How to Register a Company in Nepal?

1. Introduction to Company Registration in Nepal

How to register a company in Nepal?  Medha Law and Partners Is a Leading Corporate Law Firm in Nepal, specializing in company law and business incorporation services. Registering a company in Nepal is governed by the Companies Act, 2063 (2006), which provides a comprehensive framework for establishing and operating a company. Company registration is administered by the Office of the Company Registrar (OCR), operating under the Ministry of Industry, Commerce and Supplies.

Company registration provides legal recognition and enables individuals or groups to carry out business activities under a corporate structure. The process applies to various business entities, including private limited companies, public limited companies, and not-for-profit companies.

Registration is mandatory for formal business operations and for complying with tax, employment, and regulatory frameworks. A registered company enjoys a separate legal identity, can enter into contracts, own property, and be held accountable under the law.

2. Types of Companies You Can Register

According to the Companies Act, 2063 (2006), the following types of companies can be registered in Nepal:

• Private Limited Company: Can be established with a minimum of one and a maximum of 101 shareholders. Suitable for small and medium businesses.
• Public Limited Company: Requires a minimum of seven shareholders. Can raise funds from the public through shares.
• Non-Profit Company (Not-for-Profit Organization): Formed for promoting social welfare, arts, culture, religion, or charity. Cannot distribute profits.
• Foreign Company: A foreign company establishing a branch office or liaison office in Nepal.

The choice of company depends on ownership structure, capital requirements, and nature of business activities.

3. Benefits of Company Registration in Nepal

Registering a company in Nepal offers multiple advantages, including:

• Separate Legal Entity: A company is distinct from its shareholders.
• Limited Liability: Shareholders are liable only to the extent of their capital contribution.
• Legal Recognition: Enables lawful business operations and contract enforcement.
• Access to Credit: Banks and financial institutions prefer dealing with registered companies.
• Perpetual Succession: The company continues regardless of changes in ownership or management.
• Brand Protection: Registered companies can legally protect their trade names.

Company registration improves credibility with customers, suppliers, and government agencies.

4. Legal Requirements to Register a Company

To register a company in Nepal, certain legal requirements must be met as per the Companies Act, 2063:

• Minimum one promoter for private companies; seven for public companies.
• Unique company name not already registered with OCR.
• Registered office address within Nepal.
• Submission of Memorandum of Association (MOA) and Articles of Association (AOA).
• Capital structure declaration, including authorized and issued capital.
• Valid identification of shareholders and directors.

Compliance with these legal requirements ensures the legitimacy and acceptance of the registration application by OCR.

5. Documents Required for Company Registration

The following documents must be submitted to the Office of the Company Registrar:

• Application for registration in prescribed format.
• Memorandum of Association (MOA).
• Articles of Association (AOA).
• Copy of citizenship certificate of shareholders and directors.
• Passport (for foreign nationals).
• Recent passport-sized photos.
• Power of attorney (if using representative).
• Proof of office address (lease agreement or ownership documents).
• Consent letters from proposed directors.

All documents must be submitted digitally and in Nepali language unless stated otherwise.

6. Step-by-Step Process of Registration

The process of registering a company in Nepal involves the following steps:

1. Name Reservation: Submit an application to OCR for name approval.
2. Document Preparation: Draft MOA, AOA, and other required documents.
3. Online Submission: Upload documents on OCR’s online portal.
4. Document Review: OCR reviews the application and may request clarifications.
5. Registration Fee Payment: Pay applicable fees based on capital.
6. Certificate Issuance: Receive Certificate of Incorporation upon approval.

The entire process can be completed online via the OCR e-service platform.

7. Timeline for Company Registration Process

The time required to complete company registration in Nepal varies based on document accuracy and responsiveness. Generally:

• Name Approval: 1-2 working days.
• Document Review and Clarification: 3-5 working days.
• Certificate Issuance: Within 7-10 working days from complete submission.

Timely preparation and submission of documents can expedite the process. Delays may occur if the OCR requires additional documentation or clarifications.

8. Cost Involved in Registering a Company

The total cost of company registration in Nepal includes government fees, professional service charges (if any), and other administrative expenses. Approximate costs:

• Government fees: NPR 1,000 to NPR 70,000 based on authorized capital.
• Digital signature cost (if required): NPR 2,000 to NPR 3,000.
• Legal or consultant fees: Varies depending on service provider.

