How to Register IT Company in Nepal

Medha Law and Partners, a leading corporate law firm in Nepal, presents a comprehensive guide on the legal procedure, documentation, fees, timeline, and compliance standards required for IT company registration in Nepal. IT Company Registration in Nepal updated. This article provides step-by-step factual information aligned with Nepalese company laws, taxation requirements, and licensing procedures. This guide is based on practical legal expertise and regulatory interpretation. Medha Law and Partners Is a leading corporate law firm in Nepal.

What is an IT Company in Nepal

An IT company in Nepal is an entity legally recognized under the Company Act, 2063 (2006), operating in the technology sector. This includes businesses engaged in software development, mobile applications, web services, cloud computing, IT consulting, cybersecurity, and other tech-related solutions. The Information Technology sector is governed by national policy frameworks including the Information Technology Policy, 2072 BS, and regulations implemented by the Ministry of Communication and Information Technology.

In Nepal, IT companies are registered under private limited, public limited, or partnership structures. Most startups and mid-scale firms prefer private limited company registration due to its minimal capital requirement and ease of compliance.

Where to Register an IT Company Legally

All IT companies in Nepal must be registered at the Office of the Company Registrar (OCR), located under the Ministry of Industry, Commerce, and Supplies. The OCR is the primary authority that oversees incorporation, documentation, and compliance monitoring of companies under the Company Act, 2063.

After company incorporation, business owners must also register with:

Inland Revenue Office (for PAN/VAT)
Local government bodies (for business operation license, if required)
Department of Industry (for foreign investment or large-scale ventures)

All formal applications, fee payments, and document submissions must follow the procedures outlined by OCR and relevant taxation offices.

How Nepal Defines an IT-Based Company

Nepal defines an IT-based company as a business involved in the development, application, distribution, or service delivery of software, hardware, or technology-based solutions. According to the Industrial Enterprises Act, 2076, and IT Policy 2072, such companies fall under the service sector.

This includes:

Software development firms
Web and mobile application companies
IT consulting and training centers
Cloud service providers
Hardware and system integration firms
E-commerce platforms and digital service providers

Any company generating revenue through digital or technical means falls under the purview of IT-based companies.

What Legal Structures Are Available for IT

The most suitable legal structures for IT companies in Nepal include:

Private Limited Company (best for startups and SMEs)
Public Limited Company (for large firms or IPO-ready ventures)
Partnership Firms (used by small, local IT service providers)

Under the Company Act, 2063:

A private limited company requires at least one shareholder.
Public companies require a minimum of seven shareholders.
Foreign investors must follow the Foreign Investment and Technology Transfer Act (FITTA), 2019.

Most IT entrepreneurs opt for private limited companies due to flexibility, limited liability, and lesser compliance costs.

Required Documents for IT Company Registration

The following documents are mandatory for IT company registration in Nepal:

Application in prescribed format (as per Company Regulation, 2064)
Memorandum of Association (MOA)
Articles of Association (AOA)
Copies of citizenship certificates of promoters/shareholders
Consent letter of directors
Power of attorney (if submitted through an agent)
Copy of lease agreement or land ownership of office space
Passport-size photographs of shareholders/directors

Additional documents may be required for foreign investors, such as:

Passport copies
FITTA approval letter
Foreign investment agreement

All documents must be signed, scanned, and submitted online via OCR’s official portal.

How Long Registration Process Takes in Nepal

The registration process typically takes 7 to 15 working days, depending on documentation accuracy and verification procedures. If all documents are complete and legally compliant, OCR may issue a company registration certificate within 5 to 7 working days.

PAN and VAT registration can take an additional 3 to 5 working days. Delays often occur due to name approval issues, incomplete submissions, or legal review.

The post-registration steps, such as opening a bank account or applying for digital signature, may take an additional 1 week, depending on the bank and relevant authorities.

Government Fees for IT Company in Nepal

As per the Company Registration Regulation, the following fees apply:

Company registration fee (based on authorized capital)
- NPR 1,000 for up to NPR 100,000
- NPR 4,500 for NPR 1,000,000
Name approval fee: NPR 100
MOA/AOA stamp duty: NPR 500–1,000
PAN registration fee: Free (service charge may apply)
VAT registration fee: Free (subject to threshold)

Payment must be made through a bank voucher in the name of the Office of the Company Registrar or via designated online payment platforms.

