Introduction to Company Registration in Nepal
Company registration in Nepal has evolved significantly with the introduction of digital services through the Office of Company Registrar (OCR). The online company registration system allows entrepreneurs and business owners to establish their legal business entities without physical visits to government offices. The Companies Act, 2063 (2006) governs the registration and operation of companies in Nepal, providing the legal framework for business incorporation.
The online registration process streamlines business formation by reducing paperwork, minimizing processing time, and offering transparency throughout the registration journey. Entrepreneurs can now register private limited companies, public limited companies, and other business entities through the OCR’s digital platform. This system aligns with Nepal’s broader digitalization efforts and supports the government’s initiative to improve the ease of doing business.
Types of Companies That Can Be Registered Online
The Office of Company Registrar facilitates online registration for various company types under the Companies Act, 2063. Understanding these categories helps entrepreneurs choose the appropriate business structure for their operations.
Private Limited Company
A private limited company represents the most common business structure in Nepal. According to Section 3 of the Companies Act, 2063, a private limited company must have a minimum of one shareholder and can have up to fifty shareholders. The liability of shareholders remains limited to their share capital contribution. Private companies cannot offer shares to the general public and face restrictions on share transferability.
Public Limited Company
Public limited companies can offer shares to the general public through initial public offerings. These companies require a minimum of seven shareholders with no maximum limit. Section 58 of the Companies Act, 2063 mandates that public companies must have at least three directors. Public companies face stricter regulatory requirements and must comply with Securities Board of Nepal (SEBON) regulations.
Other Business Entities
The online system also accommodates registration for foreign company branch offices, liaison offices, and subsidiary companies. Each entity type serves different business purposes and carries specific regulatory requirements under the Companies Act, 2063 and Foreign Investment and Technology Transfer Act, 2075 (2019).
Legal Framework Governing Online Company Registration
The legal foundation for company registration in Nepal comprises multiple legislative instruments that define registration procedures, corporate governance, and operational requirements.
The Companies Act, 2063 (2006) serves as the primary legislation governing company formation and operation. This Act outlines registration procedures, capital requirements, director responsibilities, and shareholder rights. Section 4 of the Act specifies the registration process and documentation requirements for different company types.
The Companies Regulations, 2064 (2007) provide detailed procedural guidelines for implementing the Companies Act. These regulations specify form formats, fee structures, and administrative procedures for company registration and ongoing compliance.
The Foreign Investment and Technology Transfer Act, 2075 (2019) regulates foreign investment in Nepali companies. This Act requires foreign investors to obtain approval from the Department of Industry before registering companies with foreign ownership.
The Industrial Enterprises Act, 2076 (2020) governs industrial registration and provides various incentives for businesses operating in specific sectors or geographic locations. Companies engaged in manufacturing or industrial activities must register under this Act alongside company registration.
Prerequisites for Online Company Registration
Before initiating the online registration process, entrepreneurs must fulfill several prerequisites to ensure smooth application processing.
Name Reservation
Company name reservation constitutes the first mandatory step. The proposed company name must be unique and not similar to existing registered companies. The name should comply with Section 9 of the Companies Act, 2063, which prohibits names that are identical to existing companies, offensive, or misleading. The OCR’s online system allows applicants to check name availability and reserve approved names for thirty days.
Minimum Capital Requirements
| Company Type | Minimum Authorized Capital | Minimum Paid-up Capital |
|---|---|---|
| Private Limited Company | NPR 100,000 | No minimum requirement |
| Public Limited Company | NPR 10,000,000 | NPR 2,500,000 |
| Foreign Investment Company | As per FITTA requirements | 51% of authorized capital |
Required Documents
Applicants must prepare digital copies of the following documents:
- Citizenship certificates of all shareholders and directors (for Nepali nationals)
- Passport copies (for foreign nationals)
- Recent passport-size photographs
- Memorandum of Association (MOA)
- Articles of Association (AOA)
- Consent letters from directors
- Office rental agreement or ownership documents
- PAN registration certificate of shareholders
Foreign Investment Approval
Companies with foreign investment must obtain prior approval from the Department of Industry under the Foreign Investment and Technology Transfer Act, 2075. This approval is mandatory before proceeding with company registration at the OCR.
Step-by-Step Online Company Registration Process
The online company registration process follows a systematic approach through the OCR’s digital platform.
Step 1: Access the OCR Portal
Visit the official website of the Office of Company Registrar at www.ocr.gov.np. Create a user account by providing valid email address and contact information. The system will send verification credentials to the registered email.
Step 2: Name Reservation Application
Log into the portal and navigate to the name reservation section. Enter three proposed company names in order of preference. The system automatically checks name availability against the existing database. Submit the application with the prescribed fee of NPR 100. The OCR typically processes name reservations within one to two working days.
