Registration of Repackaging Company in Nepal

1. Introduction to Repackaging Business in Nepal

A repackaging company in Nepal acquires bulk goods from manufacturers or distributors, repackages them into smaller retail or consumer units, and markets under own label or third-party labels. The business adds value through custom packaging, branding, labeling, and distribution. Many sectors use repackaging—food, pharmaceuticals, cosmetics, agricultural inputs, chemicals. Due to public health, consumer protection, and trade regulation, repackaging carries legal oversight. Entrepreneurs must ensure compliance with company law, food and drug regulation, industrial policy, environment laws, trademark, and taxation. The registration process secures legal operating status, access to bank accounts, regulatory licenses, and brand protection. Medha Law and Partners Is a leading Law firm in Nepal.

2. Legal Basis for Repackaging Business in Nepal

Repackaging enterprises in Nepal must comply with several legal statutes:

Companies Act, 2006 (2053 B.S.): governs incorporation, share capital, directors, and operations.
Industrial Enterprises Act, 2076 (2019): covers industrial registration, licensing, incentives.
Food Act, 2028 (1971 B.S.) and Food Regulations, 2036 (1979 B.S.): regulate food safety, labeling, repackaging of food items.
Drugs Act, 2035 (1979 B.S.) and Drugs (Registration and Marketing) Regulations, 2043 B.S.: apply when repackaging medicines or pharmaceutical raw inputs.
Environment Protection Act, 2019 and Environment Protection Rules, 2020: relevant when industrial processes generate waste or pollutants.
Trademark Act, 1965: for registering brand and label marks to prevent infringement.
Income Tax Act, 2058 (2002 B.S.) and Value Added Tax (VAT) Act, 2052 (1996 B.S.): for taxation of business.
These laws provide authority and restriction over repackaging operations, safety standards, labelling, environmental compliance, and corporate governance.

3. Eligibility Criteria

To register a repackaging company, the prospective business must satisfy:

A minimum of two promoters or shareholders for a private limited company (Companies Act, 2006).
Nepal citizenship (Nepali individual or a foreign investor per Foreign Investment and Technology Transfer Act, 2019).
Adequate capital investment according to business scale and licensure requirements.
Suitable business premises meeting health, safety, and industrial standard.
Compliance with zone and land use regulation (industrial zone or permitted commercial area).
If repackaging food, pharmaceuticals, chemicals, or hazardous material, additional technical qualifications (food technologist, pharmacist) and infrastructure (labelling room, quality lab) may be mandatory.

4. Business Structure Selection

Choice of legal form affects liability, registration, compliance, and tax burden:

Private Limited Company: most common for repackaging business. Limited liability, separate legal entity, ability to raise capital.
Public Limited Company: for large scale operations seeking public investment.
Partnership: simpler, but partners carry unlimited liability.
Sole Proprietorship: not ideal for repackaging, limited liability, harder to scale, cannot separate personal and business assets.
Medha Law & Partners generally advises forming a private limited company to balance liability protection and regulatory flexibility.

5. Step-by-Step Process for Registration

Below is a stepwise process:

Choose company name and check availability at the Office of the Company Registrar (OCR).
Prepare Memorandum of Association (MoA) and Articles of Association (AoA).
Submit incorporation application with OCR, along with required documents.
Obtain Company Registration Certificate from OCR.
Register for Permanent Account Number (PAN) with Inland Revenue Department.
Register for Value Added Tax (VAT) if sales exceed threshold.
Register with Social Security Fund / Labor Office as employer.
Apply for industrial registration or factory license under Industrial Enterprises Act.
Apply for trade license from local municipality or metropolitan city.
Apply for sectoral licenses:

Food license from Food Authority for food repackaging
Drug license from Department of Drug Administration for pharmaceuticals
Hazardous waste permit under Environment Act

Apply for trademark registration under Trademark Act.
Open bank account in company name.

Each step may require supporting documents and clearances from multiple agencies.

6. Documents Required

Some commonly required documents include:

Application forms prescribed by OCR
Copy of citizenship certificate or citizenship document of promoters
Passport/visa for foreign investors
MoA and AoA
Address proof of business premises (lease agreement or title deed)
Site map and floor plan certified by engineer/architect
Tax clearance or letter of non-objection (if applicable)
Bank deposit confirmation for initial paid-up capital
Declaration of director consent
Passport size photos of promoters and directors
Certificate of incorporation (if foreign promoter or parent company)
For food repackaging: quality test report, lab facility certificate, HACCP or ISO certificate (if available)
For environment compliance: environmental impact assessment (EIA) or Initial Environmental Examination (IEE) approval
Technical qualifications (food technologist, pharmacist) as required

Medha Law & Partners assists clients in gathering, verifying, and compiling these documents to satisfy regulatory standards.

7. Application to Office of Company Registrar

Once documents are assembled:

Submit application to the OCR with prescribed fee.
The OCR conducts name verification, reviews MoA/AoA, checks compliance with incorporation norms.
If satisfied, OCR issues a Certificate of Incorporation.
The company may then commence business subject to sectoral licenses.
Processing time typically ranges from 7 to 14 working days, depending on completeness and workload at OCR.

8. Industrial Registration and Factory Licensing

Under the Industrial Enterprises Act, 2076:

A repackaging facility qualifies as an industrial enterprise if it undertakes processing or packaging activity.
The company must apply to the Department of Industry for industrial registration.
For facilities above thresholds or emitting pollutants, factory license may be mandatory from the local or central authority.
Submit application, site plan, machinery list, pollution control plan, safety plan.
After verification and inspection, license is granted.
This registration enables eligibility for incentives under Nepal’s industrial policy.

