1. Introduction

Private Limited Company Registration in Nepal is the most preferred legal structure for startups, SMEs, foreign investors, IT companies, consultancies, trading businesses, and manufacturing enterprises. Governed primarily by the Companies Act, 2063 (2006), a Private Limited Company offers limited liability protection, separate legal identity, perpetual succession, and credibility in banking and contracts.

If you are planning to start a business in Nepal, understanding the legal framework, documents required, cost, timeline, and compliance obligations is essential. This step-by-step guide explains everything in simple and practical terms, based on Nepal’s current corporate laws and administrative practice.

2. Legal Framework Governing Private Limited Company in Nepal

Private Limited Companies in Nepal are regulated by the following major laws:

Primary Laws:

• Companies Act, 2063 (2006)

• Company Regulation, 2064

• Foreign Investment and Technology Transfer Act (FITTA), 2075 (if foreign investment involved)

• Industrial Enterprises Act, 2076

• Income Tax Act, 2058

• Value Added Tax Act, 2052

• Labor Act, 2074

• Social Security Act, 2074

• Electronic Transaction Act, 2063 (for online registration)

Other Applicable Laws:

• NRB Act (for certain regulated sectors)

• Banks and Financial Institutions Act (if financial business)

• Sector-specific licensing laws

3. Key Legal Provisions under Companies Act, 2063

Definition:

A Private Limited Company is a company:

• Having minimum 1 shareholder and maximum 101 shareholders

• Restricting the right to transfer shares

• Prohibiting public invitation for share subscription

Core Legal Characteristics:

• Separate legal entity

• Limited liability of shareholders

• Mandatory Memorandum and Articles of Association

• Minimum one director

• Company seal (optional but recommended)

4. Administrative Authority Involved

The main authorities involved in Private Limited Company registration in Nepal:

Primary Authority:

• Office of the Company Registrar (OCR), Tripureshwor, Kathmandu

Other Authorities:

• Inland Revenue Department (IRD) – PAN/VAT registration

• Local Ward Office – Business registration

• Department of Industry (DOI) – For foreign investment approval

• Nepal Rastra Bank (NRB) – For foreign capital repittance

• Social Security Fund (SSF) – Employee compliance

Most company registrations are now processed through the OCR online system.

5. What is a Private Limited Company in Nepal?

A Private Limited Company is a legally incorporated business entity where:

• Liability of shareholders is limited to their investment.

• Shares cannot be freely traded publicly.

• The company operates as a separate legal person.

• It can sue and be sued in its own name.

• It continues even if ownership changes.

It is ideal for:

• Startups

• Consulting firms

• IT companies

• Traders

• Manufacturing units

• Family businesses

6. Eligibility Criteria for Private Limited Company Registration

To register a Private Limited Company in Nepal:

Shareholders:

• Minimum: 1 person

• Maximum: 101 persons

• Can be Nepali or foreign (with approval)

Directors:

• Minimum 1 director required

• Must be legally competent person (18+ years)

Capital:

• No minimum capital requirement (except regulated sectors)

• Capital must be mentioned in Memorandum

Company Name:

• Must be unique

• Should not be similar to existing registered companies

• Must end with “Private Limited” or “Pvt. Ltd.”

7. Documents Required for Company Registration in Nepal

For Nepali Shareholders:

• Citizenship certificate copies

• Passport-size photographs

• Proposed company name (3 alternatives)

• Memorandum of Association (MOA)

• Articles of Association (AOA)

For Foreign Shareholders:

• Passport copy

• Board resolution (if corporate shareholder)

• Foreign Investment approval (if applicable)

• Notarized documents

• Source of investment disclosure

Additional Documents:

• Registered office address

• Consent letter from property owner

• Director consent letter

8. Step-by-Step Process of Private Limited Company Registration in Nepal

Step 1: Name Reservation

• Apply online at OCR portal

• Name approval usually within 1–3 working days

Step 2: Draft MOA and AOA

• Prepare Memorandum of Association

• Prepare Articles of Association

• Define objectives clearly (important for compliance)

Step 3: Online Application Submission

• Submit incorporation application via OCR system

• Upload required documents

• Pay government registration fee

Step 4: Verification by OCR

• Registrar examines documents

• May request clarification or modification

Step 5: Issuance of Incorporation Certificate

• Company Registration Certificate issued

• Company Registration Number assigned

Step 6: PAN Registration

• Register at Inland Revenue Department

• Obtain Permanent Account Number (PAN)

Step 7: Local Ward Registration

• Register business at local municipality/ward office

Step 8: Bank Account Opening

• Deposit paid-up capital

• Obtain bank statement

9. Cost of Private Limited Company Registration in Nepal

Government Fee (Based on Authorized Capital):

Additional Costs:

• Legal drafting fees

• Notary charges

• PAN/VAT registration

• Professional consultancy fees

Typical total cost ranges:
NPR 15,000 to NPR 50,000, depending on capital and professional involvement.

10. Timeline for Company Registration in Nepal

Foreign investment cases may take longer (2–6 weeks).

11. Post-Registration Compliance Obligations

After company registration, the following compliances are mandatory:

Annual Compliance:

• Annual General Meeting (AGM)

• Annual Return filing at OCR

• Tax Return filing at IRD

• Audit report submission (if applicable)

Ongoing Compliance:

• Maintain statutory registers

• Update share transfer records

• Renew business registration

• Social Security Fund registration (if employees)

• VAT return (if registered)

Non-compliance may lead to penalties and blacklisting.

12. FAQs – Private Limited Company Registration Nepal 

1. How long does it take to register a private limited company in Nepal?

It usually takes 5 to 10 working days if documents are properly prepared.

2. What is the minimum capital requirement in Nepal?

There is no mandatory minimum capital, except in regulated sectors.

3. Can a foreigner open a private limited company in Nepal?

Yes, under the Foreign Investment and Technology Transfer Act (FITTA), 2075, with approval from the Department of Industry.

4. Is physical presence required for company registration?

Most processes are online, but document verification or bank procedures may require physical presence.

5. What is the difference between Private Limited and Public Company in Nepal?

Private companies restrict share transfer and cannot invite public subscription, while public companies can.

6. Is VAT registration mandatory?

VAT registration is mandatory if annual turnover exceeds the prescribed threshold under VAT Act.

7. Can one person register a company in Nepal?

Yes. A single shareholder company is legally permitted.

8. What happens if annual returns are not filed?

The company may face penalties, late fees, and possible deregistration.

13. Disclaimer

This article is for informational and educational purposes only and is based on prevailing laws of Nepal including the Companies Act, 2063. Legal provisions may change through amendment or administrative practice. For tailored legal advice, foreign investment structuring, or compliance support, consult a licensed corporate lawyer or professional advisor in Nepal.

Final Expert Insight

Registering a Private Limited Company in Nepal is legally straightforward but strategically significant. Proper drafting of objectives, capital structuring, and compliance planning at the initial stage can prevent future legal complications.

If structured correctly, a Private Limited Company offers strong liability protection, tax planning opportunities, and investment readiness in Nepal’s growing business environment.