MedhaCorpLaw, a leading law firm in Nepal specializing in corporate and non-profit legal services, this article explains the full legal procedure for registering a non-profit organization in Nepal. This guide outlines each step and legal requirement based on the Association Registration Act, 2034 B.S., Social Welfare Council Act, 2049 B.S., and other applicable regulations.
Introduction to Setting Up Non-Profits
A non-profit organization (NPO) in Nepal is formed for public welfare without a profit motive. It operates in areas such as education, health, environment, and social justice. Under Nepali law, a non-profit must have at least seven founding members and a defined objective aligned with community welfare. Once registered, it gains a legal identity, becomes eligible for funding, and is allowed to conduct its operations lawfully within Nepal. Registration is processed through the District Administration Office (DAO) of the organization’s location.
Nepalese Laws on Non-Profit Registration
Non-profit organizations in Nepal are governed by the following primary laws:
- Association Registration Act, 2034 B.S. – Establishes procedures for registration
- Social Welfare Council Act, 2049 B.S. – Monitors NGOs receiving foreign aid
- Income Tax Act, 2058 B.S. – Applies to taxation and exemption criteria
According to Section 4 of the Association Registration Act, organizations must register with the DAO to gain legal recognition. Additional approvals may be required from the Social Welfare Council (SWC) for international affiliations or funding.
Choosing the Right Non-Profit Type
Several types of non-profits can be registered in Nepal, depending on scope and purpose:
- Non-Governmental Organizations (NGOs)
- Clubs and community-based associations
- Foundations and forums
- Federations or umbrella organizations
The selection depends on whether the entity will work locally, regionally, or nationally. NGOs are the most common form and are typically registered at the district level. If the organization receives foreign funding, it must register additionally with the SWC.
Minimum Requirements for Registration
To register a non-profit in Nepal, the following minimum criteria must be met:
- Seven Nepali citizens as founding members
- All members must be at least 18 years old
- Members must have valid citizenship certificates
- The organization must have non-commercial objectives
- A registered office address must be provided
These criteria are enforced by the DAO during the registration review process. Foreign nationals cannot be founding members but can participate after registration in advisory roles.
Preparing a Constitution and Objectives
The constitution is the core legal document for any non-profit in Nepal. It must include:
- Name and address of the organization
- Objectives and areas of work
- Membership structure and general assembly rules
- Roles and powers of the executive committee
- Details about meetings, quorum, and decision-making
- Provisions on financial management
- Amendment and dissolution procedures
This document must be written in Nepali and signed by all founding members. It must be legally sound and aligned with the Association Registration Act.
Document Checklist Before Application
Applicants must prepare the following documents before filing for registration:
- Completed application form in prescribed format
- Finalized constitution of the organization
- Copies of citizenship certificates of all members
- Minutes of the founding meeting, signed by attendees
- Recent passport-sized photographs of each member
- Office rental or ownership agreement
- Location map of the office
- Letter of recommendation from local ward office (if needed)
- Copy of PAN registration (if already obtained)
- Tax clearance certificate of the office (if applicable)
All documents must be clear, consistent, and submitted in Nepali or translated versions.
Steps for Registering with District Office
To register a non-profit organization at the District Administration Office:
- Hold a founding meeting with at least seven members.
- Finalize and sign the organization’s constitution.
- Prepare the required documents listed above.
- Submit the documents to the DAO of the organization’s district.
- DAO reviews and may request corrections or additions.
- Upon approval, the registration certificate is issued.
- Apply for a Permanent Account Number (PAN) with the Inland Revenue Office.
- If applicable, register with the Social Welfare Council for foreign aid eligibility.
Duration and Processing of Application
The entire registration process generally takes between 2 to 3 weeks, depending on document accuracy and the processing speed of the DAO:
- Document preparation: 3–5 working days
- DAO review and processing: 10–15 working days
- PAN registration: 1–3 days
Delays may occur if documents are incomplete or constitution clauses require clarification.
