How to Register a New Company in Nepal?
With all the information out there, when starting a new business you might stress with the legal procedure. Some people ignore the legal procedure, but some overstress on the situation. With the bad name the government offices have, people get intimidated too.
Without knowledge, yes, everything can become a hassle, and the registration process is no different. But with the knowledge of Companies Act 2006 (2063), the registration process of companies will get easier.
1. Types of Companies
- Public Company
- Private Company
- Non-Profit Company
Public Company is a company that can issue shares, bonds, or debentures available to the public whereas a private company cannot issue shares to the public. A public company should have at least 7 shareholders to no maximum limit, but it limits a private company to 101 shareholders. The minimum investment required for a public company is Rs.1,00,00,000 whereas for a private company it is Rs.1,00,000.
A non-profit company is a company that works on the development and promotion of any profession. It might also deal with protecting the collective rights and interests of the persons engaged in a specific profession or occupation. A company can be a Non- profit company if it operates for the attainment of any scientific, academic, social, public utility, or welfare aim on the condition of not distributing dividends.
2. Procedure of Registration
Registering a business will take a total time of about 7 to 10 business days. Here is the process that takes us more than a week.
- Reservation of company name
- Submission of a physical copy of documents
- Examination of submitted documents
- Issuance of company registration certificate
- Tax Registration (VAT/PAN)
- Enroll the employees in the Provident Fund
First, reserve your company name at the Office of Company Registrar (OCR) and then submit the physical copy of documents.
A professional will then verify and certify the memorandum and articles of association. Then you will get the certificate of company registration at the OCR.
Now the company must disclose the office address and withhold 15% tax of the rent for at least 3 months and deposit it to the tax office.
The company must also deposit the VAT if the company deals with goods or services that subject to VAT.
Finally, if the company has 10 or more employees than employees should get enrolled in the provident fund. Each employee should contribute 10% of the basic salary to the provident fund. The money deposited at the Provident fund will be released at the time of retirement.
3. Documents Required at the Time of Registration
These are the documents you will need at the time of registration.
| S.No. | Documents | Number of Copies |
|---|---|---|
| 1. | Application for registration | 1 set original |
| 2. | Memorandum of association and articles of association of the proposed company | 2 sets original each |
| 3. | Citizenship certificate in case of Nepalese / passport in case of foreigner. | 1 copy |
| 4. | Shareholder’s agreement (if any) | 1 copy |
| 5. | Copy of certificate of registration and other registration documents (memorandum of association, articles of association) of the shareholder is a company. | 1 copy |
| 6. | Corporate resolution of the shareholder if the shareholder is a company | 1 copy |
| 7. | Copy of prior approval of the DOI in case the shareholder is a foreign investor | 1 copy |
4. Registration Fee
You need to pay some amount of registration fee based on your total authorized capital. The registration fee is different for Private and Public companies.
For Private Company
| S.No. | Total Authorized Capital (in NPR) | Registration Fee (in NPR) |
|---|---|---|
| 1. | Up to 100,000 | 1,000 |
| 2. | 100,001 to 500,000 | 4,500 |
| 3. | 500,001 to 2,500,000 | 9,500 |
| 4. | 2,500,001 to 10,000,000 | 16,000 |
| 5. | 10,000,001 to 20,000,000 | 19,000 |
| 6. | 20,000,001 to 30,000,000 | 22,000 |
| 7. | 30,000,001 to 40,000,000 | 25,000 |
| 8. | 40,000,001 to 50,000,000 | 28,000 |
| 9. | 50,000,001 to 60,000,000 | 31,000 |
| 10. | 60,000,001 to 70,000,000 | 34,000 |
| 11. | 70,000,001 to 80,000,000 | 37,000 |
| 12. | 80,000,001 to 90,000,000 | 40,000 |
| 13. | 90,000,001 to 100,000,000 | 43,000 |
| 14. | Over 100,000,000 | 43,000 + 30 for each additional 100,000 |
For Public Company
| S.No. | Total Authorised Capital (in NPR) | Registration fee ( in NPR) |
|---|---|---|
| 1. | Up to 1,00,00,000 | 15,000 |
| 2. | 1,00,00,001 to 10,00,00,000 | 40,000 |
| 3. | 10,00,00,001 to 20,00,00,000 | 70,000 |
| 4. | 20,00,00,001 to 30,00,00,000 | 1,00,000 |
| 5. | 30,00,00,001 to 40,00,00,000 | 1,30,000 |
| 6. | 40,00,00,001 to 50,00,00,000 | 1,60,000 |
| 7. | Above 50,00,00,000 | 1,60,000 +3000 for each 1,00,000 |
Here you can see the process of registration of the company from the official government website.