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Company Registration Process in Nepal

Background

There is different of business vehicles through which the business can be operated in Nepal. Sole proprietorship firm, Partnership firm, Limited liabilities Companies and Local Business (registered at local government i.e., ward office), among these business vehicle limited companies are most common form of business vehicle registered in Nepal.

This article explains detail procedure regarding the registration of limited liabilities company in Nepal.

 

1. Governing law for company registration in Nepal

2. Governing Authority

The office of Company Registrar ("OCR") is the governing authority for the registration of Company in Nepal .

 

3. Classification of Companies in Nepal under Companies Act

Companies Act has classified companies into following categories: 

Company Registration Process in Nepal

 

4. Company Registration Process in Nepal

The company registration process in Nepal is as mentioned:

Company Registration in Nepal

Figure: Steps Explaining the Company Registration Processs in Nepal 

5. Timeline for registration

It will require 7 to 10 days for registration of company in Nepal.

 

6. Documents list required for registration of Company in Nepal

The following documents are required for registration of Company in Nepal:

S.N.Documents
1Application for registration in the standard format
2Memorandum of Association and Article of Association of Nepalese Entity
3Shareholder agreement if any
4Citizenship Certificate/Passport of investor in case of an individual
5Copy of certificate of registration and other registration documents (memorandum of association, articles of association) of corporate entity in case a corporate entity wants to invest in the company
6Resolution of the corporate entity for incorporating entity in case a corporate entity wants to invest in the company
7Copy of prior approval of the Department of Industry ("DOI") in case of investment through a foreign investor

 

7. Differences between the Public & Private Company

The differences between the Public and Private companies are as mentioned:

S.N.SubjectPublic CompanyPrivate Company
1Number of ShareholdersMinimum 7 and maximum any number of sharesMinimum 1 and maximum up to 101
2Number of DirectorMinimum 3 to maximum 11As provided by Article of Association
3Requirement of Independent DirectorAt least 1 director in case of directors not exceeding 7
At least 2 directors in case of directors exceeding 7
No requirement of Independent Director
4Transfer of shareNo consensus required among shareholders for transfer of shareConsensus between shareholders is required for transfer of share
5Invitation to PublicCan invite the public to subscribe to shares and debenturesCannot issue such an invitation
6Name of CompanyName of the company ends with Ltd.Name of the company ends with Pvt. Ltd.
7Company SecretaryPublic Company must appoint a Company SecretaryNot compulsory to appoint the Company Secretary
8Approval while starting businessNeed to take approval from OCR while starting businessNo approval is required
9Minimum Paid-up CapitalMinimum paid-up capital of the company should be Ten Million Nepalese Rupees should be maintained.Not specified by law. In practice, the minimum amount should be NPR 1,00,000.
10Undertaking type of businessBanking transaction, financial transaction, insurance business, stock exchange business, pension fund, or mutual fund business are allowed to be undertaken by public company only.No compulsion requirement on undertaking type of business

 

8. Fee/Tax Required for Company Registration

Office of Company Registrar r has waived the fee for the registration of  new Company  and for increment of the capital of the Company as per the Nepal Budget 2080/81. However the folliowing fee/tax has to be during the registration of company in Nepal is as mentioned:

S.NParticulars
Government Fee        
1.Guarantee amount to be deposited at DOI (In case of investment in Company through foreign investor) NPR 20,000 (Approx. USD)
2.Business Registration at Ward OfficeNPR 5,000 to 15,000 per year (Approx. USD 38 to 115). 
Note: The business registration fees are specific to each local level.
3.House Rent Tax 10% of house rent amount per month
 (Please note house rent rate tax depends on each local level and subject1 to change every fiscal year. As a matter of practice the local government takes 4 to 6 month advance house rent tax during the business registration)

 

9. Post registration compliance

Following are the post registration compliances that a company should do after registration of company in Nepal:

  • a. Receiving the specific license from concerned department (if necessary). Kindly go through para 11 of this article.
  • b. Submission of 3 months compliance document before OCR
  • c.Recording of investment at NRB (in case of FDI Company)
  • d. Submit Annual Compliance Document at OCR
  • e. Compliance with Companies Act, Labor Act, Tax Law and other applicable law of Nepal during the operation of the local subsidiary company.

 

10. Specific business approval

There are some nature of business which need additional approval from the concerned department prescribed by the law even after incorporation of company before their operation. 

S.N.Nature of BusinessInstitution to grant License/Approval
1CollegesAffiliated University
2Insurance CompanyInsurance Board
3Bank and Financial InstitutionNepal Rastra Bank
4Hydro PowerElectricity Development Board
5Travels and TrekMinistry of Tourism, Culture and Civil Aviation
6Food IndustriesDepartment of Food Technology and Quality Control
7Business related to telecommunicationNepal Telecommunication Authority

 

Date of Publication:18 August 2023

 

 

Related Article Link: 
Please click the article published at our law firm website, which are related to the above article topic: 
FDI (Foreign Direct Investment) Approval Process In Nepal
Branch Office Registration Process In Nepal

Liaison Office Registration Process In Nepal 
Registration Of Company Not Distributing Profits In Nepal

 

 

Disclaimer: This article on Company Registration Process in Nepal  is published on our website is just for information purpose only. It shall not be taken as the legal advice, advertisement, personal communication, solicitation or inducement. Bhandari Law and Partners is one of the leading law firm in Nepal and  any of the team members ( Lawyers of Nepal) of the firm shall not be liable for the consequence arising of the information provided. As the factual situation may be different on your case, thereof if you need further legal advice on the subject matter, please Contact Us. 

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