Role of Ministry and Local Authorities
While the DAO is the primary registration authority, the following government bodies also play roles:
- Ministry of Home Affairs – Supervises DAOs across the country
- Social Welfare Council (SWC) – Regulates NGOs receiving foreign assistance
- Inland Revenue Department (IRD) – Manages tax and PAN registration
- Ward Office or Municipality – May verify office address and location
These authorities ensure the organization is lawful, well-documented, and accountable.
Registration and Administrative Costs
Typical costs involved in registering a non-profit in Nepal include:
- DAO registration fee: NPR 1,000 to NPR 5,000
- Legal document preparation: NPR 2,000 to NPR 5,000
- PAN application: Free of charge
- SWC registration fee (if applicable): Varies depending on organization scope
Additional administrative costs may include notarization, photocopying, and translation services.
Post-Registration Legal Formalities
After receiving the registration certificate, the organization must:
- Apply for PAN registration
- Open an official bank account
- Maintain a register of members and meeting records
- Conduct Annual General Meetings (AGMs)
- Submit audit reports to the DAO and SWC (if foreign aid involved)
- Notify the DAO of any amendments to the constitution or board members
These steps are required to maintain active legal status.
Renewal and Amendment Requirements
Non-profit organizations must renew their registration every year through the DAO. Renewal requires:
- Most recent audited financial report
- Activity report of the past year
- A written application for renewal
To amend the constitution or board structure, the organization must:
- Conduct a formal board meeting
- Prepare minutes outlining proposed changes
- Submit the changes to the DAO with a cover letter and resolution
Failure to renew may lead to suspension of legal status.
Legal Penalties for Non-Compliance
Failure to comply with the legal obligations can result in penalties, including:
- Cancellation of registration
- Fines as prescribed under the Association Registration Act
- Ineligibility for foreign or government funding
- Suspension of banking and financial privileges
- Potential criminal liability for misuse of funds or fraudulent reporting
All non-profits must strictly follow their constitution and national laws.
Benefits of Hiring a Legal Consultant
Hiring a legal consultant such as MedhaCorpLaw can provide:
- Accurate constitution drafting
- Preparation and review of documents
- Timely submissions to the DAO and SWC
- Assistance with foreign aid documentation
- Legal advice for renewals, amendments, and compliance
Professional legal services can reduce delays and errors and ensure smooth registration.
Final Checklist for Registration Success
Before submission, ensure the following checklist is completed:
- Seven members with valid citizenship
- Signed constitution with all required clauses
- Founding meeting minutes and decisions
- Completed DAO application form
- Photographs of all members
- Valid office lease or ownership papers
- PAN application prepared or submitted
- All documents are in Nepali or translated
- Additional SWC documents if foreign aid is involved
- Budget for administrative costs is allocated
FAQs
Can a foreigner start a non-profit here?
No. Foreigners cannot register a non-profit directly but may collaborate with a registered Nepali NGO.
Where do I submit the registration form?
The registration form must be submitted to the District Administration Office in your district.
What’s the minimum member requirement?
You must have at least seven Nepali citizens as founding members.
Are there government-provided templates?
Some DAOs provide sample constitution formats, but custom drafting is recommended.
Is legal assistance mandatory in Nepal?
It is not mandatory, but legal support ensures correctness and timely approval.
How do I renew my registration?
Submit your audit report, activity report, and renewal application annually to the DAO.
What are the fees for renewal or changes?
Renewal typically costs NPR 1,000 to NPR 2,000. Amendment fees vary by district.
Can I change the name post-registration?
Yes, but it requires an amendment through the DAO and formal resolution.
What happens if rules are not followed?
Non-compliance may lead to fines, deregistration, or legal action.
Can one person run a non-profit alone?
No. At least seven Nepali citizens are legally required to register a non-profit.
MedhaCorpLaw continues to assist individuals and groups with full support for non-profit registration, legal compliance, and advisory services throughout Nepal.