To help new entrepreneurs with setting up their businesses, Towards Business presents you with the ultimate guide on how to register a company in Nepal on your own.
This guide has been curated after cross-verifying information with 10 different corporate lawyers in Nepal and the guide has been last updated on June 11, 2022.
Company registration in Nepal can be done through the help of corporate lawyers but it can cost you anywhere from NPR 5,000 to NPR 25,000 to get a company registered. Then, you have additional governmental taxes to pay which can add to your expense over a lawyer’s cost.
So, if you are someone with a limited budget, it is a good idea to learn how to register a company in Nepal on your own.
The company registration process is first carried out digitally and then, physically where you will have to visit the Office of Company Registrar (OCR) located at Tripureshwor, Kathmandu. The registration process is simple and we’ve covered everything you need to know in this guide.
Table of Contents
This ultimate guide covers the following topics:
- Differences Between Private And Public Company According To The Companies Act
- Minimum Investment Amount Needed To Register A Company In Nepal
- Government Fees for Company Registration in Nepal
- Documents Needed for Company Registration in Nepal
- Step-By-Step Company Registration Process in Nepal
- Conclusion and Next Steps
If you have any questions regarding any of the above topics, please feel free to ask them in the comments.
Differences Between Private And Public Company According To The Companies Act
There are two major types of companies that can be registered in Nepal according to the Companies Act:
1. Private Company
If you’re looking to set up a business of your own such as a service business or an online business then, registering a private company is the way to go.
A private company is a company that can raise investment capital from up to 101 different shareholders and a minimum of 1 shareholder.
Such types of companies cannot offer shares to the general public for raising investment capital and instead have to offer shares to individual investors, co-founders, or venture capital firms to raise investment capital for setting up a company. Also, private companies do not have to disclose their finances to the public but do have to submit annual financial audits to the Inland Revenue Department (IRD) of Nepal.
Any company that you see with the ‘Pvt. Ltd.’ (Private Limited) suffix on their company name, such as ABC Enterprises Pvt. Ltd. is a private company.
2. Public Company
A Public Company is a company that can raise investment capital by offering shares, bonds, or debentures to the general public. A Public Company should have a minimum of 7 shareholders and there is no limit to the maximum number of shareholders.
All companies listed on the Nepalese Stock Exchange (NEPSE) are public companies since they allow company shares to be bought by the general public. Therefore, public companies have to disclose their finances to the public along with the submission of annual financial audits to the Inland Revenue Department of Nepal.
Such not-for-profit companies raise investment capital in a similar manner to that of private companies.
Minimum Investment Capital Needed To Register A Company In Nepal
Before we discuss the minimum investment capital needed to register a company in Nepal, it is important to understand that there are two types of capital that need to be stated during the company registration process:
1. Paid-up Capital of a Company
The paid-up capital is the amount that needs to be deposited into the bank account of the company within ‘x’ days of company registration in Nepal. For example, if a company has mentioned that their paid-up capital is NPR 1 lakhs during registration then, that is the amount they actually have to invest in their company within ‘x’ days of company registration in Nepal.
2. Authorized Capital of a Company
The authorized capital is the amount that sets the limit of how much capital raise is allowed in the company. For example, if a company has mentioned that their authorized capital is NPR 10 lakhs during company registration then, that is the upper limit of how much further capital they can raise in the future.
Note: Companies can increase the authorized capital limit after registration if they want to inject more capital into the company in the future.
Therefore, when we talk about the minimum investment capital needed to register a company in Nepal, we are talking about paid-up capital. The minimum amount of investment capital or paid-up capital needed to register a company in Nepal is as follows:
|S.N||Company||Amount (in NPR)||Amount (in words)|
|1.||Private Company||1,00,000||1 lakh rupees|
|2.||Public Company||1,00,00,000||1 crore rupees|
Government Fees for Company Registration in Nepal
You may be tempted to set a high authorized capital during company registration but there are different government fees that you need to pay for different authorized capital limits of a company.
