MedhaCorpLaw is a leading law firm in Nepal providing legal services in corporate, non-profit, and social development sectors. This article offers a complete and factual guide to the non-profit organization registration process in Nepal, tailored for individuals and groups intending to establish legally recognized non-governmental organizations (NGOs) and similar entities. All legal references are based on applicable Nepalese legislation including the Association Registration Act, 2034 B.S. (1977 A.D.).
Introduction to Non-Profit Registration in Nepal
In Nepal, non-profit organizations are registered primarily under the Association Registration Act, 2034 B.S., which governs the formation of entities established for social welfare, education, environment, development, and humanitarian purposes. Registration is processed through the District Administration Office (DAO) of the relevant district. A registered non-profit gains legal identity, operational legitimacy, and eligibility for both national and international funding, subject to compliance with applicable laws and regulations.
Legal Framework Governing Non-Profits in Nepal
Non-profit registration and operation in Nepal are governed by the following laws:
- Association Registration Act, 2034 B.S.
- Social Welfare Council Act, 2049 B.S.
- Income Tax Act, 2058 B.S. (for tax exemptions and filings)
- Company Act, 2063 B.S. (if applicable for specialized foundations)
The District Administration Office oversees registration, and the Social Welfare Council (SWC) regulates activities involving foreign aid and international partnerships. These laws mandate organizational transparency, financial accountability, and periodic reporting.
Types of Non-Profit Entities in Nepal
The Government of Nepal legally recognizes several categories of non-profit entities, including:
- Non-Governmental Organizations (NGOs)
- Clubs and Community-Based Organizations (CBOs)
- Non-Profit Societies and Forums
- Umbrella Federations of NGOs
- Trusts and Foundations (under separate legal frameworks)
These entities must operate without profit motives and focus exclusively on activities promoting public interest. They are not permitted to distribute income among members.
Eligibility Criteria for Registration in Nepal
To register a non-profit organization in Nepal under the Association Registration Act, the following requirements must be met:
- A minimum of seven Nepali citizens aged 18 or above
- All members must have valid Nepali citizenship certificates
- Members must have no criminal convictions
- The organization’s purpose must align with non-commercial, social welfare objectives
- The entity must have a physical office address in Nepal
Foreign nationals cannot directly register an NGO under this Act but may collaborate with registered local organizations.
Required Documents for Registration Process
Applicants are required to prepare and submit the following documents to the District Administration Office:
- Completed application form
- Constitution of the organization in Nepali
- Citizenship certificates of all founding members
- Minutes of the founding meeting, signed by all members
- Passport-size photographs of members
- Rental or ownership agreement for the office premises
- Map of the organization’s office location
- PAN certificate (if already issued)
- Tax clearance certificate of the office (if applicable)
- Letter of recommendation from local authority (optional)
All documents must be properly formatted, complete, and translated into Nepali if originally in another language.
Step-by-Step Registration Procedure in Nepal
The following steps summarize the non-profit registration process:
- Conduct a founding meeting with at least seven members.
- Draft and finalize the organization’s constitution.
- Collect and prepare all required documents.
- Submit the application to the District Administration Office.
- The DAO verifies the submitted documents and constitution.
- Legal approval is obtained after internal review.
- Upon approval, a registration certificate is issued.
- Register for Permanent Account Number (PAN) at the Inland Revenue Office.
- If foreign funding is expected, register with the Social Welfare Council (SWC).
Registration Timeline and Processing Period
The average processing timeline for non-profit registration is as follows:
- Document preparation: 3–5 working days
- Submission to DAO and verification: 7–10 working days
- Issuance of certificate: Within 15 working days of successful submission
In total, the process takes around 2 to 3 weeks, depending on administrative workload and accuracy of documentation.
Government Authorities Involved in Registration
Several government institutions are involved in the registration and operation of non-profit entities:
- District Administration Office (DAO) – Primary registration body
- Social Welfare Council (SWC) – Regulates foreign-funded organizations
- Inland Revenue Department (IRD) – Issues PAN and monitors financial compliance
- Local Ward Office – May assist in verifying office location
- Nepal Rastra Bank – Grants approval for foreign currency transactions (if applicable)
Each authority plays a defined role depending on the nature and scope of the non-profit.
