A foreign company can use a Nepal branch office to carry out an approved business activity or project in its own name without incorporating a separate Nepali company. The branch remains part of the foreign parent, but it must first obtain the relevant investment or competent-authority permission and then register with the Office of the Company Registrar (OCR). It can earn income in Nepal only within the registered scope; a liaison office cannot earn income at all. Companies Act, 2063, section 154
Key highlights
- A branch is an extension of the foreign parent, not a separate Nepal-incorporated company.
- The branch can undertake only the same type of business or transaction the parent carries on in its home jurisdiction. Companies Act, 2063, section 154(8)
- Branch establishment is recognised as a form of foreign investment, so the approval route and investment conditions matter before the OCR filing. FITTA, section 8
- OCR must register a complete application or give written reasons for refusal within 30 days; its decision period is only one stage of the overall process. Companies Act, 2063, section 154(4)–(5)
- The parent needs certified, translated corporate documents, a Nepal-based authorised recipient and a compliant power of attorney.
- A branch needs PAN and continuing tax, audit and OCR reporting discipline after registration.
Branch, liaison office or subsidiary: decide before you apply
The right presence depends on the activity—not simply on whether the parent wants an office in Nepal.
| Presence model | Can it earn income in Nepal? | Legal relationship | Typical fit |
|---|---|---|---|
| Liaison office | No | Registered foreign-company presence | Non-commercial representation, coordination and information gathering. |
| Branch office | Yes, within registered scope | Part of the foreign parent | A defined approved contract, project or parent-company activity. |
| Foreign-invested subsidiary | Yes | Separate Nepali company | A continuing operating business funded by foreign equity. |
The Companies Act prohibits a liaison office from income-earning activity, whereas a branch may carry on the parent’s home-country type of business once properly registered. Companies Act, 2063, section 154(6), (8)
If your company needs a separate Nepal entity for a longer-term business rather than a parent-company branch, assess the foreign direct investment in Nepal route. For a branch, the proposed project or transaction, investment route and OCR filing should be planned together.
When a foreign company can use the branch route
A foreign company must register a branch or liaison office before carrying on a business or transaction in Nepal, or before maintaining an office here. The Act also captures an office operating for one month or more and a person appointed for regular contact in Nepal. Simply owning shares in a Nepali company, lending it money or taking part in management with the applicable approval does not by itself create this registration requirement. Companies Act, 2063, section 154(1)
For a branch, the proposed Nepal activity must match the type of business the parent actually conducts in its country of incorporation. The registration does not authorise unrelated work just because the parent has obtained a Nepal branch certificate. Companies Act, 2063, section 154(8)
In practice, an underlying government selection, contract or project can be central to the route. Where a government body or competent authority has selected the foreign company for specific work or contracted with it directly, that selection or contract counts as the permission required for branch or liaison registration. Companies Act, 2063, section 154(3) explanation
Approvals and investment position before OCR
Branch establishment is a recognised form of foreign investment under the Foreign Investment and Technology Transfer Act, 2075 (FITTA). The foreign-investment authority must therefore be considered before filing at OCR. FITTA, section 8
The Department of Industry (DOI) approves foreign investment applications up to NPR 6 billion; applications above that level go to the Investment Board Nepal. FITTA provides a seven-day decision or written-refusal period for a complete application. Neither point means every branch is approved within seven days: the clock begins only once the application is complete, and sector questions or incomplete documents can change the real schedule. FITTA, sections 15 and 17
The general notified minimum foreign-investment threshold is NPR 20 million. DOI’s published guidance says IT-sector investment through the Automatic Route has no minimum, but the sector and route must be confirmed for the proposed branch before relying on that exception. DOI: Foreign Investment in Nepal—A Synopsis
Before funds arrive in Nepal, the investor must notify Nepal Rastra Bank in writing and give a self-declaration that the funds are from a legitimate source; investment is remitted through the banking system in convertible foreign currency. FITTA, section 16
Documents to prepare for branch registration
OCR requires the approval or permission from the competent body, the prescribed fee and the foreign parent’s supporting documents. Prepare a consistent set before filing. Companies Act, 2063, sections 154–155
| Document or information | Why OCR needs it |
|---|---|
| Permission for the Nepal business or transaction | Shows the activity has the required approval basis. |
| Parent charter, incorporation certificate, memorandum and articles, with Nepali translation | Establishes the parent’s legal existence and activities. |
| Parent-company profile | Records its office, incorporation date, paid-up capital and objectives. |
| Principal-officer details | Identifies directors, managers, secretary or equivalent officers. |
| Nepal authorised recipient and power of attorney | Ensures legal notices can be served in Nepal on behalf of the parent. |
| Nepal principal office address and expected start date | Records the local branch presence. |
| Proposed investment and transaction details | Connects the branch to the approved activity. |
| Director declaration | Confirms the filed particulars are correct. |
Source: Companies Act, 2063, section 155(1).
Foreign-issued documents must be certified under the parent company’s home-country law before submission. If a filed particular later changes, notify OCR within 35 days. The power of attorney must be executed under the parent jurisdiction’s formalities and state that service on the Nepal representative binds the company. Companies Act, 2063, sections 155(2)–(3) and 157
Branch office registration process in Nepal
- Define the approved Nepal activity. Confirm it fits the parent’s existing business and identify the project, contract or authority permission supporting it.