9. Trade License from Local Authority

To operate within a municipality or metropolitan city:

Apply to the municipal trade license department.
Provide business address, nature of business, owner details, building certificate, and safety clearance.
Pay trade license fee as per local schedule.
Authorities may inspect premises for hygiene, safety, signage, fire clearance.
The trade license typically must be renewed annually.

10. Sectoral Licenses (Food, Drug, Environment)

Food License

Food Act, 2028 requires registration or license from Nepal Food Authority (NFA) for repackaging edible goods.
Submit application, lab test report, food safety system documentation, hygiene certification, packaging material details.
NFA inspects facility, checks labeling compliance, sampling, and issues license.

Drug License

If repackaging pharmaceuticals or APIs, apply to Department of Drug Administration (DDA) under Drugs Act, 2035.
Submit application, technical staff credentials, premises layout, cleanroom plan, SOPs.
DDA inspects lab facility, validates standard operating procedures, and grants license.

Environmental Permit

Under Environment Protection Act, 2019, submit EIA or IEE to the relevant Environment Protection Authority (EPA) or provincial environment body.
Provide waste management plan, emissions control design, safety measures.
After review and site inspection, environment permit is granted.
These sectoral licenses ensure public safety, product quality, and environmental protection.

11. Trademark and Label Protection

A repackaging company must secure brand recognition and legal protection:

Apply to the Department of Industry under the Trademark Act, 1965.
Submit application, logo/mark design, specification of goods, class of goods.
Office examines possibility of conflict with existing marks, conducts opposition period.
After registration, trademark owner has exclusive rights to use the mark on repackaged goods.
Labeling requirements (Food Regulations, Drugs Regulations) must legally state ingredients, weight, manufacturer/distributor address, batch number, expiry date.

12. Tax and Fiscal Registration

After company registration:

Permanent Account Number (PAN): Register with Inland Revenue Department for tax identification.
Value Added Tax (VAT): If the company’s annual turnover exceeds prescribed threshold (currently NPR 5 million or per law), register as VAT payer.
Withholding tax and advance payment: Comply with withholding obligations on salaries, vendor payments.
Tax audit and return filing: File annual income tax returns and VAT returns as per deadlines.
Customs duty and excise: If importing raw materials or appliances, obtain necessary customs clearances and pay duties.
Legal compliance avoids penalties and ensures smooth operation.

13. Timeline and Costs Involved

Typical timeline:

Name approval and company incorporation: 7–14 days
Industrial registration / factory licensing: 14–30 days
Trade license: 3–7 days
Sectoral license (food, drug, environment): 14–60 days (depending on complexity and inspections)
Trademark registration: 90–180 days (with opposition period)

Cost factors include:

OCR incorporation fee
Legal drafting and consultant fee
Agent service charges
Industrial license and inspection fee
Trade license and municipal fees
Sectoral license application and inspection fee
EIA / environmental study cost
Laboratory testing cost
Trademark filing fee
Miscellaneous registration charges

Medha Law & Partners provides detailed cost estimates depending on scale, sector, and location.

14. Post-Registration Compliance

After registration, ongoing compliance is mandatory:

Renew trade license annually.
Renew industrial and factory licenses periodically.
Maintain accounting books, audited financial statements, tax returns.
File periodic VAT returns.
Comply with labor laws, social security, provident fund.
Conduct periodic product quality tests, inspections.
Comply with environment monitoring, waste disposal limits.
Use trademark properly and enforce rights against counterfeiting.
Update ROC any change in directors, address, capital.
Failure to comply may result in fines, license revocation, or legal action.

15. Challenges & Risk Mitigation

Common challenges include:

Delays in cross-agency coordination (OCR, NFA, DDA, Environment).
Noncompliance in labeling, hygiene, or environment leading to rejection.
Infrastructure inadequacy (lab, storage, clean rooms).
Intellectual property disputes if trademarks conflict.
Tax audits, penalties due to poor accounting.

Mitigation: engage legal experts (like Medha Law & Partners), ensure infrastructure readiness before filing, carry out internal audits, conduct trademark search, maintain clear record keeping, and conduct mock inspections.

16. Advantages of Proper Registration

Registering a repackaging company in full compliance offers:

Legal recognition and liability protection.
Access to bank loans and investor funding.
Trust and legitimacy in market and with retailers.
Ability to sign contracts, tender, and export.
Protection of brand via trademark.
Eligibility for incentives under industrial policy.
Avoidance of penalties, closure, or confiscation.

Proper registration sets foundation for sustainable business growth.

Frequently Asked Questions (FAQs)

Q1: Can a foreign investor register a repackaging company in Nepal?
Yes. A foreign investor may participate under the Foreign Investment and Technology Transfer Act, 2019. They must follow screening, sectoral restrictions, repatriation rules, and minimum investment thresholds.

Q2: What is the difference between industrial registration and factory license?
Industrial registration grants status under Industrial Enterprises Act. A factory license is a specific permit for operation when facility exceeds thresholds or generates pollution, approved after inspection.

Q3: Is a trademark mandatory for a repackaging company?
It is not legally mandatory, but highly recommended. Registering a trademark ensures brand protection, prevents infringement, and adds value.

Q4: What happens if labeling noncompliance is found?
Regulatory authority may suspend license, recall products, impose fines, or legally bar sale until issues are corrected.

Q5: How often must tax returns be filed?
Income tax returns are filed annually. VAT returns are filed monthly or quarterly depending on the business category as per tax law.

Q6: Can the company change its address after registration?
Yes. The company must file a notice of change of registered address with OCR and obtain approval. Also sectoral licenses must be updated accordingly.

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