Monday, July 30, 2012

Company Registration in Nepal: The Basics




1. Types of Companies in Nepal


Before registering a company you have to decide what kind of company is suitable for your business needs. Currently, three types of companies can be established in Nepal according to the Companies Act 2006 (2063 B.S.). They are :-
  • Private limited company - requires only one shareholder or promoter 
  • Public limited company - requires at least seven shareholders and promoters 
  • Non-profit company - requires at least five members
A minimum paid up capital of 10 Million Nepalese Rupees is required to register a public limited company. Private company does not have any minimum capital requirements.

A non-profit company does not have shareholders, it only has members and does not require any form of minimum capital.

 

2. Documents Required for Registration


The following documents are required:
  • Memorandum of association of proposed company 
  • Articles of association of proposed company 
  • Copy of the agreement such as Joint Venture Agreement or Memorandum of Understanding (if any) 
  • Approval licence if a company is intending to operate a business regulated under Industrial Business Act 
  • Incorporation decision of its board of directors and other major documents if the promoter is a company
  • Approval under the Foreign Investment and Technology Transfer Act if the promoter is a foreign national or foreign companyIn addition
  • Powers of Attorney are required if promoters want to send a representative rather than appear in the Office of the Companies Registrar themselves.

 

 3. Costs


The government fees are based on Authorised Capital and are charged are as follows (for Nepali nationals opening a private limited company, please note that this may change in the future):
  • Up to NPR 100,000 (authorized capital): NRS 1,000.
  •  NRS 100,001 to NRS 500,000: NRS 4,500.
  •  NRS 500,001 to NRS 2,500,000: NRS 9,500.
  •  NRS 2,500,001 to NRS 10,000,000: NRS 16,000.
  •  NRS 10,000,001 to NRS 20,000,000: NRS 19,000.
  •  NRS 20,000,001 to NRS 30,000,000: NRS 22,000.
  •  NRS 30,000,001 to NRS 40,000,000: NRS 25,000.
  •  NRS 40,000,001 to NRS 50,000,000: NRS 28,000.
  •  NRS 50,000,001 to NRS 60,000,000: NRS 31,000.
  •  NRS 60,000,001 to NRS 70,000,000: NRS 34,000.
  •  NRS 70,000,001 to NRS 80,000,000: NRS 37,000.
  •  NRS 80,000,001 to NRS 90,000,000: NRS 40,000.
  •  NRS 90,000,001 to NRS 100,000,000: NRS 43,000.
  •  More than NRS 100,000,000: NRS 43,000 plus NRS 30 for each additional NRS 100,000.

Other costs for registration, the main one being legal fees, varies with the type of businesses, complexity of the relationship between the shareholders, and on many other factors. For a small company for Nepali nationals with no complications and where no additional services such as drafting extra contracts (labour contracts, lease contracts) and tax registration and planning are being offered, it should not cost more than NRS 20,000-30,000 per Company. 

When complex issues are involved, and the needs of multiple investors have to be balanced, legal fees charged by specialised corporate lawyers can be more expensive, but mistakes in the initial stages may cost you more in the future. Therefore, it is advised not to compromise on the quality of legal advice if you are a serious investor.

4. Time


The registration takes on average 15 days.


We will be constantly adding and updating the information in this blog on this issue. If you need more information on registering a company in Nepal or any information related to company law in Nepal please contact us at info@neupanelegal.com or visit us at www.neupanelegal.com

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  39. All you have to spend on legal processing for registration varies from 5000 to 10000.I have done for 5000. No need to worry just go to the related department (i.e kuleshowor in kathmandu) and you will find many broker out there for help. Just ask one of them for process, with in a day or next day you get your company registered.Best of luck for your entrepreneurship.

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