NGO & INGO Compliance and Renewal in Nepal

This article provides a comprehensive overview of the compliance obligations and renewal steps for NGO and INGO Compliance in Nepal. These organizations must adhere to various compliance requirements and renewal processes mandated by Nepalese law.

How to Renew NGOs & INGOs in Nepal?

• Step 1: Preparation of Required Documents
• Step 2: Submission of Application to DAO
• Step 3: Recommendation from Local Ward Office and DCC
• Step 4: Renewal with Inland Revenue Department
• Step 5: Renewal with Social Welfare Council (Every 3 Years)

The renewal process for NGOs and INGOs in Nepal involves several steps and interactions with different government bodies. Here is a detailed breakdown of the renewal process:

Step 1: Prepare Required Documents

The first step is to gather all necessary documents for renewal. These typically include:

• Annual progress report
• Audited financial statements
• Tax clearance certificate
• Minutes of annual general meeting
• Updated executive committee details
• Recommendation letters from relevant authorities

Step 2: Submit Application to District Administration Office

NGOs must submit a renewal application along with required documents to the District Administration Office (DAO) where the organization is registered. The DAO reviews the application and may request additional information if needed.

Step 3: Obtain Recommendations

NGOs need to obtain recommendation letters from the local Ward Office and District Coordination Committee (DCC) as part of the renewal process. These letters affirm that the organization has been operating in compliance with local regulations.

Step 4: Renew with Inland Revenue Department

NGOs must renew their registration with the Inland Revenue Department (IRD) annually by submitting tax returns and obtaining a tax clearance certificate.

Step 5: Renew with Social Welfare Council

INGOs and NGOs receiving foreign funding must renew their affiliation with the Social Welfare Council (SWC) every three years by submitting project proposals, progress reports, and other required documents.

NGO and INGO Compliance in Nepal

Registered NGOs and INGOs in Nepal must fulfill several ongoing compliance obligations to maintain their legal status and continue operations. The key compliance requirements include:

DAO Renewal

NGOs must renew their registration with the District Administration Office annually. This involves submitting an application along with the organization’s annual report, audited financial statements, and proof of tax clearance. The DAO reviews these documents to ensure the NGO is operating in accordance with its stated objectives and Nepal’s laws. Failure to renew with the DAO can result in the NGO’s registration being suspended or cancelled.

Ward Renewal

NGOs are required to renew their registration with the local Ward Office each year. This process typically involves submitting a letter requesting renewal, along with documents showing the NGO’s activities in the local area. The Ward Office may conduct a site visit or request a presentation on the NGO’s work before providing a recommendation letter for renewal. This local-level renewal helps ensure NGOs remain accountable to the communities they serve.

DCC Renewal

The District Coordination Committee (DCC) renewal is another annual requirement for NGOs in Nepal. NGOs must submit their annual reports, financial statements, and details of planned activities to the DCC. The DCC reviews these documents and may provide feedback or recommendations to the NGO. This renewal process helps coordinate NGO activities at the district level and ensures alignment with local development priorities.

IRD Renewal

All NGOs must renew their registration with the Inland Revenue Department (IRD) annually. This involves filing tax returns, submitting audited financial statements, and obtaining a tax clearance certificate. NGOs are required to maintain proper financial records and comply with Nepal’s tax laws. The IRD renewal is crucial for maintaining the NGO’s tax-exempt status and ensuring financial transparency.

Social Welfare Council

NGOs and INGOs receiving foreign funding must renew their affiliation with the Social Welfare Council (SWC) every three years. This process involves submitting comprehensive project proposals, progress reports, and financial statements. The SWC evaluates the organization’s contribution to Nepal’s development goals and ensures compliance with regulations governing foreign-funded projects. This renewal is critical for organizations engaged in international partnerships or receiving overseas grants.

Pass Proposal through SWC to Introduce Funds

NGOs and INGOs must submit project proposals to the SWC for approval before introducing foreign funds into Nepal. This requirement applies to new projects as well as extensions or modifications of existing ones.

The SWC reviews these proposals to ensure alignment with national development priorities and to prevent potential misuse of foreign funds. Organizations must provide detailed budgets, implementation plans, and expected outcomes as part of this process.

Submission of Accounts to DAO and Tax Office

NGOs are required to submit their annual accounts and financial statements to both the District Administration Office and the tax office. This submission typically includes audited financial statements, income and expenditure details, and a balance sheet.

Regular financial reporting helps maintain transparency and accountability in NGO operations. The DAO and tax office may scrutinize these documents to ensure proper use of funds and compliance with financial regulations.

Due Diligence & Regular Audits

NGOs and INGOs must conduct regular internal audits and be prepared for external audits by government authorities. This includes maintaining proper financial records, documenting all transactions, and implementing strong internal control systems.

Organizations should also perform due diligence on their partners, donors, and beneficiaries to prevent involvement in illegal activities or funding misuse. Regular audits help identify any financial irregularities and ensure compliance with accounting standards and legal requirements.

Appeal after Examination of Accounts

If the examining authority finds any discrepancies in an NGO’s accounts, the organization has the right to appeal the findings. The appeal process typically involves submitting a written explanation along with supporting documents to justify the questioned transactions or practices.

NGOs should be prepared to provide additional information or clarifications as requested. This appeal mechanism helps ensure fair treatment and allows organizations to address any misunderstandings or errors in the examination process.

Visa and Work Permits for Foreign INGO Representatives

INGOs must obtain proper visas and work permits for their foreign representatives working in Nepal. This process involves submitting applications to the Department of Immigration and the Department of Labour.

Required documents typically include the INGO’s registration certificate, project agreement with the SWC, and personal details of the foreign staff. INGOs must ensure their expatriate staff comply with Nepal’s immigration laws and renew their visas and work permits as required.

Read More:

• NGO Registration Process in Nepal
• INGO Registration in Nepal
• An Overview of NGO and INGO Law in Nepal
• Profit Not Distributing Company Registration in Nepal
• NGO and INGO Lawyer and Legal Services in Nepal

Also Read: Social Welfare Council Act, 1992 Associations Registration Act, 1977

Frequently Asked Questions

Contact NGO and INGO Lawyer in Nepal

Disclaimer: This material is presented solely for informational purposes, without constituting legal advice, counsel, or solicitation, and no liability shall arise from any actions, omissions, or reliance on its contents, directly or indirectly, in any manner whatsoever, irrespective of the jurisdiction or specific circumstances.