Here are the government fees for private company registration based on authorized capital of a company in Nepal:
|Amount of Authorized Capital ( in NPR)||Registration Fee (in NPR)|
|Up to 1,00,000||1,000|
|1,00,001 to 5,00,000||4,500|
|5,00,001 to 25,00,000||9,500|
|25,00,001 to 1,00,00,000||16,000|
|1,00,00,001 to 2,00,00,000||19,000|
|2,00,00,001 to 3,00,00,000||22,000|
|3,00,00,001 to 4,00,00,000||25,000|
|4,00,00,001 to 5,00,00,000||28,000|
|5,00,00,001 to 6,00,00,000||31,000|
|6,00,00,001 to 7,00,00,000||34,000|
|7,00,00,001 to 8,00,00,000||37,000|
|8,00,00,001 to 9,00,00,000||40,000|
|9,00,00,001 to 10,00,00,000||43,000|
|10,00,00,000||30 for each 1,00,00,000|
Here are the government fees for public company registration based on authorized capital of a company in Nepal:
|Amount of Authorized Capital (in NPR)||Registration fee ( in NPR)|
|Up to 1,00,00,000||15,000|
|1,00,00,001 to 10,00,00,000||40,000|
|10,00,00,001 to 20,00,00,000||70,000|
|20,00,00,001 to 30,00,00,000||1,00,000|
|30,00,00,001 to 40,00,00,000||1,30,000|
|40,00,00,001 to 50,00,00,000||1,60,000|
|Above 50,00,00,000||3000 for each 1,00,000|
Documents Needed for Company Registration in Nepal
Here are the documents needed for company registration in Nepal:
|Application for registration.||1 set original|
|Memorandum of Association (MoA) and Articles of Association (AoA) of the proposed company.||2 sets original each|
|Citizenship certificate in case of Nepalese promoter / passport in case of foreign promoter.||1 copy|
|Shareholder’s agreement (if any).||1 copy|
|Copy of certificate of registration and other registration documents (MoA and AoA) if the shareholder is a company.||1 copy|
|Corporate resolution of the shareholder if the shareholder is a company.||1 copy|
|Copy of prior approval of the Department Of Industry (DOI) in case the shareholder is a foreign investor.||1 copy|
Step-By-Step Company Registration Process in Nepal
Here’s a step-by-step private company registration process in Nepal:
Step 1: Reservation of Company Name at OCR
First, you will have to go onto the official website of the OCR and check if the company name you want to incorporate with is already taken or not.
Once you are on the website, create a new user account by clicking on the first option, that is, ‘To establish a new Company, please click here‘.
You will be redirected to a signup page. Enter all of your details in the given form fields and press the ‘Create User‘ button.
Once, you’ve submitted the form, you will be sent a mail in the provided email’s inbox that contains your temporary password:
Now, go back to OCR’s website and fill in the ‘Username‘ field as your email address and the ‘Password‘ field as your temporary password received in the mail. Click on ‘Login’ after filling up the fields.
You will then be asked to change your password.
Change your password and make a note of it. You will need the new password again to login.
Finally, now once you are logged in, head over to the top left section of the website to ‘Name Check/Name Reservation‘. Once you hover over it, select ‘Name Reservation Request Form‘.
You will see the following form:
If you have seen the above form, you will now have to fill the form fields with your respective company name and company objectives.
Here’s an example of what that looks like from the online manual provided by the OCR:
After you’ve completed filling everything up, hit submit and you will receive a confirmation email in your provided email’s inbox that the name reservation request has been sent. To check if your company name is approved or not, click on the ‘Home‘ button at the top left side of the website and you will see something that looks like the following:
Now, all you have to do is wait till you receive either an Approval or a Rejection email to your mail’s inbox.
Step 2: Register your Company
Once you’ve received a mail stating that your company name reservation request has been approved, you can proceed further with the company registration process.
Login to the official website of the OCR and you will see a screen that looks like the following. Click on ‘Please fill the Registration Form‘.
You will be redirected to the Company Registration form. Fill the form up with your details and press ‘Save‘ after all fields have been filled up. You can refer to the online manual provided by OCR to understand what you have to fill in the provided fields.
Then, click on ‘Preview’ and then, press ‘Submit’ if the form fields look to be correct.
After submission, you can view the detail information of the registration which includes the revenue amount to be paid, temporary application ID and confirmation message. Here’s a sample of the same:
Step 3: Submit Physical Copies Of Documents At OCR
If your submitted application is approved (notified through email), you will have to then submit the hard copy of your original documents that are submitted online at the OCR. The registration fee will be mentioned in your email. Here is a sample of the mail:
After receiving a mail similar to the above mail, visit the Office of the Company Registrar (OCR) located here at Tripureshwor, Kathmandu, Nepal with all the original Certificates and Documents for further verification of the Registration Process. OCR will now verify all the documents.
Step 4: Receive Your Company Registration Certificate
If your documents are verified to be correct, you can receive your company registration certificate from the OCR. Here’s a sample of what the certificate looks like:
You have successfully incorporated your company in Nepal on your own!
Conclusion and Next Steps
By following the guide you should now be able to successfully register a company in Nepal.
However, the legal process doesn’t end there and there are three other steps that you need to follow after registering your company:
- Register for Permanent Account Registration (PAN) / Value Added Tax (VAT) by visiting the Inland Revenue Department (IRD).
- Open a Nepalese bank account for your company so that investors can deposit the paid-up capital of the company. All of your company’s future transactions should be done from this account as a best practice.
- Register your business in your local ward office.
By completing the above three steps, you are now able to start operating your company.
With that, we wrap up this ultimate guide on how to register a company in Nepal on your own. If you have any questions, please feel free to write them down in the comments.