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Business Permits & Incorporation for Foreigners in Kathmandu

Good to know

Good to Know

  • There is no blanket legal requirement to have a Nepali co-founder or sponsor — most sectors permit 100% foreign ownership — but a prior government investment approval (DOI/IBN) is mandatory before you can even register the company at OCR, so budget time for that step, not just the OCR paperwork itself.
  • If your business is IT/software-focused, you may skip the standard NPR 20 million minimum investment threshold entirely under the automatic approval route — this is a meaningful cost difference versus most other sectors.
  • Timelines quoted online range widely (7–15 days for OCR alone vs. 30–45 days or '1–2 months' for the full FDI-approval-plus-registration process) — plan for the longer end if you're a foreign investor, since the FDI approval stage is usually the bottleneck, not the OCR filing.
  • Fake websites impersonating the Office of the Company Registrar exist — always use the official ocr.gov.np domain.
  • Engaging a Nepal-based corporate lawyer is standard practice for foreign incorporations given the multi-agency sequence (DOI/IBN → OCR → IRD → NRB → Ward Office) and document legalization requirements (notarization/apostille).
  • There is no 'freelancer' or sole-proprietor registration route for foreigners in Nepal — that structure is reserved for Nepali citizens, so any foreigner wanting a formally registered local business must incorporate a private limited company.
  • The standard minimum foreign investment threshold is NPR 20 million (roughly $130,000), but this does not apply to IT companies, which have no minimum — this exception is the realistic route for most solo foreign-owned digital/service businesses.
  • A single foreigner can own 100% of a private limited company as sole shareholder and director in most sectors, so a solo founder doesn't need a local partner in principle — though a local director or advisor is commonly used in practice to smooth compliance.
  • Profit repatriation out of Nepal requires Nepal Rastra Bank approval and is blocked entirely during the first year after the investment is made, so cash-flow planning needs to account for this lock-up.
  • Corporate tax filing deadlines and rates change with each annual Finance Act (usually announced in Nepal's budget speech around May–June), so figures should be reconfirmed with a local accountant or the Inland Revenue Department closer to the time of filing.

Step By Step Process

  • Obtain foreign investment approval
    Step
    1
    Detail
    File an investment application (project profile, financials, parent company documents, source-of-funds proof) with the Department of Industry / Investment Board Nepal under FITTA before any OCR registration can proceed.
    Note
    Since 2023, an automatic online approval route exists for many sectors and investments up to NPR 500 million, which removes the need for prior discretionary bureaucratic approval and speeds this stage up considerably.
  • Reserve company name
    Step
    2
    Detail
    Reserve a unique company name (in English and Nepali) through the OCR's online portal.
    Typical Duration
    1–3 working days
  • Prepare and submit incorporation documents to OCR
    Step
    3
    Detail
    Submit Memorandum of Association (Prabhanda Patra) and Articles of Association (Niyamawali), notarized/apostilled passport copies of foreign founders (or incorporation certificate if the founder is a company), proof of the DOI/IBN investment approval, and registered office address proof.
  • OCR review and issuance of Certificate of Incorporation
    Step
    4
    Detail
    OCR examines the filing for legal compliance; once approved, the registration fee is paid and the Certificate of Incorporation is issued.
  • Tax registration
    Step
    5
    Detail
    Obtain a Permanent Account Number (PAN) — and VAT registration if applicable — from the Inland Revenue Department.
  • Step
    6
    Action
    Open a local bank account and remit capital via Nepal Rastra Bank
    Detail
    Foreign capital must be injected into a local bank account through NRB-approved banking channels before the company can operate; a portion of approved investment must be brought in within set timelines.
  • Local Ward Office registration
    Step
    7
    Detail
    Register the business/office with the local municipal Ward Office for local operating compliance.

Typical Government Fees

  • NPR
  • NPR
  • Branch Office Registration Fee Where Proposed Investment Amount Is Not Fixed
    Branch Office Registration Fee Where Proposed Investment Amount Is Not Fixed
    NPR 100,000
  • FDI/investment Approval Application Itself
    Note
    Described by one legal source as free of charge, requiring only a refundable deposit.

