As per Section 154 (1) of the Nepalese Companies Act, 2006, no foreign company can carry out its business transaction in Nepal without registering its branch company in Nepal. A foreign branch company can only perform activities that are allowed in Nepal, similar to the objective of the foreign company. The foreign company who conducts any business transaction for a continuous period of one month from any office established in Nepal or any office or place used for that purpose or appoints any person for regulate contact or obtains services from any person for regular communication, such foreign company shall be deemed to have conducted business or established a liaison office in Nepal.
This Article provides a step-by-step detailed guide into the legal & regulatory aspects of registering a Branch Office in Nepal. Prime Law Associates is an internationally recognized Law Firm in Nepal serving with 100 Years of combined expertise. The Firm specializes in International Law, Foreign Direct Investment & Regulatory Approvals. The Firm has a large team of expert lawyers to provide an effective Branch Office Registration Service in Nepal. The Firm can be contacted through the following:
Requirements for Foreign Branch Registration
To register a branch office in Nepal, foreign companies must meet several key requirements:
- The parent company must be duly registered and in good standing in its home country.
- A designated representative in Nepal with power of attorney must be appointed.
- Minimum capital requirements as prescribed by the DOI must be met.
- The proposed activities must align with Nepal’s foreign investment policies.
- Necessary approvals from relevant government agencies must be obtained.
- A local office address in Nepal must be established.
- Required documents like certificate of incorporation, memorandum and articles of association must be submitted.
- The branch must commit to maintaining proper books of accounts in Nepal.
Foreign Branch Office Registration Lawyer in Nepal
We have extensive experience in registering branch offices across various sectors including manufacturing, trading, IT/software, consulting, and infrastructure. Our in-depth knowledge of Nepali laws and regulations enables us to navigate the registration process smoothly and avoid potential pitfalls. We keep our clients informed at every stage and work diligently to complete the registration in the shortest possible time. Our competitive fees and personalized service make us the preferred choice for foreign companies establishing a presence in Nepal.
Amit Karna
Amit has regular experience of assisting foreign companies enter into Nepal. He has been engaged in several branch office registration projects in Nepal
Deepak Khanal
Deepak is an expert of International Law & engaged with the Firm in Foreign Direct Investment & Branch/Liaison Office Registration.
Documents required for Branch Office Registration in Nepal
- The permission/approval issued by the competent authority to the foreign company to operate the business in Nepal
- Photocopies of certificate of incorporation, memorandum of association, and articles of Association
- Photocopies of translation of the certificate of incorporation, memorandum of association, and articles of association into the Nepali language with Notary Public
- Full name and address of the registered office of the company and principal place to its business, the date of incorporation of the company, its issued capital, and details of the main objectives
- Details regarding nationality, name, and address of the directors, manager, company secretary, or chief officer of the company
- Name and address of the representative of the company resident in Nepal
- If the company intends to operate business or transaction in Nepal, details of the proposed investment and transaction or business to be carried out by the Company
- If the company intends to operate a business in Nepal, purpose Date of commencement in Nepal
- Declaration made by the directors or representative of directors on behalf of the company that the documents and information submitted to the Office of the company registrar are true
- Power of Attorney
Other required details :
- Name and address of the person who is residing or staying in Nepal who is authorized by the company to receive any summons, notice, etc. issued in its name
- Full address of the principal place where the company carries on its transaction or business in Nepal and the place where the company is to carry on its transaction or business
- Details of the proposed investment and transaction
- Proposed Date of Commencement of its transaction in Nepal
Procedure for Branch Office Registration in Nepal
Step 1: Obtain Approval from Department of Industry
Step 2: Register with Company Registrar’s Office
Step 3: Obtain PAN and VAT Registration
Step 4: Opening of Bank Account
Step 5: Registration with Local Municipality
Other legal registration and works :
The branch office once registered at the Office of the Company registar shall be registered at the Ward office of Metropolitan/Municipality and needs annual renewal too. Branch offices are required to be registered at the Inland Revenue Department for tax purposes and will require to pay income tax in Nepal. The branch office is required to appoint the auditor and prepare the annual financial statement and such statement needs to be submitted to the Office of the Company Registrar annually.