Step 3: Prepare Registration Documents
After name approval, prepare the Memorandum of Association and Articles of Association. The MOA must include company name, registered office address, objectives, authorized capital structure, and subscriber details. The AOA outlines internal management rules, director powers, shareholder rights, and meeting procedures. Both documents require signatures from all subscribers.
Step 4: Complete Online Registration Form
Access the company registration form through the OCR portal. Fill in comprehensive details including:
- Company name (as reserved)
- Registered office address with ward number
- Business objectives and activities
- Authorized and paid-up capital details
- Share structure and distribution
- Director information with citizenship/passport numbers
- Shareholder details with shareholding percentages
Step 5: Upload Required Documents
Upload scanned copies of all required documents in PDF format. Ensure document clarity and readability. The system accepts files up to 5MB per document. Required uploads include:
- Signed MOA and AOA
- Citizenship certificates/passports
- Director consent letters
- Office address proof
- Foreign investment approval (if applicable)
- PAN certificates
Step 6: Pay Registration Fees
Calculate and pay registration fees through the online payment gateway. The fee structure depends on authorized capital:
| Authorized Capital Range | Registration Fee (NPR) |
|---|---|
| Up to NPR 100,000 | 1,500 |
| NPR 100,001 – 500,000 | 3,000 |
| NPR 500,001 – 1,000,000 | 5,000 |
| NPR 1,000,001 – 10,000,000 | 10,000 |
| Above NPR 10,000,000 | 15,000 |
Step 7: Submit Application
Review all entered information and uploaded documents carefully. Submit the application electronically. The system generates an application reference number for tracking purposes.
Step 8: OCR Verification
The OCR staff reviews the submitted application and documents. This verification process typically takes three to five working days. The OCR may request additional information or corrections through the portal.
Step 9: Receive Company Registration Certificate
Upon approval, the OCR issues the company registration certificate electronically. Download the certificate from the portal. The certificate includes the company registration number, registration date, and official seal. This certificate serves as legal proof of company incorporation.
Step 10: Obtain PAN and VAT Registration
After company registration, apply for Permanent Account Number (PAN) through the Inland Revenue Department’s online portal. Companies with annual turnover exceeding NPR 5,000,000 must register for Value Added Tax (VAT). These registrations are mandatory for business operations and tax compliance.
Required Documents for Online Registration
The documentation requirements for online company registration ensure legal compliance and proper identification of company stakeholders.
For Nepali Promoters
- Valid citizenship certificate (both sides scanned)
- Recent passport-size photograph (digital format)
- PAN registration certificate
- Contact details including mobile number and email address
- Residential address proof
For Foreign Promoters
- Valid passport (all pages with stamps)
- Visa or work permit (if residing in Nepal)
- Foreign investment approval from Department of Industry
- Home country address proof
- Notarized and apostilled documents (as required)
Company Documents
- Memorandum of Association (signed by all subscribers)
- Articles of Association (signed by all subscribers)
- Director consent letters with signatures
- Registered office rental agreement or ownership certificate
- Board resolution appointing first directors
- Shareholder agreement (if applicable)
Office Address Proof
- Rental agreement with landlord’s citizenship copy
- Property ownership certificate (Lalpurja)
- Municipal tax payment receipt
- Utility bill showing the address
Registration Fees and Timeline
Understanding the cost structure and processing timeline helps entrepreneurs plan their company registration effectively.
Fee Structure
The registration fees vary based on authorized capital as specified in the Companies Regulations, 2064. Additional fees apply for specific services:
- Name reservation: NPR 100
- Name change: NPR 500
- Certified copy of certificate: NPR 500
- Document inspection: NPR 100 per document
- Late filing penalty: NPR 5,000 to NPR 50,000
Processing Timeline
| Stage | Duration |
|---|---|
| Name reservation | 1–2 working days |
| Document verification | 3–5 working days |
| Certificate issuance | 1 working day |
| Total process | 5–8 working days |
The timeline assumes complete and accurate documentation. Incomplete applications or requests for corrections extend the processing period. Expedited processing is not currently available through the online system.
Post-Registration Compliance Requirements
Company registration marks the beginning of ongoing compliance obligations under Nepali law.
Annual Return Filing
Section 110 of the Companies Act, 2063 requires all companies to file annual returns with the OCR within six months of the fiscal year end. The annual return includes financial statements, director details, shareholder information, and registered office address. Late filing attracts penalties ranging from NPR 5,000 to NPR 50,000.