Local Partner Or Sponsor Mandate

Detail
A local Nepali partner or sponsor is not legally mandatory for most sectors — foreigners can wholly own a Nepali subsidiary.
Supporting Fact
The country's policies now allow full foreign ownership in most sectors, according to a summary of FITTA reforms.
Mandatory Local Partner Required
No

Caveats

  • A negative list under FITTA restricts or closes certain sectors (e.g. some primary agriculture, cottage industries, and other 'sensitive' activities) to foreign investors — in those, a local partner/joint-venture structure may effectively be required.
  • Prior government investment approval (DOI or IBN) is mandatory before OCR registration — this is an approval requirement, not a local-ownership requirement.

Business Tax And Structure Options

Filing Obligations

Annual Corporate Return
Due within 3 months of fiscal year end (by end of Ashwin, roughly mid-October)
Fiscal Year
Mid-July to mid-July (Shrawan 1 to Ashadh end, per the Nepali Bikram Sambat calendar)
Pan Registration
A Permanent Account Number (PAN) from the Inland Revenue Department is mandatory before any company can transact or file
Late Filing Penalties
15% annual interest on unpaid tax, plus administrative penalties for non-filing/late filing under the Income Tax Act
Advance Tax Installments
Three installments payable during the fiscal year (Poush, Chaitra, and Ashadh)
Monthly Withholding TDS Return
Due by the 25th of the following month

Corporate Tax Rates

VAT Standard Rate
13%
Standard Rate Most Industries
25%
Source Basis
Nepal Income Tax Act 2058 (2002) as amended by annual Finance Acts; Inland Revenue Department (IRD)
Special Industries Manufacturing Certain Exports
20%
Non Resident Companies With Permanent Establishment
Taxed at the standard 25% on Nepal-sourced income; a Permanent Establishment is triggered when a foreign company provides services in Nepal for more than 90 days within a 365-day period, and PEs face an additional 5% tax on profit repatriated to the parent company
Infrastructure Projects Roads Bridges Tunnels Railways Airports
50% rebate, i.e. roughly 12.5% for the first 10 years of commercial operation
Banks Financial Institutions Insurance Telecom Tobacco Alcohol Petroleum
30%
IT Export And Agro Processing Note
Some sources describe a preferential ~20% rate for IT/agro-processing with an additional export-income rebate; other sources describe a flat 75% rebate on export income for IT exporters bringing the effective rate much lower. Figures vary by source year and should be confirmed with a local accountant before relying on them for planning.

VAT Registration Thresholds

Goods Businesses
NPR 5,000,000
Services Businesses
NPR 2,000,000
Note
Voluntary VAT registration below these thresholds is possible if a business wants to reclaim input VAT.

Structure Comparison Freelancer Vs Company

Private Limited Company Route

Foreign Ownership
Up to 100% equity permitted in most sectors; a short negative list restricts or caps foreign ownership in areas such as personal service businesses (e.g. hairdressing, tailoring), certain cottage industries, real estate trading, personal security services, and arms manufacturing.
Registration Steps
Department of Industry (or Investment Board Nepal for very large investments) approval, then Office of Company Registrar incorporation, then PAN/VAT registration with the Inland Revenue Department, then Nepal Rastra Bank approval to remit and record the foreign capital, then opening a local bank account and infusing the approved capital.
Profit Repatriation
Dividends can be repatriated abroad after Nepal Rastra Bank approval and after deduction of dividend tax; repatriation is not permitted within the first year of investment.
Available To Foreigners
Yes
Single Shareholder Allowed
Yes
Minimum Capital Requirement
NPR 20,000,000

Typical Registration Government Fees

Currency Local
NPR
Amount USD Range
98 to 164
Amount Local Range
15000 to 25000
Note
This covers routine government/registrar fees, stamps, and MOA/AOA drafting for a standard private limited company; separate DOI/FDI approval and NRB capital-remittance steps carry their own fees and are not included in this range.

