NRN Online Company Registration in Nepal

Overview of NRN Company Registration in Nepal

Non-Resident Nepali (NRN) entrepreneurs can register companies in Nepal through online platforms established by the Office of Company Registrar (OCR). The Companies Act, 2063 (2006) and Foreign Investment and Technology Transfer Act, 2075 (2019) govern NRN business registration. The Department of Industry facilitates online company registration through its integrated portal, allowing NRNs to establish private limited companies, public limited companies, and other business entities without physical presence in Nepal.

Legal Framework for NRN Business Registration

The legal provisions governing NRN company registration include multiple statutes and regulations that define the rights and procedures for non-resident Nepalis.

Applicable Laws and Regulations

Legal Instrument	Key Provisions for NRNs
Companies Act, 2063 (2006)	Defines company formation procedures, share capital requirements, and registration processes applicable to all companies, including NRN-owned entities.
Foreign Investment and Technology Transfer Act, 2075 (2019)	Grants NRNs national treatment status, allowing them to invest in Nepal with the same rights as resident Nepali citizens in most sectors.
Industrial Enterprises Act, 2076 (2020)	Provides framework for industrial registration and operation of manufacturing and service enterprises.
Non-Resident Nepali Act, 2064 (2008)	Defines NRN status and establishes special provisions for NRN investments and business activities in Nepal.

NRN Investment Rights

Non-Resident Nepalis enjoy specific investment privileges under Section 3 of the Foreign Investment and Technology Transfer Act, 2075. NRNs can invest in all sectors open to Nepali citizens except those specifically restricted by law. The Act treats NRN investments as domestic investments rather than foreign direct investment, providing significant advantages in terms of repatriation rights, ownership limits, and sectoral access.

Eligibility Criteria for NRN Company Registration

Who Qualifies as NRN

According to the Non-Resident Nepali Act, 2064, the following individuals qualify as Non-Resident Nepalis:

• A Nepali citizen who has been residing in any foreign country for at least two years for employment, business, or profession purposes.
• A foreign citizen of Nepali origin who has acquired foreign citizenship after renouncing Nepali citizenship.
• A foreign citizen whose father, mother, grandfather, or grandmother was a Nepali citizen at any time.
• A foreign citizen who was born in Nepal and has resided in any foreign country.

Investment Capacity Requirements

NRNs must demonstrate financial capacity to meet minimum capital requirements specified under the Companies Act, 2063. For private limited companies, the minimum authorized capital is NPR 100,000, though practical business operations typically require higher capitalization. NRNs must provide proof of fund sources through bank statements, income certificates, or other financial documentation.

Types of Companies NRNs Can Register Online

Private Limited Company

Private limited companies represent the most common business structure for NRN entrepreneurs. Section 4 of the Companies Act, 2063 defines private limited companies as entities with minimum two and maximum 101 shareholders. These companies cannot publicly trade shares and offer limited liability protection to shareholders. The minimum authorized capital requirement is NPR 100,000, with at least 10% paid-up capital at registration.

Public Limited Company

Public limited companies can issue shares to the general public and list on Nepal Stock Exchange. Section 5 of the Companies Act, 2063 requires minimum seven promoters and NPR 10,000,000 authorized capital. NRNs can establish public companies for larger business ventures requiring substantial capital mobilization from public investors.

Other Business Structures

Business Type	Minimum Shareholders	Minimum Capital	Key Features
Private Limited Company	2	NPR 100,000	Limited liability, restricted share transfer, suitable for small to medium enterprises.
Public Limited Company	7	NPR 10,000,000	Can issue public shares, higher compliance requirements, suitable for large enterprises.
Partnership Firm	2	No minimum	Unlimited liability, governed by Partnership Act, 2020, simpler registration process.
Sole Proprietorship	1	No minimum	Unlimited personal liability, simplest structure, registered at local municipality.

Online Company Registration Process for NRNs

Step 1: Name Reservation

NRNs must first reserve their proposed company name through the Office of Company Registrar’s online portal at ocr.gov.np. The applicant submits three alternative names in order of preference. The name must comply with Section 9 of the Companies Act, 2063, which prohibits names identical or similar to existing companies, names suggesting government patronage, or names containing offensive language. The name reservation remains valid for 35 days from approval date.

Step 2: Document Preparation and Notarization

NRNs must prepare and notarize the following documents:

• The Memorandum of Association must state the company’s objectives, authorized capital, and initial share distribution as per Section 10 of the Companies Act, 2063.
• The Articles of Association must outline internal management rules, director powers, and shareholder rights according to Section 11 of the Companies Act, 2063.
• Citizenship certificates or passports of all shareholders and directors must be notarized by Nepali embassies or consulates in the country of residence.
• NRN identification cards issued by the Non-Resident Nepali Association must be submitted as proof of NRN status.
• Board resolution appointing authorized representatives in Nepal must be properly executed and notarized.

