Company Registration in Nepal

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 vehicles 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

Companies Act, 2006 (2063) is the law governing company registration process in Nepal. The Act defines a company as a body corporate registered under its provisions, having perpetual succession and a common seal. Companies in Nepal can be established for various purposes, including profit-making ventures, non-profit organizations, or social enterprises.

2.      Governing Authority

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

3.      Classification of Companies in Nepal under Companies Act

Companies Act has classified companies into following categories: 

a)                   Private company

b)                  Public company

c)                   Profit not distributing company

d)                  Foreign Company

4.      Company Registration Process in Nepal

The company registration process in Nepal is mentioned below:

·         Step 1: Reservation of Name of the Company

·         Step 2: Submit documents before OCR

·         Step 3: Documents verification by OCR

·         Step 4: Issuance of Company Registration Certificate

·         Step 5: Tax Registration at Inland Revenue Office (VAT/PAN)

·         Step 6: Business registration at the concerned local government i.e. Ward Office

5.      Timeline for registration

It will require 7 to 10 days for company registration process in Nepal. Depending upon the circumstances the process can be shortened on need basis in 2-3 working days.

6.      Documents list required for registration of Company in Nepal

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

S.N.     Documents Needed

1          Application for registration.

2          Memorandum of Association and Article of Association of the Company

3          Shareholder agreement if any

4          Citizenship Certificate of all shareholders/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 being registered

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.

8          Power of Attorney (if applying through a representative.

9          Prior Approval from relevant government authority (for specific companies).

7.       Company Registration Fee in Nepal

7.1               Government Fee for Registration of Private Company

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.                     1,00,001 to 5,00,000                                        4500

2.                     5,00,001 to 25,00,000                                      9,500

3.                     25,00,001 to 1,00,00,000                                  16,000

4.                     1,00,00,001 to 2,00,00,000                               19,000

5.                     2,00,00,001 to 3,00,00,000                               22,000

6.                     3,00,00,001 to 4,00,00,000                               25,000

7.                     4,00,00,001 to 5,00,00,000                               28,000

8.                     5,00,00,001 to 6,00,00,000                               31,000

9.                     6,00,00,001 to 7,00,00,000                               34,000

10.                   7,00,00,001 to 8,00,00,000                               37,000

11.                   8,00,00,001 to 9,00,00,000                               40,000

12.                   9,00,00,001 to 10,00,00,000                             43,000

13.                   10,00,00,000 and Above                                  30 Per Lakh

7.2. Government Fee for Registration of Public Company

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

7.3. Additional Fee Required for Company Registration

Except the registration fee at OCR there are few additional fees 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                                                                                        NPR 20,000 (Approx. USD 155)

(In case of investment in Company through foreign investor)

2.       Guarantee amount to be deposited at Insurance Authority/Board                                          USD 50,000

(In case of Insurance Broker/Liaison/Branch Company of foreign insurance Company)       

3.       Business Registration at Ward Office                                                                    NPR 15,000 Per Yr (Approx. USD 38 to 115)                                                                                                                   

4.       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)

8.       Post registration compliance

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).

• 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.

SSF Registration of Companies in Nepal

• The Social Security Fund (SSF) is a mandatory social protection scheme for formal sector employees in Nepal. Companies must register with SSF and contribute on behalf of their employees. The process involves:

• Register on the SSF online portal (ssf.gov.np)

• Submit required documents:

• Company registration certificate

• PAN certificate

• List of employees

• Obtain SSF registration number

• Enroll employees in the scheme

• Make monthly contributions (11% from employer, 31% from employee’s salary)

• SSF provides various benefits including medical, accident, and retirement coverage for employees. Compliance with SSF regulations is mandatory for all eligible companies in Nepal.

9.       Specific business approval

There are some specific sectors 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          Telecommunication                                         Nepal Telecommunication Authority

We are available to assist with legal, regulatory, and strategic guidance to help you incorporate/register your business in Nepal.

For further Enquiries Email Us at: sherpalaw.nepal@gmail.com, Phone or What’s App us at: +977 98460-00030.