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This article explains details regarding the registration of liaison office of foreign company in Nepal. The registration of a liaison office in Nepal is governed by the Companies Act, 2006 (2063) (“Companies Act”). Section 154 of Companies Act incorporates the provision related to the registration of liaison office.

Office of Company Register (‘OCR”) is the governing authority to register a liaison office in Nepal.

Unlike the branch office the liaison office is not allowed to undertake any income generating or advertisement activities. The liaison office can only be used as a contact point for the foreign company and other local parties to communicate, coordinate and regulate the relationship.

The liaison office is allowed to:

• a. To work as the point of contact and maintain liaison on behalf of foreign company,
• b. Assist individuals to import and use of foreign companies’ products without taking any remunerations and 
• c. Coordinate with Nepalese Agent if appointed by the foreign company.

Liaison office establishment does not provide the legal status of separate legal personality. It shall be considered as the part of foreign company operating in Nepal.

There is no minimum capital threshold for the investment of liaison office, Companies Act is silent for the same. Generally, the foreign companies inject the investment amount considering the operation cost. 

Following steps are followed for liaison office registration: 

Kindly Note:  As a matter of practice separate approval from the government authority shall not be required for registration of liaison office. 

The timeline for registration of a liaison office in Nepal is usually 2 to 3 weeks. 

Following are the documents required for liaison office registration: 

Government fee of the registration of the liaison office that need to be paid before OCR is NPR. 50,000.

Following are the post compliance requirement of liaison office in Nepal:

• a. Submit 3-month compliance document before OCR;
• b. Appoint Auditor to prepare annual financial statement (audit report) of liaison office;
• c. Submit the financial statement at OCR within 6 months of completion of each fiscal year;
• d. Submit the financial statement to its head office within 3 months from its preparation date and
• e. Update document at OCR in case there is change in name and address of the foreign company. 

Note:Liaison office has obligation to perform the compliances applicable pursuant to prevailing Nepalese law including Labor Law, Social Security Law, Tax Law etc. during the process of its operation in Nepal. 

• a. Unlike branch office, liaison office is not allowed to do any income earning activities in Nepal. The liaison office can only be used as a contact point for the foreign company and other local parties to communicate, coordinate and regulate the relationship;
• b. As a matter of practice unlike branch office liaison office are not required to take any approval from the concerned authority for establishment;
• c.  Activities such as entering into a contract for transaction and marketing and advertisement of product of the company is restricted for liaison office.

For more details regarding the registration of the branch office in Nepal please visit the article published at our law firm website.  Link:  Branch Office Registration in Nepal

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: 

Company Registration Process in Nepal
Branch Office Registration Process In Nepal
ESTABLISHMENT OF BUSINESS IN NEPAL BY FOREIGN INVESTORS

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