Step 3: Online Application Submission

The applicant accesses the Department of Industry’s online portal and completes the integrated company registration form. The system requires uploading scanned copies of all notarized documents, payment of prescribed fees, and submission of bank deposit certificates showing paid-up capital. The online system automatically forwards applications to relevant government agencies including Office of Company Registrar, Inland Revenue Department, and Social Security Fund.

Step 4: Fee Payment

Fee Type	Amount	Payment Method
Name Reservation Fee	NPR 100	Online banking, eSewa, Khalti, or bank deposit
Company Registration Fee	0.5% of authorized capital (minimum NPR 1,000)	Online banking or bank deposit
Memorandum and Articles Filing Fee	NPR 500	Online banking or bank deposit
PAN Registration Fee	NPR 500	Included in integrated payment
VAT Registration Fee	No fee	Automatic if turnover exceeds threshold

Step 5: Document Verification and Approval

The Office of Company Registrar verifies submitted documents for legal compliance within 7 working days. Officials check whether the Memorandum and Articles comply with Companies Act provisions, whether shareholders meet eligibility criteria, and whether all required documents are properly notarized. If deficiencies exist, the system generates automated notices requiring corrections within specified timeframes.

Step 6: Certificate Issuance

Upon approval, the Office of Company Registrar issues the Certificate of Company Registration electronically. The certificate contains the company registration number, registration date, and authorized capital. Simultaneously, the Inland Revenue Department issues the Permanent Account Number (PAN) certificate. NRNs can download these certificates from the online portal and receive physical copies through authorized representatives in Nepal.

Required Documents for NRN Online Company Registration

Personal Documents

• Valid passport copies of all NRN shareholders and directors must be notarized by Nepali diplomatic missions abroad.
• NRN identification cards issued by Non-Resident Nepali Association must be current and valid.
• Proof of residential address in the country of residence must include utility bills, bank statements, or government-issued documents not older than three months.
• Recent passport-sized photographs of all shareholders and directors must meet specifications prescribed by the Office of Company Registrar.
• Citizenship certificates of resident Nepali directors or shareholders, if any, must be clear and legible copies.

Company Formation Documents

• The Memorandum of Association must be drafted according to the format prescribed in Schedule 1 of the Companies Act, 2063, containing company name, registered office address, objectives, authorized capital, and share distribution.
• The Articles of Association must follow the format in Schedule 2 of the Companies Act, 2063, detailing director appointment procedures, meeting requirements, voting rights, and dividend distribution policies.
• Share subscription agreements must be executed by all initial shareholders, specifying the number of shares subscribed and payment terms.
• Board resolution appointing the company secretary and authorizing specific individuals to represent the company must be properly documented.

Financial Documents

• Bank deposit certificates from recognized Nepali commercial banks must verify that paid-up capital has been deposited in the company’s account.
• Source of fund declarations must explain the origin of investment capital, particularly for amounts exceeding NPR 1,000,000.
• Tax clearance certificates from the country of residence may be required for investments exceeding certain thresholds.
• Foreign currency exchange certificates must document the conversion of foreign currency to Nepali rupees for investment purposes.

Authorized Capital and Paid-Up Capital Requirements

Minimum Capital Requirements

Section 4 of the Companies Act, 2063 mandates minimum authorized capital of NPR 100,000 for private limited companies. The authorized capital represents the maximum share capital the company can issue. At least 10% of authorized capital must be paid-up at the time of registration. For example, a company with NPR 1,000,000 authorized capital must deposit NPR 100,000 as paid-up capital before registration.

Capital Increase Procedures

Companies can increase authorized capital through special resolution passed by shareholders holding at least 75% of voting shares. Section 19 of the Companies Act, 2063 requires filing amended Memorandum of Association with the Office of Company Registrar within 35 days of the resolution. Additional registration fees calculated at 0.5% of the increased capital amount must be paid.

Appointment of Local Representative

Legal Requirement

NRN company owners residing abroad must appoint at least one resident Nepali director or authorized representative. Section 82 of the Companies Act, 2063 requires every company to have at least one director ordinarily resident in Nepal. This representative handles official correspondence, attends regulatory meetings, and ensures compliance with local laws.

