Step-by-Step Process for Company Registration in Nepal

Introduction: Overview of the Registration Process

 Registering a company in Nepal is a straightforward process regulated by the Company Act, 2006. The process involves several key steps that must be followed to ensure compliance with the laws and regulations. Whether you are starting a new business or expanding an existing one, understanding the steps involved in company registration will ensure that your business operates legally within the country. Learn Step-by-Step Process for Company Registration in Nepal.

In this article, we will break down the entire process, starting from the preparation of documents to the completion of the registration. By following these steps, you can easily navigate the process of establishing your business in Nepal. Medha Law and Partners is a leading corporate and best law firm in Nepal. 

What are the Steps for Company Registration?

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

1. Choose the Type of Company: Decide whether you are registering a Private Limited Company, Public Limited Company, or any other business entity.
2. Company Name Reservation: Submit an application to the Department of Industry (DOI) to reserve the company name.
3. Prepare Required Documents: Gather all necessary documentation, including the Memorandum of Association (MOA) and Articles of Association (AOA).
4. Submit the Application: Submit your application and documents to the Department of Industry for review.
5. Obtain PAN Number: Apply for a Permanent Account Number (PAN) with the Tax Department.
6. Receive Certificate of Incorporation: Once your application is approved, you will receive the Certificate of Incorporation, which officially establishes the company.
7. Open a Bank Account: After receiving the certificate, open a corporate bank account in the company’s name.
8. VAT Registration (if applicable): If your company’s turnover exceeds the threshold, apply for VAT registration with the tax office.

These steps are essential to ensure that your company is legally recognized and can operate freely in Nepal.

Where to Start the Company Registration Process?

The process of company registration in Nepal begins at the Department of Industry (DOI). The DOI is responsible for issuing the Certificate of Incorporation and ensuring compliance with the Company Act, 2006.

To begin, you will need to submit your company name for approval, along with a variety of required documents. The DOI reviews the application and determines whether it meets the legal and procedural standards. Once approved, you will be able to proceed with the registration.

Additionally, if your company is subject to taxation, you will also need to interact with the Revenue Department to obtain your Permanent Account Number (PAN) and, if applicable, register for VAT.

How to Submit the Application for Registration?

Submitting your company registration application is done in the following steps:

1. Online Submission: You can submit your application through the DOI’s online registration portal. This is a convenient option that allows you to file documents electronically.
2. Manual Submission: If preferred, you can also visit the DOI office in person to submit the required documents. The office is located in Singhadarbar, Kathmandu.
3. Documents Submission: The application will include the Memorandum of Association (MOA), Articles of Association (AOA), details of shareholders and directors, proof of the registered office, and other legal documentation.

Once your application is submitted, the DOI will verify the documents and process the registration. If everything is in order, they will approve your application and issue a Certificate of Incorporation.

Documents Needed to Register a Company

To successfully register a company in Nepal, you will need to provide several essential documents. These include:

• Memorandum of Association (MOA): This document outlines the company’s objectives, powers, and operations.
• Articles of Association (AOA): The AOA provides the rules and regulations for the company’s internal management.
• Identification Documents of Shareholders: A copy of the citizenship certificate or passport for all shareholders.
• Identification Documents of Directors: A copy of the director’s citizenship certificate or passport, along with their address proof.
• Proof of Registered Office: A lease agreement or ownership document for the company’s office location.
• PAN Application Form: If applicable, you will also need a form for the PAN registration from the Tax Department.
• Tax Registration Certificate: If required, you will need to provide the tax registration certificate for VAT purposes.

Having all these documents in order will streamline the process and minimize delays.

Legal Considerations for Company Registration

There are several legal considerations to keep in mind when registering a company in Nepal:

• Minimum Share Capital Requirement: Depending on the type of company, a minimum share capital may be required. For example, a Private Limited Company in Nepal generally requires a minimum capital of NPR 1,00,000.
• Foreign Investment Laws: Foreign investors can establish a business in Nepal, but certain industries may have restrictions. Ensure that your business complies with foreign investment laws and get the necessary approvals from the Foreign Investment and Technology Transfer Act, 1992.
• Director and Shareholder Requirements: A Private Limited Company must have at least two shareholders and one director. Directors can be foreign nationals, but at least one must be a Nepalese citizen.
• Legal Compliance: The company must ensure compliance with labor laws, tax laws, and other relevant regulations. Consulting with a legal expert can help you navigate these complexities.

How to Choose a Company Name for Registration?

Choosing a company name is an essential part of the registration process. Here are some guidelines to consider:

• Uniqueness: The company name must be unique and not similar to any existing company names in Nepal. A name that is already in use will not be approved by the DOI.
• Compliance: The name must comply with the naming conventions set by the Department of Industry. It cannot be offensive or misleading.
• Relevance: The name should reflect the nature of the business. For example, a company dealing in construction could have “Builders” or “Construction” in its name.
• Approval: Once you have chosen a name, you must submit it to the DOI for approval. If the name is available, they will reserve it for your use.

Having an appropriate and approved name is a critical first step in ensuring that your company is legally recognized.

What are the Government Fees for Company Registration?

The government fees for registering a company in Nepal typically include the following:

• Name Reservation Fee: A small fee for reserving the company name with the DOI.
• Company Registration Fee: This fee depends on the company’s capital. The registration fee for a small company is generally around NPR 10,000 to NPR 25,000.
• Legal Documentation Fees: The fees for preparing the Memorandum of Association (MOA), Articles of Association (AOA), and other necessary documents.
• PAN Registration Fee: The fee for obtaining a Permanent Account Number (PAN) from the Tax Department.
• VAT Registration Fees: If applicable, there are fees for registering your company for VAT.

