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Business

Starting a Business in Nepal

Formal requirements for starting a business consists of four steps

Registration of vehicle of operation

PAN/VAT registration

Industry Registration where applicable

Local Level Registration

Each step will require some documents that needs to submitted for inspection and an application in a standard format. Additionally some other licensing and approval may also be required prior to commencing the registration process, this include approvals such as those in the case of businesses related to tourism which needs to be taken from the Department of tourism.

In general any person desirous of starting a business in Nepal can choose the form of business from one of two categories.

Limited Liability Company

Limited Liability company is characterized by the existence of Cap on Liability based on the amount of investment. It also has a separate legal personality distinct from that of its owners/investors.  The owners are not personally liable for any of the company‚Äôs debt obligations. Limited Liability company can take the form of i) Private Limited Company ii) Public Limited Company iii) Single shareholder Company iv) Profit not Distributing Company each having its own distinct feature.

Unlimited Liability Company

Unlimited liability companies are characterized by full legal responsibility of the owners in all matters of the company including debt obligations. The company does not have a separate legal personality; it is rather only an extension of the personality of the owners. Two forms of unlimited liability company exist in Nepal: Sole trader (Single Ownership Company) and Partnership Firm (made of two or more owners whose liability is decided by the amount of investment).


Selecting a Suitable Vehicle of Operation


Sole Trader

ParticularsSole Trader
Legal statusUnlimited Liability vehicle
Commencement of OperationAfter receiving certificate of registration
Permitted activitiesActivities mentioned during registration
Accounting and auditGenerally based on self-assessment
Requirements for operationMaximum of 1 owner having Nepalese Citizenship certificate
Capital requirement for registrationNone
Permissibility for conversion into another business vehicleAllowed
Transfer of ownershipAllowed
Term of the business establishment and renewal requirementsFive years from the date of registration after which period must be renewed every two years
Governing LawFor the state of Bagmati: Trade and Business Act, 2076 Federal Legislation: Private Firm Registration act

Partnership Firm

Particulars Partnership Firm
Legal status Unlimited Liability vehicle
Commencement of Operation After receiving certificate of registration
Permitted activities Activities mentioned during registration
Accounting and audit Generally based on self-assessment
Requirements for operation Minimum of 2 owners having Nepalese Citizenship certificate
Capital requirement for registration None
Permissibility for conversion into another business vehicle Allowed
Transfer of ownership Allowed
Term of the business establishment and renewal requirements Every year
Permissibility to increase capital Allowed
Permissibility for enlarging the scope of operation Allowed after receiving prior approval
Profit sharing/Liability of partners As per the partnership agreement
Governing Law For the state of Bagmati: Trade and Business Act, 2076 Federal Legislation: Private Firm Registration act

Private Limited Company

Particulars Private Limited Company
Legal status Limited Liability vehicle
Commencement of Operation After receiving certificate of Incorporation
Permitted activities Activities mentioned in the AoA/Consensus agreement
Accounting and audit Prescribed financial statements needs to be prepared within six months from the end of the fiscal year and needs to be audited and signed by the BoD
Requirements for operation Minimum 1 shareholder and a maximum of 101 shareholders
Capital requirement for registration None
Permissibility for conversion into another business vehicle Allowed but not into an unlimited liability vehicle
Transfer of ownership/shares Allowed but only within existing shareholders
Transmission of Ownership/shares Automatic
Public Trading of Shares Not allowed
Term of the business establishment and renewal requirements None
Permissibility to increase/decrease capital Only after passing a special resolution
Permissibility for enlarging the scope of operation Only after passing a special resolution
Directors Upto 11
Company Secretary Optional
Provision of General Meeting As per the AoA
Governing Law Companies act, 2063

