Nepal client case studies in 2023
Setting up a Nepalese branch for an Indian IT services company at the peak of Covid -19 pandemic in 2021
Since 2003, Healy Consultants Group assists multinational Clients with business set up in Nepal including i) company/branch incorporation ii) corporate bank account opening iii) company secretary and legal registered office iv) regulatory license applications v) Nepal tax registration vi) assistance to source physical office premises or virtual office address and vii) employee recruitment and visas.
In September 2020, our US Client approached us to i) register a Nepalese branch for their Indian company and ii) open an international, preferably a Nepalese corporate bank account. Our Client has an IT services company that has global operations.
After a brief call with Mr. Apurv Trivedi, our Client settled Healy Consultants Group’s Nepal branch incorporation fees. These fees include i) our time to incorporate a branch for the India entity ii) tax registrations iii) bank account opening and iv) registered legal address and provision of registered agent.
- The Client engaged us on 16 September 2020. We agreed a payment installment plan for the engagement. Upon payment of the first installment, we sent our Client a receipt, and we were then able to begin the engagement;
- Immediately thereafter, we conducted a video call to discuss and agree i) the optimum corporate structure and ii) simple, practical strategies to legally maximize the chances of approval of the branch set-up by the Nepal government and iii) and corporate bank account opening strategy and iv) engagement deadlines and mile stones and v) the advantages of a Fast Nominee Solution and vi) potential engagement challenges;
- Simultaneously, our Client and Staff discussed i) doing business in the Nepal and ii) filling obligations and iii) permanent establishment and nexus and iv) tax liabilities and v) annual personal income tax obligations and vi) other business matters;
- I e-mailed our Client a detailed engagement project plan outlining i) total expected Nepalese branch incorporation fees and bank account opening fees ii) documents required to progress the incorporation and bank account opening process iii) a breakdown of weekly and monthly deliverables iv) an estimated timeline to complete the engagement and v) any expected engagement problems and solutions.
- Following completion of the above, I crafted a detailed engagement project plan, to help our multinational Client visualise the engagement over the coming months. As a result, our Clients can prepare the necessary documents so that our team can complete the engagement in a timely manner;
- Simultaneously, our Client supplied us the required Know Your Customer due diligence documents;
- My Staff and I were now ready to project manage the Nepal branch engagement;
Nepal branch incorporation
- Upon review of the Client’s Indian company’s memorandum of articles, Apurv pointed it out to our Client that some of the business activities mentioned such as i) real-estate and ii) running hostels/retirement centres are on the negative list of FDI for Nepal. Consequently obtaining FDI approval for a branch for Client’s India entity by Department of Industry is highly unlikely.
- Over the next 3 weeks, Apurv supplied our Client with multiple solutions to bypass this problem to set-up their branch in Nepal. After a detailed discussion, our Client agreed to set-up a new entity in India with memorandum of articles aligned to Apurv’s guidance to maximize the chances of Nepal branch approval as well as not compromising our Client’s ability to do business in Nepal and India.
- Our Client supplied the corporate documents of the new Indian entity set-up as per Apurv’s guidance. Thereafter, Apurv prepared the branch incorporation documents and sent them to our Client to complete, sign and courier the originals to our Nepal affiliate office.
- Once our Client supplied the originals of the signed incorporation documents, Apurv completed a quality company registration application and submitted the same to Office of the Company Registrar and Ministry of Communication and Information Technology. To facilitate incorporation, Healy Consultants Group agreed to provide our local representative services to the Client at no cost for up to 3 months.
- Government of Nepal announced a lock down of Kathmandu as a public health measure to help slow the spread of COVID-19. Healy Consultants Group continued to regularly communicate with the Government offices, with the hope of reaching any employee working there and were able to schedule a meeting with Ministry of Communication and Information Technology (MoIT) as soon as Nepal Government.
- Within 3 weeks, after multiple rounds of to-and-fro and follow-ups with the Nepal Ministry of Communication and Information Technology (MoIT), Healy Consultants Group received approval for setting up a Branch office for our Client’s India business.
- We then emailed our Client the Nepalese branch incorporation documents including, i) Certificate of Registration, ii) PAN Registration;
- After immediately securing the company numbers, Healy Consultants Group applied for a tax registration for our Client’s business with Nepal Inland Revenue Department. Within 1 week our Client’s application was approved and our Client’s company is now registered for tax in Nepal.
- Throughout the engagement, I supplied our USA Client with a weekly detailed engagement status update including i) quality deliverables and ii) problems and solutions;
- During the company registration process, our Staff and USA Client agreed the Nepal corporate bank account opening strategy;
- Immediately thereafter, my Staff and I approached multiple Nepal banks to secure a welcome email from a bank officer; inviting our Client to submit an accurate and complete corporate bank account opening application.
Nepal corporate bank account opening
- To increase the probability of successful corporate bank account approvals, my team and I prepared a detailed business plan to submit to interested banks. This business plan included i) details on the company’s core activities ii) financial projections for 3 years iii) global industry analysis and iv) corporate structure;
- I finalized the business plan with our Client’s input, and e-mailed the same for e-signature;
- I then prepared complete bank account opening forms and submitted them to at least 10 different banks in the Nepal, with a view to receiving their confirmation that they welcome an application from my Client’s company.
- I shared with our Client a list of Nepal banks that had been contacted and had shown interest in onboarding their business.
- Within 2 weeks, we received preliminary interest from one bank, and I was able to arrange for the Client to have a call with the bank officer.
- Nepalese bank’s require the corporate account signatory to travel to Nepal for a face to face meeting before the appointment. Due to spread of COVID-19 and prevailing travel restrictions, our Client could not travel to Nepal for the foreseeable future. Healy Consultants Group offered to open a corporate account with local legal representative for the branch and our Client could be appointed as a signatory when the travel restrictions are eased.
- Our Client agreed with our recommended approach and decided to appoint their affiliate as the legal representative to open a corporate bank account. Once our Client selected their preferred corporate banking option, I prepared corporate bank account opening forms for our Client’s preferred bank and emailed our Client the same for review and input.
- We advanced client’s application with our client’s preferred bank and set-up a face-to-face meeting with our Client’s legal representative and Nepalese banks to complete the corporate account opening process.
- Within 2 weeks thereafter, the bank sends the account numbers directly to our Client.
- Our Client received internet banking access within 1 week of making the initial deposit to the corporate account. Our Client could now access their bank account remotely from anywhere in the world.
- Following engagement completion, Healy Consultants Group couriered a full company kit to our Client, including i) a Nepal branch Certificate of Registration, ii) PAN Registration iii) any banking documents in our possession;
- Simultaneously, I emailed our Client a proforma Nepal branch sales invoice on our Client company headed stationery; complying with Nepal commercial law including i) company name and number and ii) corporate tax number and iii) legal registered office address and iv) multi-currency corporate bank account numbers;
- For Staff learning purposes, we requested our USA Client supplied for engagement feedback;
- Our Business Website Department also requested a professional reference from our Client as well as an online review;
- Annually thereafter, Healy Consultants Group in-house Accounting and Tax Department assists our Client timely accurately and completely discharge their Nepal monthly, quarterly and annual reporting obligations.