Legal Framework for registration of Branch Office in Nepal
The primary legislation governing foreign branch office registration in Nepal is the Companies Act 2006. Specifically, Section 154 of the Act outlines the requirements and procedures for registering a foreign company branch. The Foreign Investment and Technology Transfer Act 2019 also contains relevant provisions, particularly for branches engaged in foreign direct investment projects.
Additionally, the Industrial Enterprises Act 2020 may apply for manufacturing or industrial branches. The Nepal Rastra Bank Act 2002 regulates branches of foreign banks and financial institutions. Foreign branches must comply with all applicable Nepali laws and regulations, including those related to taxation, employment, and foreign exchange.
Timeline for Foreign Branch Registration
The timeline for completing foreign branch office registration in Nepal ranges from 4-8 weeks. Obtaining initial approval from the Department of Industry usually takes 2-3 weeks. Registration with the Company Registrar’s Office can be completed in 1-2 weeks after receiving DOI approval. PAN/VAT registration generally takes 1 week. Opening a bank account and registering with the local municipality may require an additional 1-2 weeks.
Registration Costs and Fees
The costs for registering a foreign branch office in Nepal include:
- DOI application fee: NPR 20,000
- Company registration fee: NPR 50,000 for liaison office, NPR 100,000 for branch office
- PAN registration fee: NPR 1,000
- VAT registration fee: NPR 1,000
- Municipality registration fee: Varies by location, typically NPR 2,000-5,000
The branch office must also meet minimum paid-up capital requirements as prescribed by the DOI based on the nature of activities.
Types of Foreign Branch Offices
Commercial branch offices
Commercial branch offices can engage in revenue-generating business activities in Nepal. They can enter into contracts, provide services, sell products, and undertake projects. Commercial branches are allowed to repatriate profits to the parent company after paying applicable taxes in Nepal.
Representative offices
Representative offices serve as a liaison between the foreign parent company and Nepali businesses or government agencies. They cannot engage in commercial activities or generate income in Nepal.
Project offices
Project offices are temporary branch offices established to execute specific projects in Nepal. They are typically set up by foreign contractors or consultants engaged in development projects. Project offices can only undertake activities related to the designated project and must be closed upon project completion.
Regulatory Authorities
Department of Industry
The Department of Industry (DOI) under the Ministry of Industry, Commerce and Supplies is the primary regulatory authority for registering foreign branch offices in Nepal. The DOI reviews and approves branch office applications, issues registration certificates, and monitors compliance. It is responsible for implementing policies related to foreign investment and technology transfer.
Nepal Rastra Bank
Nepal Rastra Bank (NRB), the central bank of Nepal, regulates branches of foreign banks and financial institutions. NRB approval is required before registering such branches with the Company Registrar’s Office. NRB sets prudential norms, capital requirements, and operational guidelines for foreign bank branches.
Foreign Branch Office Registration Service in Nepal
Prime Law Associates offers comprehensive foreign branch office registration services in Nepal. Our experienced team of corporate lawyers and consultants can handle the entire registration process efficiently along with full compliance and all legal and regulatory requirements. Our services include:
- Advising on the most suitable branch office structure
- Preparing and submitting all required application documents
- Liaising with relevant government departments and authorities
- Obtaining necessary approvals and licenses
- Assisting with bank account opening and tax registrations
- Providing registered office address services
- Drafting employment contracts and internal policies
- Ongoing corporate secretarial and compliance support
We have extensive experience in registering branch offices across various sectors including manufacturing, trading, IT/software, consulting, and infrastructure. Our in-depth knowledge of Nepali laws and regulations enables us to navigate the registration process smoothly and avoid potential pitfalls. We keep our clients informed at every stage and work diligently to complete the registration in the shortest possible time. Our competitive fees and personalized service make us the preferred choice for foreign companies establishing a presence in Nepal.
Conclusion
Registering a foreign branch office in Nepal allows overseas companies to establish operations in Nepal without incorporating a separate legal entity.
Disclaimer: This article is for informational purposes only and shall not be construed as legal advice, advertisement, personal communication, solicitation, or inducement of any sort from the firm or any of its members. The firm shall not be liable for consequences arising out of any action undertaken by any person relying on the information provided herein.
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