Tax Registration and Filing
Companies must register with the Inland Revenue Department for income tax purposes. Corporate income tax rate stands at 25% for most businesses, with reduced rates for specific sectors. Companies must file annual tax returns and pay advance tax in three installments.
Social Security Registration
The Social Security Act, 2074 (2017) mandates registration with the Social Security Fund for companies employing one or more workers. Employers must contribute 20% of basic salary (employer 10%, employee 10%) to the fund.
Labor Law Compliance
Companies must comply with the Labor Act, 2074 (2017) regarding employment contracts, working hours, leave entitlements, and workplace safety. Businesses employing ten or more workers must maintain specific registers and records.
Industry-Specific Licenses
Depending on business activities, companies may require additional licenses from sector regulators such as:
- Department of Food Technology and Quality Control (food businesses)
- Nepal Telecommunications Authority (telecom services)
- Insurance Board (insurance companies)
- Nepal Rastra Bank (financial institutions)
Common Challenges and Solutions
Entrepreneurs often encounter specific challenges during the online registration process.
Technical Issues
The OCR portal occasionally experiences technical difficulties or slow loading times. Users should attempt registration during off-peak hours and maintain stable internet connectivity. Keeping backup copies of all documents prevents data loss during system interruptions.
Document Rejection
Applications face rejection when documents lack clarity, contain errors, or miss required signatures. Scanning documents at 300 DPI resolution ensures readability. All signatures must be original and clearly visible. Cross-checking information across documents prevents inconsistencies.
Name Approval Delays
Proposed names similar to existing companies face rejection. Conducting thorough preliminary searches and proposing unique names increases approval chances. Avoiding generic terms and including distinctive elements helps differentiate the company name.
Foreign Investment Complications
Foreign investors must navigate additional approval layers. Engaging legal consultants familiar with FITTA procedures expedites the approval process. Ensuring complete documentation at the Department of Industry stage prevents registration delays.
Benefits of Online Company Registration
The digital registration system offers multiple advantages over traditional paper-based processes.
Time Efficiency
Online registration reduces processing time from several weeks to approximately one week. Entrepreneurs can complete applications from any location without physical visits to government offices. Real-time application tracking provides transparency throughout the process.
Cost Savings
Digital registration eliminates costs associated with physical document submission, multiple office visits, and intermediary services. The standardized fee structure prevents unofficial payments and ensures transparency.
Accessibility
The online system operates 24/7, allowing entrepreneurs to submit applications at their convenience. The digital platform accommodates both domestic and international applicants, facilitating foreign investment.
Document Security
Electronic document storage reduces risks of physical document loss or damage. The system maintains permanent digital records accessible for future reference and compliance purposes.\
Conclusion
The online company registration process in Nepal represents a significant advancement in business facilitation and regulatory efficiency. The digital system established by the Office of Company Registrar streamlines company formation while maintaining legal compliance under the Companies Act, 2063. Entrepreneurs can now register companies within one week by following the systematic online process, preparing proper documentation, and meeting capital requirements.
What is the minimum number of directors required for a private limited company?
A private limited company in Nepal requires at least one director according to the Companies Act, 2063. However, having multiple directors is advisable for better corporate governance and operational continuity.
Can a foreigner be the sole shareholder of a Nepali company?
Yes, foreigners can be sole shareholders in sectors open to foreign investment under FITTA, 2075. However, certain sectors have foreign ownership restrictions or require Nepali partnership as specified in the Foreign Investment Policy.
How long is the company name reservation valid?
The reserved company name remains valid for thirty days from the approval date. If registration is not completed within this period, the name reservation lapses and requires fresh application with payment of reservation fees.
Is physical presence required at any stage of online registration?
No physical presence is required for the online registration process. However, companies may need to visit the OCR office to collect physical copies of certificates or for specific clarifications if requested by the registrar.
What happens if annual returns are not filed on time?
Failure to file annual returns within the prescribed timeline attracts penalties under Section 110 of the Companies Act, 2063. Penalties range from NPR 5,000 to NPR 50,000 depending on the delay duration. Continued non-compliance may lead to company deregistration.
Can a registered company change its registered office address?
Yes, companies can change their registered office address by filing Form 4 with the OCR within fifteen days of the change. The application must include proof of the new address and board resolution approving the change.
What is the difference between authorized capital and paid-up capital?
Authorized capital represents the maximum share capital a company can issue as stated in the MOA. Paid-up capital is the actual amount shareholders have paid for shares. Companies must maintain minimum paid-up capital as per their company type.
Are there any tax benefits for newly registered companies?
The Income Tax Act, 2058 and Industrial Enterprises Act, 2076 provide various tax incentives including tax holidays, reduced tax rates, and exemptions for companies operating in specific sectors, geographic locations, or export-oriented industries.
