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Company Registration in Nepal

Companies Act 2006 (2063) is the prevailing law of Nepal that governs the registration and compliance of companies in Nepal. The Office of the company Registrar (OCR) is the governing authority of all the companies registered and in operation in Nepal. The Companies Act 2006 (2063) restricts any person to carry out any business transaction without registration.

TYPES: According to the Companies Act 2006 (2063) companies of different types can be registered. Which are:

  1. Private Limited Company;
  2. Public Limited Company;
  3. Profit not distributing company.

 

  1. Private Limited Company- Those companies that can be registered by a single shareholder or maximum of 101 shareholders to carryout business transactions. The minimum capital requirement is not prescribed in the Companies Act and no cap has been prescribed for maximum investment. However, government requires a private limited company to convert into a public limited company if the paid-up capital exceeds 1 arab NPR. This type of companies is considered as a limited liability company.
  2. Public Limited Company- Registering Public Limited Company in Nepal has a bit more requirements to be fulfilled in comparison to Private Limited Company. Minimum of seven promoters/shareholders are required to register a Public Limited Company having no celling of maximum number. A minimum capital of 10 crore NPR is required. A Public Limited Company can issue its shares/equity to the public to meet its capital requirement. This type of companies is considered as an unlimited liability company.
  3. A Profit not distributing company can be incorporated for the protection and upliftment of specific group of people or overall welfare of the society with the objective of not distributing dividends/profits from the income generated. It can also be considered as a modern concept of NGOs.

Procedure for Registration of a company:

  1. Online Application for name approval to the OCR’s online service portal.
  2. Online Application of required Company Documents to the OCR’s online service portal.
  3. Submission of original signed documents to the OCR.
  4. Approval of registration from the OCR.
  5. Payment of prescribed Government Fee based on the Authorized Capital of the company.
  6. Issuance of registration certificate by OCR.
  7. Registration of business at Local/Ward Office.
  8. Inland Revenue Office registration (PAN/VAT/EXCISE).

Timeline:

Generally, the process for Company Registration from online application for name approval, company registration, ward registration to OCR to obtaining PAN Certificate from Inland Revenue Office may range between 5 to 10 days.

Required Documents:

  1. Notarized Citizenship Copy of every shareholder in case of Nepalese shareholder/s or notarized copy of passport in case of a foreign shareholder/s.
  2. Application for registration.
  3. 2 sets of original signed copy of Memorandum of Association and Article of Association of the Company.
  4. A copy of prior foreign investment approval from the Department of Industries if the shareholder/s is a foreign national.
  5. A copy of Company documents along with the verified Shareholder’s Registry in case of the shareholder is a registered company/s and the resolution passed by the board to register such company.

 

Government Fee Requirement:

Government fee for a Private Limited Company based on the Company’s Authorized Capital:

  1. Up to NPR 1,00,000- NPR 1,000
  2. NPR 1,00,001 to 5,00,00- NPR 4,500
  3. NPR 5,00,001 to 25,00,000- NPR 9,500
  4. NPR 25,00,0001 to 1,00,00,000- NPR 16,000
  5. NPR 1,00,00,001-10,00,00,000- additional NPR 3,000 for every 1,00,00,000
  6. NPR 10,00,00,0001 and above- additional NPR 30 for every 1,00,00,000

Government fee for a Public Limited Company based on the Company’s Authorized Capital:

  1. NPR 1,00,00,000- NPR 15,000
  2. NPR 1,00,00,001- 10,00,00,000- NPR 40,000
  3. NPR 10,00,00,001- 20,00,00,000- NPR 70,000
  4. NPR 20,00,00,0001- 30,00,00,000- NPR 1,00,000
  5. NPR 30,00,00,001- 40,00,00,000- NPR 1,30,000
  6. NPR 40,00,00,001- 50,00,00,000- NPR 1,60,000
  7. NPR 50,00,00,000 and above- additional NPR 3000 for every 1,00,000

Licensing:

In addition to company registration, certain companies require to obtain license from their concerned authorities before commencing the business, such as- Banks and financial institutions, Import/export, Hospitals, Insurance, Construction business, Pharmacy, etc.