Sole Proprietorship Freelancer Route

Detail
Only Nepali citizens can register a sole proprietorship in Nepal; foreign nationals cannot use this route and must instead register a company through the Office of Company Registrar with Department of Industry approval under the Foreign Investment and Technology Transfer Act (FITTA) 2019.
Practical Implication
A foreigner who simply invoices overseas clients from Nepal without incorporating has no local formal business registration option — there is no 'freelancer visa/permit' equivalent to a Nepali sole-proprietorship for foreigners. To operate a locally registered business (open a local business bank account, sign local contracts, hire local staff, hold a business visa tied to the entity), a company must be formed.
Available To Foreigners
No

Branch And Liaison Office Alternatives

Branch Office
No minimum capital threshold; typically used by a foreign company executing a specific contract or government agreement in Nepal rather than setting up a locally incorporated subsidiary.
Liaison Office
Requires no separate government approval to establish, but cannot undertake any income-generating or advertising activity — it may only serve as a contact/coordination point for the foreign parent company.

Governing Law

Governing Law

  • Companies Act, 2063 (2006) — governs incorporation, structure, and compliance for all companies
  • Foreign Investment and Technology Transfer Act (FITTA), 2075 (2019) and its Regulations (2077/2021) — governs foreign investment approval, minimum capital, and repatriation
  • Industrial Enterprises Act, 2076 (2019) — sectoral/industry registration

Official Links

Official Links

  • Office of the Company Registrar (incorporation, name search, filings): https://ocr.gov.np/ and https://application.ocr.gov.np/
  • OCR registration process information page: http://www.ocr.gov.np/index.php/en/about-us/87-registration-process-information
  • Nepal Rastra Bank foreign exchange rates/approvals: https://www.nrb.org.np/forex/

Regulatory Bodies

Regulatory Bodies

  • Department of Industry (DOI) / Investment Board Nepal (IBN) — foreign investment approval
  • Office of the Company Registrar (OCR) — company incorporation itself, under the Ministry of Industry, Commerce and Supplies
  • Nepal Rastra Bank (NRB) — approves inbound capital transfer and repatriation
  • Inland Revenue Department (IRD) — PAN/VAT tax registration
  • Local Ward Office — local business registration

Realistic Timeline

Caveat
Foreign-owned entities routinely take longer than domestic-only registrations because FDI approval must be secured before or alongside OCR filing, and delays are common if documents (notarization, apostille, Nepali translations) are incomplete.
Name Reservation
1–3 working days
Ocr Registration Only
Commonly cited as 7–15 working days once documents and approvals are ready
Branch Office Registration
Roughly 2–3 weeks for the OCR portion alone
Full FDI Process Start To Finish
30–45 days per one legal/tax advisory source, though another source estimates 1–2 months for the complete foreign-investment approval plus registration process

Documents Typically Required

Documents Typically Required

  • Notarized/apostilled passport copy of the foreign individual investor (or incorporation certificate + representative's passport if the investor is a company)
  • Memorandum of Association and Articles of Association, prepared in Nepali (per OCR's own guidance) and typically also in English
  • DOI/IBN investment approval letter
  • Joint-venture agreement, if there are multiple investors
  • Financial credibility certificate from a bank in the investor's home country
  • Project proposal / business plan and source-of-funds documentation
  • Registered office address proof in Nepal

Minimum Capital Requirements

IT Software Sector Exception
As of a Ministry of Industry, Commerce and Supplies notice dated 2 October 2023, IT/software companies using the automatic approval route are exempt from any minimum foreign investment threshold.
Domestic Private Company Minimum
NPR 100,000

Minimum authorized capital typically cited for an ordinary (non-FDI) private company; companies below this threshold can register for a nominal NPR 1,000 government fee.

General Foreign Investment Threshold
NPR 20,000,000

Minimum capital that must be invested by each foreign investor to incorporate a company in Nepal, per FITTA 2019 (reduced from a higher original threshold).

Company Structures Available To Foreigners

Company Structures Available To Foreigners

  • Private limited company (wholly-owned subsidiary) — most common route; at least 1 and up to 50 shareholders/founders
  • Public limited company — minimum 7 shareholders, can raise funds from the public
  • Branch office of a foreign company — not a separate legal entity; parent company remains liable
  • Liaison office — non-commercial only (market research, coordination); cannot generate revenue
AI-generated estimateData refreshed July 2026

Sources cited for this category

These are the sources cited in this business permits & incorporation for foreigners research for this city. Individual figures may not each trace to one of them.

  1. 1.ocr.gov.np
  2. 2.nrb.org.np
  3. 3.application.ocr.gov.np
  4. 4.ocr.gov.np

More About Kathmandu

Data last updated July 2026 · Verify anything important.