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.

 

Companies Act, 2006 (2063) is the law governing  company registration process in Nepal .

 

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

 

Companies Act has classified companies into following categories: 

 

The company registration process in Nepal is mentioned below:

• Step 1: Reservation of Name of the company by the applicant

• Step 2: Submit documents before OCR

• Step 3: Documents verification by OCR

• Step 4: Approval of Company Registartion

• Step 5: Tax Registration at Inland Revenue Office

• Step 6: Business registration at the concerned local goverment i.e. ward office

 

Figure: Steps Explaining the Company Registration Processs in Nepal 

 

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

 

The following documents are required for company registration process in Nepal .

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

 

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

S.N.	Subject	Public Company	Private Company
1	Number of Shareholders	Minimum 7 and maximum any number of shares	Minimum 1 and maximum up to 101
2	Number of Director	Minimum 3 to maximum 11	As provided by Article of Association
3	Requirement of Independent Director	At 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
4	Transfer of share	No consensus required among shareholders for transfer of share	Consensus between shareholders is required for transfer of share
5	Invitation to Public	Can invite the public to subscribe to shares and debentures	Cannot issue such an invitation
6	Name of Company	Name of the company ends with Ltd.	Name of the company ends with Pvt. Ltd.
7	Company Secretary	Public Company must appoint a Company Secretary	Not compulsory to appoint the Company Secretary
8	Approval while starting business	Need to take approval from OCR while starting business	No approval is required
9	Minimum Paid-up Capital	Minimum 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.
10	Undertaking type of business	Banking 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

 

8.1. Government Fee for Private Company Registration

 

The government fee that is required to be paid for registration of private company at Office of Company Registrar is as mentioned:

 

S.N.	Amount of Authorized Capital (in NRs.)	Registration Fee (in NRs.)
1	5,00,001 to 25,00,000	9,500
2	25,00,001 to 1,00,00,000	16,000
3	1,00,00,001 to 2,00,00,000	19,000
4	2,00,00,001 to 3,00,00,000	22,000
5	3,00,00,001 to 4,00,00,000	25,000
6	4,00,00,001 to 5,00,00,000	28,000
7	5,00,00,001 to 6,00,00,000	31,000
8	6,00,00,001 to 7,00,00,000	34,000
9	7,00,00,001 to 8,00,00,000	37,000
10	8,00,00,001 to 9,00,00,000	40,000
11	9,00,00,001 to 10,00,00,000	43,000
12	10,00,00,000	30 Per Lakh

 

8.2. Government Fee for Public Company Registration

 

The government fee that is required to be paid for registration of public company at Office of Company Registrar is as mentioned:

S.N.	Amount of Authorized Capital (in NRs.)	Registration Fee (in NRs.)
1	Up to 1,00,00,000	15,000
2	1,00,00,001 to 10,00,00,000	40,000
3	10,00,00,001 to 20,00,00,000	70,000
4	20,00,00,001 to 30,00,00,000	1,00,000
5	30,00,00,001 to 40,00,00,000	1,30,000
6	40,00,00,001 to 50,00,00,000	1,60,000
7	Above 50,00,00,000	3000 Per Lakh

 

8.3 Additional Fee Required for Company Registration

Except the registration fee at OCR there are few additional fee that need to be paid for registration of company in Nepal is as mentioned: 

S.N.	Particulars	Government Fee
1	Guarantee amount to be deposited at DOI (In case of investment in Company through foreign investor)	NPR 20,000 (Approx. USD 155)
2	Business Registration at Ward Office	NPR 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 subject 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)

 

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

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

 

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 Business	Institution to grant License/Approval
1	Colleges	Affiliated University
2	Insurance Company	Insurance Board
3	Bank and Financial Institution	Nepal Rastra Bank
4	Hydro Power	Electricity Development Board
5	Travels and Trek	Ministry of Tourism, Culture and Civil Aviation
6	Food Industries	Department of Food Technology and Quality Control
7	Business related to telecommunication	Nepal Telecommunication Authority

 

Date of Publication:18 August 2023

 

 

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