- Determine the investment approval route. Confirm whether DOI, Investment Board Nepal or another competent body is responsible and whether a sector approval is also needed.
- Prepare parent-company documents. Complete certification, Nepali translations and the power of attorney before filing.
- Obtain the investment or competent-authority permission. Keep the approved activity and investment figure consistent with the OCR application.
- File at OCR. Submit the prescribed application, approval, parent documents and fee.
- Respond to examination and obtain the certificate. OCR must register the branch or state its reason in writing within 30 days after receiving a complete application. Companies Act, 2063, section 154(4)–(5)
- Set up PAN, banking and any conditional registrations. Registration at OCR does not replace tax, sector, local or immigration requirements.
- Operate within scope and maintain annual filings. This protects the integrity of the approved branch route and later repatriation records.
Once registered, the branch’s invoices, receipts and letterheads must state the country where the parent is established and the Nepal registration number. The branch cannot issue shares or debentures in Nepal. Companies Act, 2063, section 154(9), (11)
OCR registration fees and what they mean for budgeting
OCR calculates the branch registration fee from the proposed investment stated in the application.
| Proposed investment | OCR registration fee |
|---|---|
| Up to NPR 10,000,000 | NPR 15,000 |
| NPR 10,000,001–100,000,000 | NPR 40,000 |
| NPR 100,000,001–200,000,000 | NPR 70,000 |
| NPR 200,000,001–300,000,000 | NPR 100,000 |
| NPR 300,000,001–400,000,000 | NPR 130,000 |
| NPR 400,000,001–500,000,000 | NPR 160,000 |
| Above NPR 500,000,000 | NPR 160,000 plus NPR 3,000 for every additional NPR 10,000,000 |
| No investment amount stated | NPR 100,000 |
Source: OCR revenue and fee schedule.
This is an OCR government fee, not the foreign-investment amount, DOI-related charge, tax liability, authentication cost, translation cost or professional fee. The proposed investment should align with the approval route; it should not be treated as a number to reduce solely for the registration fee.
Tax, accounting and repatriation obligations
A registered Nepal branch is a foreign permanent establishment for income-tax purposes. Its Nepal income is assessed separately from the parent’s worldwide income. The ordinary corporate rate is generally 25%; the cited source identifies 30% for banks, financial institutions, general insurers and petroleum operations. Income sent to the head office is treated for this purpose as a distribution and the cited rate is 10%. Confirm the rate for a particular remittance with the Inland Revenue Department or a tax adviser. Income Tax Act, 2058, section 68 and Schedule 1
After OCR registration, obtain a PAN and register for VAT where the activity or turnover requires it. A branch must prepare and audit annual financial statements of its Nepal transactions and submit them to OCR within six months after the end of the financial year. It must also submit the parent company’s annual financial statements and audit report within three months after they are finalised under home-country law. Companies Act, 2063, section 156(1)–(2)
Repatriating branch investment or earnings requires a separate Nepal Rastra Bank foreign-currency exchange application. The cited Schedule 9A lists supporting records including the original investment approval, latest audited financials, current tax clearance, Credit Information Bureau evidence and proof that applicable taxes have been paid. NRB Foreign Investment and Foreign Loan Management Bylaw, 2021, Schedule 9A
Keep immigration separate from registration
Registering the branch does not itself permit foreign staff to live or work in Nepal. Where the parent plans to post foreign representatives, assess the separate business visa support in Nepal route after the branch’s investment position is in place.
Plan the branch’s full lifecycle
When the approved project or contract ends, plan closure rather than leaving the branch inactive. The company applies to OCR with evidence that no liability remains outstanding in Nepal. OCR then publishes a notice inviting claims before removing the branch from the register. Companies Act, 2063, section 158
Common mistakes that interrupt the route
- Treating the branch certificate as authority for business outside the parent’s registered home-country activity.
- Starting OCR work before the approval or contract basis is settled.
- Submitting parent-company documents that are not certified, translated or consistent with the approval application.
- Planning only for incorporation and missing PAN, annual audit, OCR filings and repatriation records.
- Treating the seven-day DOI decision period or 30-day OCR period as a total operational timeline.
How Company Darta Nepal can help
A branch route can involve overlapping foreign-investment, parent-document, OCR, bank and tax-registration tasks. Company Darta Nepal can help a foreign company review the route, prepare the agreed foreign documents and coordinate the agreed branch-office approval and filing steps. The approving authority, OCR and any sector or immigration regulator make their own decisions.
Review Company Darta Nepal’s branch and liaison office registration service.
Final preparation checklist
- Confirm the business activity matches the foreign parent’s existing operations.
- Identify the investment or competent-authority approval and any sector permission.
- Prepare certified parent documents, Nepali translations and a valid power of attorney.
- Align the approved activity and investment details with the OCR filing.
- Budget separately for OCR, foreign-document preparation, tax and operational compliance.
- Establish account, audit and tax-clearance records from the start for future reporting and repatriation.
