Business entities in Nepal in 2023

Healy Consultants will assist our Clients with Nepal business setup after advising them on the optimum corporate structure. There are several ways of doing business in Nepal, the most common being the setting up of a limited liability company. Foreign entrepreneurs may also opt to set up a public limited company, a branch office or a representative office.

• Nepal limited liability company (LLC)

  • A Nepalese LLC is commonly used by entrepreneurs to setup an SME. An LLC must appoint at least 1 director and 1 shareholder who can be of any nationality. The minimum paid-up share capital required to complete the incorporation process is US$1;
  • An LLC in Nepal must maintain its books of accounts either in English or Nepali at its registered office in Nepal. The accounts must be maintained according to the double entry system of accounting in accordance with the Nepal Accounting Standards issued by the Institute of Chartered Accountants of Nepal (ICAN). Annual financial statements must be prepared and an audit must be submitted every year. A Nepal LLC must appoint an auditor from the list of auditors provided by ICAN.

  Nepal public limited company (PLC)

  • This business entity requires a minimum capital of US$100,500 for incorporation. The minimum paid-up capital can be higher for companies in the business of banking and financial services. Furthermore, at least 7 shareholders and 3 directors must be appointed, who can be of any nationality. A Nepal PLC must also appoint a resident company secretary. Healy Consultants will provide this service to our Client if required;
  • The Nepal PLC must hold its first annual general meeting within one year of incorporation and subsequently every year within six months after the close of its financial year. The board of directors must meet at least six times a year;
  • Similar to an LLC, PLCs in Nepal must also submit annual financial statements and an auditor’s report every year.

• Nepal branch office

  A Nepal branch office can be 100% foreign owned. The scope of operations for this entity will be defined by the parent company. Also, the branch office must have a registered office in Nepal as well as a resident agent appointed by the company to receive summons, notices etc. on behalf of the company.

• The Nepal representative office (liaison office)

  While the Nepal representative office can be 100% foreign owned, it is not allowed to carry out any income generating activities in Nepal. All expenses of the representative office are required to be met through inward foreign currency remittances. Consequently, this entity can only engage in i) market research and ii) promoting the business of the parent company.

• Table of comparison between Nepal entities

  	LLC	PLC	Branch	Rep Office
  How long to set the company up?	4 weeks	5 weeks	6 weeks	6 weeks
  How long to open company bank account?	4 weeks	4 weeks	4 weeks	4 weeks
  Legal liability?	Limited	Limited	Unlimited	Unlimited
  Wholly foreign owned?	Yes	Yes	Yes	Yes
  Minimum paid - up share capital?	US$1	US$100,500	US$1	US$1
  File annual tax return?	Yes	Yes	Yes	No
  Tax registration certificate required?	Yes	Yes	Yes	No
  Recommended corporate bank account?	Standard Chartered Bank Nepal Ltd	Nepal Bank Limited	Rastriya Banijya Bank Limited	Himalayan Bank Limited
  Does our Client need to travel?	No	No	No	No
  Resident director required?	No	No	No	No
  Resident shareholder required?	No	No	No	No
  Minimum directors allowed?	1	3	1	1
  Minimum shareholders?	1	7	1	1
  Tax identification code needed?	Yes	Yes	Yes	Yes
  Nepal resident company secretary required?	No	Yes	No	No
  Corporate shareholders allowed?	Yes	Yes	Yes	Yes
  Corporate director(s) allowed?	No	No	No	Yes
  Statutory audit required?	Yes	Yes	Yes	No
  Nepal corporate tax rate?	20%-30%	20%-30%	20%-30%	0%
  Annual financial statements required?	Yes	Yes	Yes	No
  Regulated by?	Department of Industry Nepal	Department of Industry Nepal	Department of Industry Nepal	Department of Industry Nepal
  Allowed to issue sales invoices?	Yes	Yes	Yes	No
  Allowed to sign contracts?	Yes	Yes	Yes	No
  Allowed to import and export goods?	Yes	Yes	Yes	No
  Can rent an office space in Nepal?	Yes	Yes	Yes	Yes
  Can buy Nepal property?	Yes	Yes	Yes	No
  Total Nepal business setup costs in yr. 1?	US$14,500	US$15,500	US$16,800	US$17,200
  Subsequent annual costs (incl. accounting and tax fee)?	US$3,400	US$3,400	US$3,400	US$3,400
  Sample engagement invoice?	View invoice PDF	View invoice PDF	View invoice PDF	View invoice PDF