Single Shareholder Company

Particulars Single Shareholder Company
Legal status Limited Liability vehicle
Commencement of Operation After receiving certificate of Incorporation
Permitted activities Activities mentioned in the AoA
Accounting and audit Prescribed financial statements needs to be prepared within six months from the end of the fiscal year and needs to be audited and signed by the BoD
Requirements for operation Maximum 1 Shareholder
Capital requirement for registration None
Permissibility for conversion into another business vehicle Allowed but not into an unlimited liability vehicle
Transfer of ownership/shares Allowed
Transmission of Ownership/shares Automatic
Public Trading of Shares Not allowed
Term of the business establishment and renewal requirements None
Permissibility to increase capital Allowed
Permissibility for enlarging the scope of operation Allowed
Directors 11
Company Secretary Optional
Calling of General Meeting Not required
Governing Law Companies act, 2063

Profit not Distributing Company

Particulars Profit not Distributing Company
Legal status Limited Liability vehicle
Commencement of Operation After receiving certificate of Incorporation
Permitted activities Activities mentioned in the AoA
Accounting and audit Prescribed financial statements needs to be prepared within six months from the end of the fiscal year and needs to be audited and signed by the BoD
Requirements for operation Minimum 5 members
Capital requirement for registration None
Permissibility for conversion into another business vehicle Not allowed
Transfer of ownership/shares Not allowed
Transmission of Ownership/shares Not allowed
Public Trading of Shares Not applicable
Term of the business establishment and renewal requirements None
Permissibility to increase capital Allowed
Permissibility for enlarging the scope of operation Allowed but with the prior approval of OCR
Directors As per the AoA
Company Secretary Optional
Calling of General Meeting Not required
Governing Law Companies act, 2063

Public Limited Company

Particulars Public Limited Company
Legal status Limited Liability vehicle
Commencement of Operation After receiving Approval from OCR
Permitted activities Activities mentioned in the AoA
Accounting and audit Prescribed financial statements needs to be prepared within 21 days prior to holding AGM and needs to be audited and signed by the BoD
Requirements for operation Minimum 7 shareholders
Capital requirement for registration 10,000,000
Permissibility for conversion into another business vehicle Allowed
Transfer of ownership/shares Allowed
Transmission of Ownership/shares Allowed
Public Trading of Shares Allowed
Term of the business establishment and renewal requirements None
Permissibility to increase capital After the adoption of special resolution
Permissibility for enlarging the scope of operation Allowed but with the prior approval of OCR
Directors 3-11
Company Secretary Mandatory
Calling of General Meeting Annually
Record of General Meeting To be submitted to the OCR within 30 days of General Meeting
Issuance of Prospectus Mandatory
Governing Law Companies act, 2063


Business Registration Process


  1. Sole trader/Partnership registration can be done at either the local level offices or the state level offices depending on the proposed capital of the firm. In case it is a business related with commerce, registration will be done at the Department of Commerce. In case it is a business falling under the category of industry, registration will be done at the either at the local level or provincial offices depending on the capital size. The fees for registration is also depended on the capital. Standard format application needs to be submitted along with the necessary documents. For more details click here
  2. PAN/VAT registration is compulsory for all businesses. This can be done by filling the prescribed application online and presenting the application for verification. The process takes 1-2 days to complete depending on the volume of applications received by the IRD. For details regarding documents to be submitted and other procedures click here.
  3. Local Level registration is to be done at the relevant local body where business operation will take place. A copy all prior registration certificate needs to be submitted and an application needs to be filled out. After such registration, a yearly payment of Business tax distinct from Corporate Income tax needs to be submitted on a yearly basis based on the prevailing rates.
  4. As per the prevailing Contribution Based social security act, all employers must be mandatorily registered in the Social Security fund in order to make their due contributions. The process is relatively simple to complete and takes on average a day to complete.

  1. Sole trader/Partnership registration can be done at either the local level offices or the state level offices depending on the proposed capital of the firm. In case it is a business related with commerce, registration will be done at the Department of Commerce. In case it is a business falling under the category of industry, registration will be done at the either at the local level or provincial offices depending on the capital size. The fees for registration is also depended on the capital. Standard format application needs to be submitted along with the necessary documents. For more details click here
  2. PAN/VAT registration is compulsory for all businesses. This can be done by filling the prescribed application online and presenting the application for verification. The process takes 1-2 days to complete depending on the volume of applications received by the IRD. For details regarding documents to be submitted and other procedures click here.
  3. Local Level registration is to be done at the relevant local body where business operation will take place. A copy all prior registration certificate needs to be submitted and an application needs to be filled out. After such registration, a yearly payment of Business tax distinct from Corporate Income tax needs to be submitted on a yearly basis based on the prevailing rates.
  4. As per the prevailing Contribution Based social security act, all employers must be mandatorily registered in the Social Security fund in order to make their due contributions. The process is relatively simple to complete and takes on average a day to complete.