These fees vary based on the type of company and the services required. It is advisable to check the specific fee schedule with the DOI.

Checklist for Step-by-Step Process

Before starting the company registration, make sure you have completed the following steps:

• Choose Company Type: Private Limited, Public Limited, etc.
• Reserve Company Name: Apply for company name approval from DOI.
• Prepare Required Documents: MOA, AOA, shareholder and director identification, office address proof, etc.
• Submit Application to DOI: Online or manual submission.
• Obtain PAN Number: Apply for PAN with the Tax Department.
• Receive Certificate of Incorporation: From DOI upon approval.
• Open Bank Account: In the company’s name.
• Register for VAT: If applicable.

Following this checklist will ensure that you meet all the requirements and avoid missing any crucial steps in the registration process.

Time Involved in Company Registration Process

The time required to complete the company registration process in Nepal generally ranges from 7 to 14 days. The time frame depends on several factors:

• Completeness of Documents: Incomplete or inaccurate documents can cause delays.
• Type of Company: Public Limited Companies or companies with foreign investments may take longer to process.
• Government Processing Time: While the DOI aims to process applications efficiently, some delays may occur due to high volumes of applications.

By ensuring that all documentation is complete and accurate, you can minimize delays and expedite the registration process.

Authorities Involved in the Registration Process

Several authorities are involved in company registration in Nepal:

• Department of Industry (DOI): The primary body responsible for issuing the Certificate of Incorporation.
• Revenue Department: Responsible for issuing the Permanent Account Number (PAN) and tax registration.
• Nepal Rastra Bank (NRB): Oversees foreign exchange transactions and banking requirements for companies.
• Local Municipal Authorities: Some municipalities may issue business licenses or permits required for operating a business.

These authorities ensure that your business complies with all relevant laws and regulations.

Laws Governing Company Registration in Nepal

The following laws govern company registration in Nepal:

• Company Act, 2006: This act provides the legal framework for company registration, management, and operations in Nepal.
• Foreign Investment and Technology Transfer Act, 1992: This law regulates foreign investment in Nepal and outlines the requirements for foreign investors.
• Income Tax Act, 2002: This act governs the taxation of businesses operating in Nepal.
• Labor Act, 2017: This law regulates employee rights and obligations for companies operating in Nepal.

It is essential for business owners to comply with these laws to ensure that their company operates legally in Nepal.

Costs and Expenses in the Registration Process

The costs involved in registering a company in Nepal include:

• Registration Fees: Depending on the company’s capital and type, these can range from NPR 10,000 to NPR 50,000.
• Legal Fees: If you hire a lawyer or legal advisor to assist with document preparation and submission, you will incur additional fees.
• Miscellaneous Expenses: Costs for obtaining certificates, registering for VAT (if applicable), and opening a bank account.

It’s essential to budget for these expenses to avoid any surprises during the registration process.

Services by MedhaCorpLaw for Seamless Registration

MedhaCorpLaw provides comprehensive services for company registration in Nepal. Our services include:

• Document Preparation: We assist in drafting and preparing the Memorandum of Association (MOA), Articles of Association (AOA), and other required documents.
• Government Liaison: We help submit your application to the Department of Industry (DOI) and ensure smooth processing.
• Tax Registration: We guide you through the process of obtaining Permanent Account Number (PAN) and VAT registration.
• Legal Compliance: Our team ensures that your business meets all legal requirements, including compliance with the Company Act and other relevant laws.

With our expert services, the registration process will be fast, efficient, and hassle-free.

What Happens After Company Registration is Completed?

Once your company is officially registered, you will receive the Certificate of Incorporation, and your business will be legally recognized in Nepal. Following registration, you can proceed with:

• Opening a Corporate Bank Account: Your company will need a bank account to handle financial transactions.
• Tax Compliance: You will need to file taxes, including VAT, if applicable.
• Hiring Employees: You can begin hiring staff and fulfilling other operational requirements for your business.

Once the registration process is complete, your company is ready to operate in Nepal.

FAQs

What are the initial steps to register a company?

The first steps include choosing the company type, reserving the company name, and preparing the necessary documents, such as the MOA and AOA.

Where can I submit my company registration forms?

You can submit your registration forms to the Department of Industry (DOI), either online or at their physical office.

How do I choose a company name for registration?

Select a unique name that complies with naming guidelines and submit it for approval to the Department of Industry (DOI).

What documents are required to start the registration?

Required documents include the MOA, AOA, identification proof of shareholders and directors, and proof of the registered office.

How much does it cost to register a company?

The cost varies depending on company capital and type, but it generally ranges from NPR 10,000 to NPR 50,000.

How long does the registration process take?

The registration process typically takes 7 to 14 days, depending on the completeness of your documents.

Who processes the company registration application?

The Department of Industry (DOI) processes the company registration application and issues the Certificate of Incorporation.

What government offices are involved in registration?

The Department of Industry (DOI), Revenue Department, and sometimes Nepal Rastra Bank are involved in the registration process.

What legal requirements must I meet for registration?

Legal requirements include complying with the Company Act, 2006, providing necessary documentation, and meeting capital and shareholder requirements.

Can I register a company without a lawyer?

Yes, it is possible, but it is recommended to consult a lawyer for proper document preparation and compliance.