Industry Registration Process in Nepal

Introduction to Industry Registration in Nepal

Industry registration in Nepal is a mandatory legal procedure governed primarily by the Industrial Enterprises Act, 2076 (2019). This registration applies to all industrial activities within Nepal, including manufacturing, production, processing, and service-based industries. It is overseen by the Department of Industry (DOI) under the Ministry of Industry, Commerce and Supplies.

Registering an industry provides legal identity to a business, enabling it to operate lawfully, access financial services, apply for tax registration, and participate in public procurement or international trade. Unregistered industries are subject to penalties and can be shut down by enforcement authorities.

Why Industry Registration Is Legally Required

Under the Industrial Enterprises Act, 2076, no person or entity can operate an industry without proper registration. Industry registration ensures compliance with industrial, environmental, and tax laws.

Legal registration:

• Confirms the industry’s existence and legal status.
• Enables tax registration, such as PAN and VAT.
• Helps in obtaining necessary operation permits and licenses.
• Allows access to government subsidies and export-import incentives.
• Ensures compliance with labor, safety, and zoning regulations.

Operating an unregistered industry violates Nepalese law and can result in fines, closure of operations, and legal prosecution.

Types of Industries That Must Be Registered

Industries in Nepal are categorized based on investment, nature, and size. According to Schedule 1 of the Industrial Enterprises Act, 2076, all of the following must register:

• Cottage Industry
• Small Industry
• Medium Industry
• Large Industry
• Manufacturing Industry
• Service-Based Industry
• Agro-Based Industry
• Tourism and Hospitality Industry
• Technology-Based Industry
• Foreign Investment Industry
• Energy and Hydropower Industry

Each type of industry follows a similar process but may have different documentation, regulatory oversight, and compliance obligations depending on the industry’s nature and risk level.

Eligibility Criteria to Register an Industry

The eligibility for industry registration in Nepal is defined by legal identity and investment structure. The applicant can be an individual, firm, partnership, company, cooperative, or foreign investor.

Basic eligibility criteria include:

• The applicant must be a Nepali citizen, entity, or a foreign investor with permission from relevant authorities.
• The business must fall within permissible categories outlined in the Industrial Enterprises Act, 2076.
• The proposed business activity must not conflict with Nepalese law, public security, or environmental standards.
• The industry must have a registered business address in Nepal.

In case of foreign investment, the investor must secure approval from the Foreign Investment and Technology Transfer Act (FITTA), 2075.

Required Documents for Industry Registration

Proper documentation is essential for successful industry registration. All documents must be accurate, complete, and submitted in the prescribed format.

Commonly required documents include:

• Application form (available at DOI or online portal).
• Citizenship certificate or passport (for foreign nationals).
• Company registration certificate (for companies).
• Partnership agreement or Memorandum of Association and Articles of Association.
• PAN registration document (if already obtained).
• Feasibility study report or business plan.
• Land ownership certificate or lease agreement.
• Environmental clearance (if applicable).
• Power of attorney (if filed by an agent).
• Passport-sized photographs of the applicant.

Additional documents may be required based on industry type, such as environmental impact assessment or technology transfer agreement.

Step-by-Step Industry Registration Procedure

The industry registration process in Nepal involves several administrative steps. The process can be completed physically or through the online portal of the Department of Industry.

Registration steps include:

1. Preparation of necessary documents.
2. Filling out the prescribed application form.
3. Submission to the Department of Industry (DOI) or concerned authority.
4. Review and verification of documents.
5. Field inspection or additional clarification (if applicable).
6. Issuance of industry registration certificate.
7. Registration for PAN at Inland Revenue Department.
8. Further registrations if required (environmental, labor, etc.).

For cottage and small industries, registration may also be carried out at the District Cottage and Small Industry Office.

Estimated Timeframe for Registration Completion

The industry registration process typically takes 7 to 15 working days if all documents are correctly submitted. For medium and large-scale industries, the timeframe may extend due to additional inspections, legal scrutiny, and environmental assessments.

Typical processing durations:

• Cottage/Small Industry: 3–7 days
• Medium Industry: 10–15 days
• Large Industry: 15–30 days

Delays may occur if documents are incomplete or if regulatory authorities require additional verifications.

Government Fees and Associated Costs

Industry registration involves various fees, determined by the type and size of the industry. The fee structure is defined by the Department of Industry and may be revised through government notices.

Common costs include:

• Registration fees (ranges from NPR 1,000 to NPR 30,000).
• Stamp duties.
• Service charges by legal professionals or agents.
• Notarization charges for legal documents.
• Environmental clearance and local government charges (if applicable).