Power of Attorney

NRNs execute a power of attorney document authorizing the local representative to act on behalf of the company. The power of attorney must be notarized at Nepali embassies or consulates abroad and subsequently authenticated by the Ministry of Foreign Affairs in Nepal. The document should clearly specify the scope of authority, duration, and limitations on the representative’s powers.

Tax Registration and Compliance

Permanent Account Number (PAN)

The Inland Revenue Department automatically issues PAN during the integrated company registration process. Section 4 of the Income Tax Act, 2058 (2002) requires all companies to obtain PAN before commencing business operations. The PAN serves as the primary tax identification number for all tax-related transactions and filings.

Value Added Tax (VAT) Registration

Companies with annual turnover exceeding NPR 5,000,000 must register for VAT under Section 10 of the Value Added Tax Act, 2052 (1996). NRN companies engaged in manufacturing, trading, or service provision typically require VAT registration. The registration can be completed online through the Inland Revenue Department portal within 30 days of exceeding the threshold.

Tax Obligations

Tax Type	Rate/Amount	Filing Frequency	Legal Basis
Corporate Income Tax	25% of taxable income	Annual return within 3 months of fiscal year end	Income Tax Act, 2058 Section 3
Value Added Tax (VAT)	13% on taxable supplies	Monthly return by 25th of following month	VAT Act, 2052 Section 16
Withholding Tax	Varies by transaction type (1.5%–15%)	Monthly return by 25th of following month	Income Tax Act, 2058 Section 88
Social Security Contribution	31% of basic salary (20% employer, 11% employee)	Monthly payment	Social Security Act, 2074 Section 23

Post-Registration Compliance Requirements

Annual General Meeting

Section 72 of the Companies Act, 2063 mandates holding annual general meetings within six months of the fiscal year end. The meeting must approve annual financial statements, appoint auditors, and address shareholder concerns. NRN shareholders can participate through video conferencing or appoint proxies to vote on their behalf.

Annual Return Filing

Companies must file annual returns with the Office of Company Registrar within one month of the annual general meeting. Section 110 of the Companies Act, 2063 prescribes the format and content of annual returns, including details of shareholders, directors, share capital, and registered office address. Late filing attracts penalties of NPR 1,000 for the first month and NPR 100 for each subsequent day.

Financial Statement Audit

Section 109 of the Companies Act, 2063 requires all companies to maintain proper books of accounts and prepare annual financial statements. Qualified chartered accountants registered with the Institute of Chartered Accountants of Nepal must audit these statements. The audit report must be submitted to the Office of Company Registrar along with the annual return.

Sector-Specific Restrictions for NRN Investment

Prohibited Sectors

The Foreign Investment and Technology Transfer Act, 2075 prohibits foreign investment in certain sectors. While NRNs generally enjoy national treatment, some restrictions apply:

• Retail business with investment below NPR 50 million remains restricted for foreign investors, though NRNs may access this sector under specific conditions.
• Arms and ammunition manufacturing requires special government approval regardless of investor nationality.
• Radioactive material production and nuclear energy generation remain prohibited for private investment.
• Cottage industries identified by the government for protection of local entrepreneurs may restrict NRN participation.

Regulated Sectors

Certain sectors require special licenses or approvals before NRN companies can commence operations:

• Financial services including banking, insurance, and securities trading require Nepal Rastra Bank or Insurance Board approval under respective regulatory frameworks.
• Educational institutions must obtain approval from the Ministry of Education, Science and Technology under the Education Act, 2028 (1971).
• Healthcare facilities require registration with the Ministry of Health and Population under the Health Service Act, 2053 (1997).
• Media and broadcasting companies need licenses from the Ministry of Communication and Information Technology under relevant media laws.

Repatriation Rights for NRN Investors

Profit Repatriation

Section 8 of the Foreign Investment and Technology Transfer Act, 2075 grants NRNs the right to repatriate profits earned from their investments. NRN investors can transfer net profits after paying applicable taxes to their foreign bank accounts. The repatriation requires approval from Nepal Rastra Bank and submission of audited financial statements, tax clearance certificates, and proof of tax payment.

Capital Repatriation

NRNs can repatriate the original investment amount upon company liquidation or share sale. Section 9 of the Foreign Investment and Technology Transfer Act, 2075 permits capital repatriation after settling all domestic liabilities and obtaining tax clearance. The repatriation must occur through banking channels with proper documentation of the investment source and duration.

Digital Signature and Authentication

Digital Signature Requirement

The Electronic Transaction Act, 2063 (2008) recognizes digital signatures as legally valid for electronic documents. NRN company registration increasingly requires digital signatures for online document submission. The Office of Company Registrar accepts digital signatures issued by licensed certification authorities in Nepal.