Cost Breakdown for Complete Registration Process

The total cost of registering an IT company in Nepal depends on the business structure, capital, and professional service fees:

Government Fees: NPR 1,000–4,500
Stamp Duty & Notary Fees: NPR 500–1,500
PAN/VAT Setup Charges: NPR 500–1,000 (service charge)
Legal and Consultant Fees: NPR 5,000–15,000

Estimated total: NPR 7,000 to NPR 20,000 (for local registration). Foreign investment and digital signature may incur additional costs.

What Are the Legal Requirements to Start

Legal requirements to start an IT company in Nepal include:

Company registration under Company Act, 2063
Tax registration under Income Tax Act, 2058
Obtaining PAN (Permanent Account Number)
VAT registration if turnover exceeds NPR 2 million/year
Labor law compliance for employees
Intellectual property registration (optional)
FITTA approval (if foreign investment involved)

These requirements ensure legal identity, tax compliance, and operational authorization. Ignoring any of these may result in penalties or legal disqualification.

Step-by-Step Process to Register an IT Firm

Choose a unique company name and submit for name approval via OCR portal
Draft MOA and AOA with legal assistance
Prepare required documents (citizenship, photos, lease, etc.)
Submit the online application at OCR with attachments
Pay registration fees via bank deposit or online system
OCR reviews and verifies all submissions
Receive registration certificate if approved
Register for PAN and VAT at Inland Revenue Office
Open company bank account and deposit capital
Begin business operations

Where to Submit Company Registration Documents

All applications must be submitted through the OCR Online Portal www.ocr.gov.np. Physical submissions are not required unless requested by OCR.

Supporting documents for PAN/VAT registration must be submitted to the Inland Revenue Office under the Ministry of Finance. Office location proof is required during this phase.

Company name, MOA, AOA, and application details are filled in English or Nepali and uploaded in PDF or scanned formats.

Laws That Regulate IT Companies in Nepal

Several laws and regulations apply to IT companies in Nepal:

Company Act, 2063
Industrial Enterprises Act, 2076
Income Tax Act, 2058
Value Added Tax Act, 2052
FITTA Act, 2019 (for foreign investment)
Electronic Transactions Act, 2063
Labor Act, 2074

Compliance with these laws is mandatory for company registration, business operations, taxation, and dispute resolution.

Which Authorities Oversee IT Companies’ Registration

The following authorities are involved in IT company registration:

Office of the Company Registrar (OCR)
Inland Revenue Department (PAN/VAT)
Ministry of Industry, Commerce and Supplies
Nepal Rastra Bank (for foreign investment approval)
Department of Industry (for FITTA compliance)
Municipal authorities (for local business permits)

Each department has specific jurisdiction over various aspects of company creation, tax compliance, and foreign investment approvals.

Compliance Checklist After IT Company Formation

Post-registration, IT companies must:

Maintain proper bookkeeping and accounting records
File annual financial statements at OCR
Renew business registration annually
Pay applicable taxes and file returns quarterly/yearly
Maintain employee contracts and payroll records
Update any change in shareholding or directorship
Comply with cybersecurity and data privacy rules

Non-compliance may result in fines or deregistration.

What Services Help in Registration Process

Professional services that assist in IT company registration include:

Legal consulting firms like Medha Law and Partners
Chartered accountants and tax advisors
Business registration agencies
Intellectual property consultants (for trademark/patent registration)
Company secretarial services for documentation and updates

These services simplify the registration and ensure legal accuracy, reducing errors, and enhancing compliance.

FAQs

How much time does registration take?
The registration of an IT company in Nepal generally takes 7 to 15 working days depending on document submission accuracy, name approval, and OCR’s processing queue. Additional time is needed for PAN and VAT registration.

What documents do I need?
Documents include MOA, AOA, identification documents, consent letters, lease agreement, photographs, and for foreign investors, a passport and FITTA approval. All must be notarized and uploaded online.

Can foreigners register IT company?
Yes. Foreigners can register IT companies under FITTA 2019. They must obtain prior approval from the Department of Industry and Nepal Rastra Bank for capital remittance.

Do I need a trade license?
Trade license is not mandatory for all companies but may be required by the local municipality depending on business activity and location.

What is OCR in company registration?
OCR (Office of the Company Registrar) is the official authority that registers and regulates companies in Nepal as per Company Act, 2063.

Can I register online in Nepal?
Yes, the entire process is online through the OCR portal. Applicants need to upload scanned documents, fill forms, and make payments digitally.

Do I need a lawyer’s help?
While not mandatory, legal consultation ensures error-free documentation, accurate MOA/AOA drafting, and faster approval by OCR.

What fees are payable to government?
Government fees include name reservation, registration fee based on capital, MOA/AOA stamp duty, and PAN/VAT registration costs, most of which are nominal.

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