Introduction to the Registration Process
Registering a liaison office in Nepal involves formal procedures outlined in the Foreign Investment and Technology Transfer Act, 2019 (FITTA), the Companies Act, 2006, and related regulations. The process is designed for foreign companies seeking to establish a non-trading representation to promote their activities without engaging in commercial transactions. The Department of Industry (DoI) is the approving authority that oversees this registration. Each application must comply with prescribed formats, documentation requirements, and conditions set by law. The process includes submission, review, approval, PAN registration, and post-approval formalities.
Who Can Register a Liaison Office
Any foreign company legally incorporated outside Nepal can apply to register a liaison office if it fulfills the following criteria:
- Operated legally for at least two years
- Has a clear intention of promoting its business through non-commercial activities
- Agrees not to engage in trading or revenue-generating functions
- Appoints a local representative or liaison officer
The company must also meet the regulatory and documentation requirements set forth by the DoI and other related agencies.
Initial Preparations Before Registration
Before submitting the application, the company should:
- Identify the objective and scope of the liaison office
- Finalize the physical address for the office in Nepal
- Appoint a local authorized representative
- Translate necessary corporate documents into English or Nepali
- Authenticate and notarize all foreign documents
- Prepare a board resolution authorizing the establishment
This preparation ensures that the registration process proceeds without avoidable delays.
Application Submission Steps
The application process includes:
- Drafting an official application addressed to the Department of Industry
- Compiling all required documents
- Submission of the application physically to the DoI
- Payment of applicable fees
- Review by the DoI officials
- Issuance of approval letter if requirements are met
- Registering for PAN with Inland Revenue Department post-approval
- Setting up a physical office in Nepal
Each step must comply with FITTA and Companies Act requirements.
Documents Needed for the Registration
The following documents are necessary:
- Application letter
- Certificate of incorporation of the parent company
- Memorandum and Articles of Association
- Board resolution to open a liaison office
- Power of attorney for local representative
- Profile of the foreign company
- Tax clearance from the home country
- Lease agreement of the proposed office space in Nepal
- Copy of passport of the authorized representative
- Financial statements of the last two years
All documents must be translated (if not in English or Nepali) and notarized.
Timeline for Application Approval
The average timeline for liaison office registration is 4 to 6 weeks from the date of submission. Document verification may take 2 to 3 weeks. Issuance of the approval letter usually takes another 10 to 15 working days. PAN registration with the Inland Revenue Department takes an additional 3 to 5 working days. Delays can occur if documents are incomplete or require clarification.
Associated Costs in the Registration
Costs include:
- Legal advisory and consultancy charges
- Document translation and notarization fees
- Lease or rental expenses for the office space
- Representative fees or salaries
- Stationery, communication, and setup costs
The estimated total cost ranges between NPR 300,000 to NPR 600,000, based on the complexity of services and location of the office.
Fees Payable to Government Authorities
The fees to be paid to government authorities are:
- Department of Industry registration fee: NPR 15,000–20,000
- Inland Revenue Department PAN registration fee: NPR 100
- Stamp duty and notarization charges vary by document volume
No annual licensing or permit fees are charged for liaison offices unless extended for future years.
Legal Provisions Relevant to the Process
The registration is governed by the following legal frameworks:
- Foreign Investment and Technology Transfer Act, 2019
- Companies Act, 2006
- Industrial Enterprises Act, 2020
- Income Tax Act, 2002 (for PAN registration)
- Labor Act, 2017 (if local staff is employed)
These laws regulate permissions, compliance, and permissible activities.
Department of Industry’s Role
The Department of Industry is responsible for:
- Receiving and evaluating applications
- Verifying submitted documents
- Issuing approval for liaison office setup
- Monitoring compliance with approval terms
- Reviewing annual activity reports for renewal
It is the primary government authority under FITTA for all foreign company representations in Nepal.
Services Permitted After Registration
Post-registration, a liaison office can:
- Act as a communication link between the head office and Nepalese institutions
- Conduct promotional activities for the parent company
- Collect and analyze market data
- Coordinate logistics and non-commercial services
- Organize seminars or business meetings
It cannot generate revenue or sign contracts for profit.
Post-Registration Compliance Requirements
After registration, the liaison office must:
- Obtain a PAN from the Inland Revenue Department
- Maintain proper accounting records
- Submit annual activity reports to the Department of Industry
- Renew the office approval annually
- Notify authorities of any changes to the office, address, or personnel
Failure to comply may lead to penalties or cancellation.
Renewal and Closure Procedure Overview
Renewal requires:
- Application for renewal before expiry
- Updated company profile
- Annual activity report
- Proof of inward remittance from the parent company
Closure requires:
- Notification to the Department of Industry
- Submission of final activity report
- De-registration of PAN
- Settlement of liabilities (if any)
Renewals must be completed annually unless a longer period is granted in the approval.
Registration Rejection Reasons and Remedies
Common reasons for rejection include:
- Incomplete or incorrect documentation
- Parent company not meeting eligibility criteria
- Proposed activities not aligning with FITTA provisions
- Inadequate or ambiguous objective for liaison office
Remedies include:
- Re-submission with correct documents
- Providing clarification or additional documentation
- Legal representation to appeal against rejection
Complete Registration Checklist for Foreign Firms
Before submission, ensure:
- Certificate of incorporation and charter documents are notarized
- Board resolution and POA are properly drafted
- Office lease agreement is signed and valid
- All translations are certified
- PAN registration forms are ready
- Application letter addresses all regulatory requirements
Double-checking this checklist minimizes chances of delay or rejection.
FAQs
How to register a liaison office?
Submit a formal application to the Department of Industry with all required documents and fees.
Who handles the registration process?
The Department of Industry is the approving authority for liaison office registration in Nepal.
What documents are mandatory?
Incorporation certificate, board resolution, POA, financials, and lease agreement are mandatory.
How long does it take?
The process typically takes 4 to 6 weeks from the date of submission.
Is legal help required?
While not mandatory, legal assistance helps in compliance and avoiding delays.
What are the main steps?
Prepare documents, submit application, get approval, obtain PAN, and set up office.
What if the application is denied?
You can reapply with corrections or appeal through legal channels.
Are translations of documents needed?
Yes, documents not in English or Nepali must be translated and notarized.
Is online filing available?
No, registration must be done physically at the Department of Industry.
Do I need a local agent?
Yes, appointing a local authorized representative is mandatory for registration.