  1. As per the prevailing laws of Nepal, an electronic signature can be used instead of handwritten signatures for submission of documents online. A digital signature certificate is required which can be obtained from private certifying companies upon filling of a form and payment of applicable fees. User profile can be created by accessing the website of OCR which will be used for submission of all other relevant documents at the OCR. After creating a user profile, the name chosen for the firm must be submitted to the OCR. After approval of chosen name, an application along with a copy MoA and AoA/consensus agreement needs to be submitted to the OCR along with the relevant fees. Relevant fee is dependent on the capital of the proposed business. The list of applicable fees can be found here
  2. Industry registration is not mandatory for all firms. Only those category of business that fall under the definition of Industry as per the Industrial Enterprise act , 2076 will require Industry registration. A standard application needs to be submitted to either the DoI or the DoCSI depending on the nature of businesss along with all other prescribed documents. For details click here.
  3. PAN/VAT registration is compulsory for all businesses. This can be done by filling the prescribed application online and presenting the application for verification. The process takes 1-2 days to complete depending on the volume of applications received by the IRD. For details regarding documents to be submitted and other procedures click here.
  4. Local Level registration is to be done at the relevant local body where business operation will take place. A copy all prior registration certificate needs to be submitted and an application needs to be filled out. After such registration, a yearly payment of Business tax distinct from Corporate Income tax needs to be submitted on a yearly basis based on the prevailing rates.
  5. As per the prevailing Contribution Based social security act, all employers must be mandatorily registered in the Social Security fund in order to make their due contributions. The process is relatively simple to complete and takes on average a day to complete.

  1. As per the prevailing laws of Nepal, an electronic signature can be used instead of handwritten signatures for submission of documents online. A digital signature certificate is required which can be obtained from private certifying companies upon filling of a form and payment of applicable fees. User profile can be created by accessing the website of OCR which will be used for submission of all other relevant documents at the OCR. After creating a user profile, the name chosen for the firm must be submitted to the OCR. After approval of chosen name, an application along with a copy MoA and AoA/consensus agreement needs to be submitted to the OCR along with the relevant fees. Relevant fee is dependent on the capital of the proposed business. The list of applicable fees can be found here
  2. Industry registration is not mandatory for all firms. Only those category of business that fall under the definition of Industry as per the Industrial Enterprise act , 2076 will require Industry registration. A standard application needs to be submitted to either the DoI or the DoCSI depending on the nature of businesss along with all other prescribed documents. For details click here.
  3. PAN/VAT registration is compulsory for all businesses. This can be done by filling the prescribed application online and presenting the application for verification. The process takes 1-2 days to complete depending on the volume of applications received by the IRD. For details regarding documents to be submitted and other procedures click here.
  4. Local Level registration is to be done at the relevant local body where business operation will take place. A copy all prior registration certificate needs to be submitted and an application needs to be filled out. After such registration, a yearly payment of Business tax distinct from Corporate Income tax needs to be submitted on a yearly basis based on the prevailing rates.
  5. As per the prevailing Contribution Based social security act, all employers must be mandatorily registered in the Social Security fund in order to make their due contributions. The process is relatively simple to complete and takes on average a day to complete.

