ready-to-use office spaces
Essential Operational Licenses
| License | Required For | Issuing Authority |
|---|---|---|
| Data Processing License | Cloud services | MoCIT |
| ISP License | Internet services | NTA |
| PSP Approval | Payment systems | NRB |
FAQs About Software Company Registration
1. Can a foreigner fully own a software company?
→ Yes, 100% ownership allowed (only sector with this benefit)
2. Is physical office mandatory?
→ No, home-based operations permitted initially
3. How to get tax exemption?
→ Register as software exporter with MoCIT
4. What’s the minimum capital for foreign IT companies?
→ USD 50,000 for 100% foreign-owned entities
5. Can software companies hire foreign developers?
→ Yes, under special IT visa quota (max 20% of staff)
Pro Tips for IT Entrepreneurs
✔ Register under IT category for maximum benefits
✔ Protect IP through copyright registration
✔ Use digital signatures for contracts
✔ Join CAN Federation for networking
Need Help? Contact:
- Company Registrar: ☎ 01-5970037
- IT Industry Association: ☎ 01-4424526
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