Authentication Process

Documents notarized abroad require authentication through a two-step process. First, Nepali embassies or consulates must notarize the documents. Second, the Ministry of Foreign Affairs in Nepal must authenticate the embassy notarization. This dual authentication ensures document validity for company registration purposes.

Banking and Financial Requirements

Opening Company Bank Account

NRN companies must open bank accounts in Nepal to deposit paid-up capital and conduct business transactions. Commercial banks require the following documents:

• The Certificate of Company Registration issued by the Office of Company Registrar must be original or certified copy.
• The Memorandum and Articles of Association must be submitted to verify company objectives and authorized signatories.
• Board resolution authorizing specific individuals to operate the bank account must specify transaction limits and signing authorities.
• PAN certificate and VAT registration certificate must be provided for tax compliance purposes.
• Identification documents of authorized signatories including citizenship certificates or passports must be verified.

Foreign Currency Transactions

Nepal Rastra Bank regulates foreign currency transactions under the Foreign Exchange Regulation Act, 2019 (1962). NRN companies receiving foreign investment must convert foreign currency to Nepali rupees through authorized banking channels. Banks issue foreign currency exchange certificates documenting the conversion, which serve as proof of legitimate investment source.

Intellectual Property Protection

Trademark Registration

NRN companies can register trademarks with the Department of Industry under the Patent, Design and Trademark Act, 2022 (1965). Trademark registration provides exclusive rights to use specific marks, logos, or brand names. The registration process requires filing applications with prescribed fees, publication in the Nepal Gazette, and addressing any oppositions within specified timeframes.

Patent and Design Protection

Innovative NRN companies can protect inventions and industrial designs through patent and design registration. Section 3 of the Patent, Design and Trademark Act, 2022 grants patent protection for 7 years for inventions and 5 years for designs. The registration requires detailed specifications, drawings, and proof of novelty.

Dispute Resolution Mechanisms

Arbitration

The Arbitration Act, 2055 (1999) provides framework for resolving commercial disputes through arbitration. NRN companies can include arbitration clauses in contracts, specifying arbitration procedures and venues. Section 3 of the Act recognizes arbitration agreements as binding, and arbitral awards are enforceable through courts.

Court Jurisdiction

Company-related disputes fall under the jurisdiction of specialized commercial courts established under the Administration of Justice Act, 2048 (1992). Section 3 of the Companies Act, 2063 designates specific courts to handle company law matters including shareholder disputes, director liability claims, and winding-up petitions.

Advantages of Online Company Registration

Time Efficiency

The online registration system reduces company formation time from several weeks to approximately 7-15 working days. The integrated portal eliminates the need for multiple visits to different government offices. Automated document verification and electronic certificate issuance expedite the registration process significantly.

Cost Savings

Online registration reduces costs associated with physical document submission, travel expenses, and intermediary fees. NRNs can complete the entire process from abroad without hiring local agents for routine submissions. The transparent fee structure published on government portals prevents overcharging and unofficial payments.

Transparency and Tracking

The online system provides real-time application tracking through unique registration numbers. Applicants receive automated notifications at each processing stage. The digital record-keeping ensures transparency and reduces opportunities for corruption or document manipulation.

Common Challenges and Solutions

Document Authentication Issues

NRNs often face delays in document authentication through Nepali embassies abroad. Solution: NRNs should contact embassies well in advance, prepare documents according to prescribed formats, and maintain regular follow-up. Some embassies offer expedited services for urgent cases upon payment of additional fees.

Technical Difficulties with Online Portal

The online registration portal occasionally experiences technical glitches or server downtime. Solution: NRNs should attempt submissions during Nepal business hours when technical support is available. Maintaining backup copies of all documents and completing applications in multiple sessions prevents data loss.

Communication Barriers

Time zone differences and language barriers complicate communication between NRN applicants and government officials. Solution: Appointing bilingual local representatives familiar with registration procedures facilitates smooth communication. Using official email channels and maintaining written records of all correspondence ensures accountability.

Recent Reforms and Updates

Digitalization Initiatives

The Government of Nepal launched the “Digital Nepal Framework” to modernize public service delivery. The Department of Industry integrated company registration with tax registration, social security enrollment, and municipal business licensing. These reforms reduced registration time and improved service quality for NRN entrepreneurs.

Policy Changes

The Foreign Investment and Technology Transfer Act, 2075 (2019) replaced the previous 1992 Act, introducing significant improvements for NRN investors. The new Act simplified approval procedures, expanded sectoral access, and strengthened repatriation rights. The Industrial Enterprises Act, 2076 (2020) further streamlined industrial registration and licensing processes.