There are no hidden charges if the application is handled directly with government offices.

Key Laws Governing Industry Registration

The legal basis for industry registration in Nepal is provided through several acts and regulations. Understanding the applicable laws ensures compliance during and after registration.

Relevant laws include:

• Industrial Enterprises Act, 2076
• Companies Act, 2063 (for companies)
• Foreign Investment and Technology Transfer Act, 2075
• Environment Protection Act, 2076
• Value Added Tax Act, 2052
• Income Tax Act, 2058

These laws guide how industries are formed, operated, monitored, and penalized in case of violations.

Relevant Government Authorities Involved

Multiple government bodies are involved in the industry registration process depending on the nature and size of the industry.

Key authorities include:

• Department of Industry (DOI) – Primary registration authority.
• Office of the Company Registrar – For company formation.
• Ministry of Industry, Commerce and Supplies – Oversight body.
• District Cottage and Small Industry Offices – For small-scale industries.
• Inland Revenue Department – For PAN and tax registration.
• Department of Environment – For EIA or environmental approval.

Each authority may have jurisdiction over different stages of the process.

Online and In-Person Registration Options

Industry registration in Nepal can be done online or in-person, depending on the applicant’s preference and infrastructure availability.

Online registration:

• Available at doind.gov.np
• Requires login credentials and digital submission of documents.

In-person registration:

• Carried out at the Department of Industry or District Industry Offices.
• Physical document submission and verification.

Both methods require the same supporting documents and are legally recognized.

Common Mistakes and How to Avoid Them

Several applicants face rejection or delays due to common errors. Being cautious can prevent costly setbacks.

Common mistakes include:

• Submission of incomplete or outdated documents.
• Mismatched information across submitted documents.
• Omission of environmental or land-related approvals.
• Not following the prescribed format for application.
• Submitting applications to the wrong authority.

Applicants are advised to thoroughly review requirements or seek professional help.

Industry Registration Compliance Checklist

A detailed checklist helps ensure nothing is missed during the registration process.

Compliance checklist:

• Business type is within permitted categories.
• All documents are complete and verified.
• Appropriate registration fee is paid.
• Environmental and zoning clearances are secured.
• Tax registration (PAN) is completed.
• Application is submitted to the correct authority.
• Power of attorney is included (if applicable).

This checklist minimizes the chance of rejections.

Post-Registration Legal Obligations

After receiving the industry registration certificate, the applicant must comply with additional legal obligations.

Obligations include:

• PAN and VAT registration at the Inland Revenue Department.
• Labor law compliance, including social security registration.
• Environmental obligations if required by law.
• Periodic reporting to the Department of Industry.
• Renewal of licenses, if applicable.
• Compliance with local municipal regulations.

Failure to meet these obligations may lead to fines or suspension of operations.

Legal Assistance and Professional Services

Many individuals and companies opt for legal and consulting services for efficient and error-free registration.

Services offered include:

• Document preparation and verification.
• Legal opinion on eligibility and regulatory compliance.
• Submission of application on behalf of clients.
• Representation before government authorities.
• Post-registration compliance services.
• Support in obtaining PAN, VAT, and labor registrations.

Engaging legal professionals can ensure adherence to all procedural and legal requirements.

 

Frequently Asked Questions (FAQs)

 

Who must register an industry in Nepal?

All individuals or entities intending to operate industrial activities, whether small or large, must register according to the Industrial Enterprises Act.

What documents are needed to register?

Key documents include a citizenship certificate, business plan, land lease or ownership paper, and company registration papers if applicable.

How long does registration usually take?

The average processing time ranges from 7 to 15 working days, depending on the completeness of the application and industry type.

Can I register my industry online?

Yes, industries can be registered through the Department of Industry’s online portal by submitting the required documents digitally.

How much does industry registration cost?

Costs vary by industry type and size, ranging from NPR 1,000 to NPR 30,000 in government fees, excluding professional services.

Is it mandatory for all businesses?

Yes, industrial activities must be registered by law. This includes manufacturing and certain service-based industries.

Where do I file my application?

Applications are filed either at the Department of Industry in Kathmandu or the relevant District Industry Office, depending on the industry size.

Can foreigners register industries too?

Yes, but they must comply with FITTA 2075 and obtain approval for foreign investment from the Department of Industry.

What if I don’t register my industry?

Unregistered industries are illegal and may face penalties, closures, and legal action by the government of Nepal.

Do I need a lawyer for registration?

A lawyer is not mandatory but highly recommended for ensuring accuracy, legal compliance, and smooth processing of the application.