Additional expenses may arise from notarization, document translation, and address verification.

9. Government Fees and Charges Payable

Government registration fees are based on the company’s authorized capital as per OCR guidelines:

• Up to NPR 100,000: NPR 1,000
• NPR 100,001 – NPR 500,000: NPR 4,500
• NPR 500,001 – NPR 2,500,000: NPR 9,500
• NPR 2,500,001 – NPR 10,000,000: NPR 16,000
• Above NPR 10,000,000: NPR 70,000

Fees are paid electronically through the OCR payment portal or through designated bank accounts.

10. Checklist Before You Register a Company

Before applying for company registration, ensure the following:

• Chosen company name is available and appropriate.
• Valid identification documents of all promoters.
• Clear understanding of capital structure.
• Drafted MOA and AOA as per standard format.
• Consent letters from directors.
• Office address with supporting documents.
• Appointed legal or administrative representative (if required).
• Availability of digital signature (optional but recommended).

This checklist can help avoid rejection and expedite the registration process.

11. Relevant Laws and Legal Provisions

Company registration is primarily governed by the Companies Act, 2063 (2006). Related laws include:

• Industrial Enterprises Act, 2076
• Income Tax Act, 2058
• Foreign Investment and Technology Transfer Act, 2075
• Electronic Transaction Act, 2063
• Labor Act, 2074

These laws define legal obligations related to incorporation, operation, taxation, foreign investment, and labor compliance.

12. Authorities Involved in Registration Process

The key government bodies and authorities involved in company registration include:

• Office of the Company Registrar (OCR): Primary authority for registration.
• Ministry of Industry, Commerce and Supplies: Supervisory ministry.
• Department of Industry: For foreign investment and industry classification.
• Inland Revenue Office (IRO): For PAN and VAT registration.
• Local Government Offices: For address verification.

Each authority plays a role in registration and post-registration procedures.

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13. Common Mistakes and How to Avoid Them

Frequent mistakes made during company registration include:

• Choosing a name similar to existing companies.
• Incomplete or mismatched documents.
• Incorrect capital structure declaration.
• Delayed responses to OCR queries.
• Missing director consent letters.
• Using unauthorized representatives.

Avoid these errors by verifying documents, consulting legal experts, and using OCR’s updated guidelines.

14. Post-Registration Compliance Requirements

After registration, companies must fulfill several compliance obligations:

• Obtain PAN from Inland Revenue Office.
• Open a company bank account.
• Register for VAT (if applicable).
• Maintain statutory registers and records.
• Submit annual returns and financial reports.
• Conduct annual general meetings (AGMs).
• Renew business licenses (if required).

Failure to comply may lead to penalties or company deregistration.

15. Professional Services for Registration Assistance

Professional firms such as MedhaCorpLaw provide expert services for company registration, including:

• Legal consultation on company type and structure.
• Drafting of MOA, AOA, and other documents.
• Representation at OCR and other authorities.
• Assistance with digital submissions and clarifications.
• PAN and VAT registration.
• Ongoing compliance support.

Using professional services reduces errors and speeds up the registration process.

FAQs

How long does registration take in Nepal?
Company registration usually takes 7 to 10 working days if all documents are accurate and submitted correctly.

What is the cost to register a company?
Costs range from NPR 1,000 to NPR 70,000 depending on capital, excluding legal and administrative charges.

Is online registration possible in Nepal?
Yes, the Office of the Company Registrar offers an online platform for company registration.

What documents are needed to register?
You need MOA, AOA, ID proof, photos, office address proof, and director consent letters.

Can a foreigner register a company here?
Yes, foreigners can register companies, subject to compliance with investment laws and regulations.

Where do I submit registration forms?
All forms and documents must be submitted online via the OCR’s official portal.

Are there any name restrictions in Nepal?
Yes, names must not match existing companies and should not violate public norms or trademarks.

Is a lawyer required for registration?
A lawyer is not mandatory but highly recommended for document accuracy and legal compliance.

What type of company should I choose?
Choose based on business size, ownership, and goals. Private limited is common for small businesses.

What happens after company registration?
You must obtain PAN, open a bank account, register for taxes, and meet legal compliance requirements.