How to Register a Foreign-Owned Company in Nepal: The Complete Process

A foreign investor who incorporates a Nepali company before securing Department of Industry approval has not saved time. The company exists, the shares are issued, and none of it can legally receive foreign money until the approval that should have come first is obtained retroactively — if it can be obtained at all on the facts as filed. This is the single most common structural mistake in Nepal FDI entry, and it happens because the sequence looks, from the outside, like it should be flexible. It is not.

Prepared by Nishant Marasini and team · Position stated as at 22 September 2026

Four institutions are involved, in a fixed order, and each one checks that the previous step was completed correctly before it will act. Understanding why the order is fixed — not just what the order is — is what prevents the expensive restarts.

The order, and why it cannot be reshuffled

The sequence is: Department of Industry (DOI) approval, then Nepal Rastra Bank (NRB) registration of the approved foreign investment, then incorporation of the company at the Office of the Company Registrar (OCR), then PAN registration with the Inland Revenue Department, then opening the company's local bank account, then — only then — the actual inflow of capital from abroad.

Some investors reorder this because it seems more natural to incorporate the company first and sort out foreign investment approval afterward, since the company needs to exist before it can open a bank account. In practice, company name reservation and the drafting of incorporation documents can run alongside the DOI application, but the DOI approval letter itself has to be in hand before OCR will register a company with foreign shareholding. Nothing beyond that can be reversed:

• DOI approval must exist before NRB registration. Nepal Rastra Bank's Foreign Investment and Foreign Loan Management Bylaws require the DOI approval letter as a precondition for registering the investment. NRB does not independently assess whether foreign investment should be allowed in a given sector or amount — it registers what DOI has already approved.
• NRB registration must exist before capital inflow. A local bank cannot credit an inward foreign remittance to a Nepali company's account as capital contribution unless that specific investment is registered with NRB. Money that arrives before registration sits in a suspense position, or gets treated as a loan or an unexplained receipt, and the paperwork to reclassify it after the fact is materially worse than doing the registration first.
• Company incorporation at OCR generally follows the DOI approval letter, because OCR's foreign-shareholding checks look for that letter as supporting documentation, and because the approved investment amount, sector, and shareholding structure in the DOI letter need to match what gets filed at OCR to the rupee and the percentage point.

Investors who have registered companies in Singapore, the UAE or India sometimes assume Nepal works the same way — incorporate first, sort out the rest later. It does not, and the gap between the two models is where most avoidable delay originates.

Step 1: Department of Industry approval

The application goes to DOI (or, for larger proposed investments, it is routed to the Investment Board Nepal, but most FDI into small and medium enterprises is a DOI matter). The core documents are the project's business plan, a joint venture agreement or shareholders' agreement if there is more than one investor, the passport or company registration certificate of each foreign investor, a board resolution from the foreign parent authorising the investment and naming the individual empowered to sign in Nepal, and audited financial statements or bank solvency certificates evidencing the investor's capacity to bring in the proposed capital.

Two things decide whether this application clears in one pass. First, the amount each individual investor is bringing must meet the statutory minimum threshold set for foreign investment — a joint venture with several small investors fails if any single investor's contribution, calculated after the shareholding split, falls under that floor. Second, the proposed business activity has to sit inside a sector foreign capital is actually permitted to enter; Nepal maintains a negative list of activities closed to foreign investment, and a business plan that blends a permitted activity with something on that list — a manufacturing company that also plans small-scale retail trading, for instance — gets bounced back for revision rather than approved with a caveat.

Realistic timeframe for a clean application: three to six weeks from filing to approval letter, longer if the sector requires a recommendation from a separate line ministry (education, health, and several natural-resource sectors route through an additional layer).

Step 2: NRB registration of the foreign investment

With the DOI approval letter in hand, the investment gets registered with Nepal Rastra Bank's Foreign Investment Division. This is a distinct filing, not a formality that rides on the DOI approval automatically — NRB reviews the same investment amount and structure independently and issues its own registration, which is what the receiving bank will ask for before it accepts the inward remittance. Expect one to three weeks for a straightforward case.

Step 3: Incorporation at the Office of the Company Registrar

Company name reservation at OCR is where a surprising number of filings stall. The proposed name has to be reserved and cleared before the incorporation documents — memorandum and articles of association, the DOI approval letter, identity documents of shareholders and directors — are filed. A name that is deceptively similar to an existing registered company, or that uses a restricted word without the required consent, gets rejected at reservation stage, and if that rejection happens after the DOI approval was already issued for a specific company name, some investors find themselves needing to re-file with DOI as well if the name was material to the application. Reserving the name early, before finalising the DOI application, avoids this.

Incorporation itself, once documents are complete and the name is cleared, typically takes one to two weeks.

Step 4: PAN registration

The incorporated company registers for a Permanent Account Number with the Inland Revenue Department. This is usually the fastest step in the sequence — a matter of days — but it cannot happen before incorporation, since PAN registration requires the company registration certificate.

Step 5: Bank account and capital inflow

With PAN in hand, the company opens its operating bank account. The foreign investor then wires the approved capital from abroad, citing the NRB registration reference, and the receiving bank credits it as share capital rather than as an unexplained inward remittance. This is the step that fails hardest when the sequence above was not followed correctly — banks in Nepal are conservative about crediting foreign inflows as capital without the NRB paperwork matching exactly, in both amount and investor name, what was registered.

Where filings actually go wrong

Beyond the ordering mistake, three failure points come up repeatedly:

• Incomplete or improperly authenticated board resolutions from the foreign parent. A board resolution that does not name a specific individual with authority to sign the Nepal application, or that has not been notarised and consularised (or apostilled, where the home country is a Hague Convention member) to the standard Nepali authorities expect, is returned for correction — costing another round trip to the parent company's board.
• Sector classification mismatches between the business plan and Nepal's industrial classification. A business plan written in general commercial language does not map itself onto Nepal's specific industry codes. If the activity described does not clearly correspond to a permitted classification, the reviewing officer either seeks clarification or rejects it, and either outcome adds weeks.
• Company name conflicts discovered late. As above — reserve the name at OCR before finalising the DOI filing, not after.

Realistic total timeline

Investors should plan for eight to twelve weeks from a complete, well-prepared DOI application to funded operating bank account, assuming no sector-specific ministry referral and no document deficiencies along the way. Applications with incomplete documentation, contested name reservations, or sector ambiguity routinely run past four months. The process rewards front-loading the paperwork — a complete board resolution, a business plan mapped to the correct sector classification, and a cleared company name before the first application is filed — far more than it rewards speed at any individual step.