Applicable Registration Fees and Charges
Registration-related costs for non-profit organizations include:
- DAO registration fee: Ranges from NPR 1,000 to NPR 5,000
- Document notarization and attestation: Around NPR 500–1,000
- PAN registration: Generally free of charge
- Legal assistance fees (if obtained): Approximately NPR 5,000 to NPR 20,000
These fees may vary by district and service provider.
Common Challenges Faced During Registration
Non-profits often face challenges during the registration process, including:
- Errors in documentation and formatting
- Non-compliant or vague constitutional clauses
- Delays in verification at the DAO
- Lack of understanding of procedural steps
- Difficulties in acquiring a valid office address
- Issues with member eligibility (e.g., incomplete citizenship documents)
MedhaCorpLaw assists clients in resolving these challenges efficiently through expert legal services.
Legal Obligations After Registration is Complete
Once registered, non-profit organizations in Nepal are legally obligated to:
- Conduct Annual General Meetings (AGMs)
- Maintain and submit audited financial statements
- File annual activity reports to DAO and SWC
- Renew or amend the constitution when necessary
- Maintain transparent records of operations and funding
- Register for tax exemptions under the Income Tax Act if applicable
Non-compliance may lead to suspension or cancellation of registration.
Renewals, Amendments, and Record Updates
Non-profits must renew their registration annually through the DAO. The renewal process requires:
- Submission of the audit report
- Activity report for the past year
- Confirmation of continued compliance with stated objectives
Amendments to the constitution or changes in membership must be filed with supporting documents. Updates in office address or board structure also require formal notification to the DAO.
Compliance, Monitoring, and Reporting Duties
Post-registration, organizations are responsible for:
- Ensuring use of funds for designated objectives only
- Maintaining detailed financial records
- Submitting quarterly and annual reports if receiving foreign aid
- Cooperating with inspections from DAO and SWC
- Timely renewal of registration and other legal filings
Failure to comply may result in financial penalties or legal consequences.
Professional Services for Registration Support
MedhaCorpLaw offers full legal support for:
- Drafting constitution and minutes
- Preparing and compiling required documents
- Legal review before DAO submission
- Representation at DAO and SWC
- Tax and PAN registration services
- Ongoing legal compliance and audit support
Our experienced team ensures a smooth registration experience for clients across all provinces.
Registration Checklist for Non-Profit Entities
Use the following checklist to verify readiness for non-profit registration:
- At least seven founding Nepali members
- Approved constitution in Nepali
- Founding meeting minutes signed by members
- Citizenship certificates of members
- Rental or ownership proof of office
- Office location map
- Application form
- Passport-size photos of members
- PAN certificate or application
- Letter from local government (if applicable)
FAQs
- How long does the registration process take?
The process generally takes 2 to 3 weeks depending on document completeness and district office processing times. - What is the cost to register a non-profit?
The cost ranges between NPR 1,000 and NPR 5,000, excluding document preparation and legal fees. - Who can apply to register a non-profit?
Any group of at least seven Nepali citizens above 18 years of age can apply. - Is foreign funding allowed for non-profits?
Yes, but only with registration at the Social Welfare Council and compliance with foreign aid rules. - Can I register alone or need a group?
At least seven Nepali citizens are required to register a non-profit organization. - Do I need an office for registration?
Yes, proof of a physical office is mandatory for registration approval. - What documents must be notarized or signed?
Founding meeting minutes and some identity documents must be signed or notarized. - What law governs non-profits in Nepal?
The Association Registration Act, 2034 B.S. governs the registration and operation of non-profits. - Are there annual compliance requirements?
Yes, annual activity and financial reports must be submitted to DAO and SWC. - Do I need legal help for registration?
While not mandatory, legal assistance ensures accuracy and faster processing.
MedhaCorpLaw continues to support non-profit organizations across Nepal with registration, compliance, and advisory services. For tailored support, contact our legal experts for a consultation.