  1. As per the prevailing laws of Nepal, an electronic signature can be used instead of handwritten signatures for submission of documents online. A digital signature certificate is required which can be obtained from private certifying companies upon filling of a form and payment of applicable fees. User profile can be created by accessing the website of OCR which will be used for submission of all other relevant documents at the OCR. After creating a user profile, the name chosen for the firm must be submitted to the OCR. After approval of chosen name, an application along with a copy MoA and AoA/consensus agreement needs to be submitted to the OCR along with the relevant fees. Relevant fee is dependent on the capital of the proposed business. The list of applicable fees can be found here .
  2. Industry registration is not mandatory for all firms. Only those category of business that fall under the definition of Industry as per the Industrial Enterprise act , 2076 will require Industry registration. A standard application needs to be submitted to either the DoI or the DoCSI depending on the nature of businesss along with all other prescribed documents. For details click here.
  3. PAN/VAT registration is compulsory for all businesses. This can be done by filling the prescribed application online and presenting the application for verification. The process takes 1-2 days to complete depending on the volume of applications received by the IRD. For details regarding documents to be submitted and other procedures click here.
  4. Local Level registration is to be done at the relevant local body where business operation will take place. A copy all prior registration certificate needs to be submitted and an application needs to be filled out. After such registration, a yearly payment of Business tax distinct from Corporate Income tax needs to be submitted on a yearly basis based on the prevailing rates.
  5. As per the prevailing Contribution Based social security act, all employers must be mandatorily registered in the Social Security fund in order to make their due contributions. The process is relatively simple to complete and takes on average a day to complete.

  1. As per the prevailing laws of Nepal, an electronic signature can be used instead of handwritten signatures for submission of documents online. A digital signature certificate is required which can be obtained from private certifying companies upon filling of a form and payment of applicable fees. User profile can be created by accessing the website of OCR which will be used for submission of all other relevant documents at the OCR. After creating a user profile, the name chosen for the firm must be submitted to the OCR. After approval of chosen name, an application along with a copy MoA and AoA/consensus agreement needs to be submitted to the OCR along with the relevant fees. Relevant fee is dependent on the capital of the proposed business. The list of applicable fees can be found here . A public Limited company can only commence business after it receives a certificate of commencement of business. The certificate becomes available once all other proceedings excet the registration of company is completed such as, Issuance of Share, allocation of shares etc.
  2. Industry registration is not mandatory for all firms. Only those category of business that fall under the definition of Industry as per the Industrial Enterprise act , 2076 will require Industry registration. A standard application needs to be submitted to either the DoI or the DoCSI depending on the nature of businesss along with all other prescribed documents. For details click here.
  3. PAN/VAT registration is compulsory for all businesses. This can be done by filling the prescribed application online and presenting the application for verification. The process takes 1-2 days to complete depending on the volume of applications received by the IRD. For details regarding documents to be submitted and other procedures click here.
  4. Local Level registration is to be done at the relevant local body where business operation will take place. A copy all prior registration certificate needs to be submitted and an application needs to be filled out. After such registration, a yearly payment of Business tax distinct from Corporate Income tax needs to be submitted on a yearly basis based on the prevailing rates.
  5. As per the prevailing Contribution Based social security act, all employers must be mandatorily registered in the Social Security fund in order to make their due contributions. The process is relatively simple to complete and takes on average a day to complete.


Additional Approval and Compliances


Department of Food technology and quality control

Any business intending to import any consumable food item must apply for Import Certification in accordance with Food Act 2023 and Food Regulation 2027.

Department of Drug Administration

All companies intending to manufacture drugs/import drugs for sale in Nepal must receive approval from Department of drug Administration.  

Department of Tourism

Hotels, Lodge, Restaurants, Bars operating in the tourism sector, Trekking agency, Travel and tour Operators must receive approval from Department of Tourism by filing an application in the standard format.

Civil Aviation Authority

All activities related to aviation are regulated by the Civil aviation authority. Approvals must be taken from CAAN in matters pertaining to certification of Aircraft, Leasing of aircraft, registration of aircrafts/hot air balloons etc. More information can be accessed by visiting the CAAN website.

Department of Mining

Licensing is mandatory for excavation and survey of mines and minerals.

Department of Information and Broadcasting

Approvals from Department of Information and Broadcasting is required for businesses operating Satellite receiving Station, Satellite TV, Radio, Digital Cable, Telephone, Online Communication Platform etc.

Nepal Rastra Bank

Financial Institutions and Financial Intermediaries require approval from NRB. In addition, they must also comply with directives issued by NRB.

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