An EV manufacturing or assembly business in Nepal needs more than company registration. A wholly Nepali-owned promoter must prepare the production project, register the industry with the appropriate federal or provincial authority, resolve environmental requirements before establishment or operation where they apply, and complete standards and transport steps before locally made vehicles can be sold. The precise route depends on the production process, vehicle category, capacity and location.
Key highlights
- Manufacturing and assembly are industrial activities; the process and fixed capital determine the classification and registration route.
- Incorporation and a detailed project proposal come before industry registration.
- Environmental approval can be a precondition to establishment, operation, commercial production or transaction; do not begin construction on the assumption it can be resolved later.
- Industry registration lets the plant operate as an industry, but does not by itself allow each vehicle to be sold or registered for the road.
- Customs, tax, standards, local premises and utility requirements are distinct workstreams, not consequences that automatically follow from industry registration.
Does this EV manufacturing route apply to you?
Use this route if your company will manufacture or assemble electric two-wheelers, three-wheelers or four-wheelers in Nepal. It covers a wholly Nepali-owned private company. Public charging operations and finished-vehicle dealership or import follow different routes.
The Industrial Enterprises Act, 2076 defines a manufacturing industry as producing goods using or processing raw, subsidiary or semi-processed materials. That framework can cover both a plant fabricating vehicle parts and bodies and a plant assembling a vehicle from imported completely knocked-down or semi-knocked-down kits (section 17(2)(b)).
The words "manufacturing" and "assembly" do not remove the need to clarify the actual process. Settle the components, amount of local fabrication, annual capacity, vehicle category, machinery list and site before filing. Those facts influence classification, environmental screening, utility demand, customs treatment and the later vehicle path.
Considering another EV business route? If you plan to bring finished vehicles into Nepal, read the EV import and dealership registration guide. If you plan to operate public charging infrastructure, read the EV charging station setup guide. If you have not chosen a route yet, compare all three in the electric vehicle business registration insight.
The approval gates: what must happen before each milestone
| Project milestone | Main work to resolve |
|---|---|
| Before industry application | Incorporate the company; prepare the project proposal; identify the registering authority and environmental position |
| Before construction or establishment where environmental review applies | Obtain the required IEE or EIA approval; if no assessment is required, prepare the required mitigation self-declaration |
| Before importing machinery or components | Confirm trade, tax and customs treatment for the exact machinery, component or kit |
| Before production and commercial operation | Complete industry-registration and applicable site, utility and environmental conditions |
| Before selling or registering a vehicle | Resolve applicable Nepal Standard position and Department of Transport Management vehicle-registration requirements |
Treat each row as a separate decision gate. Approval at one stage does not prove that the next authority will accept the project, vehicle or import.
Step 1: incorporate and make the project proposal decision-ready
Industry registration follows company formation. The Department of Industry's registration information requires a private applicant's company-registration certificate, approved memorandum and articles of association, the industry application form and a project proposal describing the product, process, capacity and location (Department of Industry industry-registration information). If incorporation is still pending, start with private limited company registration.
Your proposal is the operating blueprint for this route. It should consistently identify:
- the EV category and whether the line is manufacturing, assembly or a defined combination;
- the production process, raw materials, components, kits and machinery;
- proposed annual capacity and projected fixed capital;
- site location and land or premises arrangement; and
- electricity and other utility demand.
These details are later used to assess the industry classification, environmental obligations and changes that require a new application. Do not use a generic manufacturing proposal that describes a different process from the plant you will actually build.
Step 2: identify the correct industry-registration authority
The Department of Industry directly registers only specified industries: Schedule-1 permission industries, foreign-invested industries, industries connected with Schedule-5 constitutional matters, industries spanning more than one province and academic consultancy services related to diplomatic affairs. Other industries are registered, renewed and regulated by the concerned provincial government, unless the province has not enacted its own governing law, in which case the federal Department continues to handle the matter (Industrial Enterprises Act, 2076, section 4).
Electric vehicle manufacturing is not named in Schedule-1's permission-industry list. A wholly Nepali-owned project confined to one province and not otherwise within the listed federal cases generally follows the ordinary route. Confirm the current provincial allocation with the Department of Industry or the relevant provincial industry office before filing because the answer depends on the location and current provincial legislation.
For help understanding the wider registration dependency, see industry registration and approvals. A manufacturing project can also need coordinated premises, environmental and utility preparation beyond the industry application itself; manufacturing licensing support explains that broader readiness work.
Classification matters even when the product is the same
Fixed capital, excluding land and buildings, sets the Act's capital-based classification.
| Industry class | Fixed-capital threshold |
|---|---|
| Micro-industry | Up to NPR 2 million, with additional worker, turnover and power-use conditions |
| Cottage industry | Defined by traditional skill, local raw material and Schedule-2 activities rather than capital |
| Small industry | Up to NPR 150 million |
| Medium industry | Above NPR 150 million up to NPR 500 million |
| Large industry | Above NPR 500 million |
Source: Industrial Enterprises Act, 2076, section 17.
The classification is not merely descriptive. It affects the authority's treatment and the applicability of some industry facilities. Model your projected fixed capital carefully rather than choosing a class based on a marketing description of the plant.
The Act lists industries manufacturing electrical motor vehicles as national-priority industries. This can make them eligible for facilities or concessions that the Government provides by Gazette notice and for an application to lease government land, but it does not change the registration authority or create an automatic exemption (sections 29 and 31).
Step 3: resolve environmental clearance before construction
If your project requires an Initial Environmental Examination (IEE) or Environmental Impact Assessment (EIA), you cannot begin establishment, operation, commercial production or transaction until the assessment is approved. The requirement can arise again if you increase capital or capacity, add or change an objective, or relocate. If no IEE or EIA is required, the industry must instead submit a self-declaration explaining why and the measures it will take to reduce environmental effects (Industrial Enterprises Act, 2076, section 7).
The controlling framework is the Environment Protection Act, 2076 and Environment Protection Rules, 2077. The required assessment tier depends on the project's scale and the applicable Rules schedules. Confirm the tier for your exact process, capacity and location with the Department of Environment or relevant provincial office before signing a construction contract or ordering equipment.
Step 4: submit the industry-registration application
The Department of Industry citizen charter identifies the usual application package as the registration form, project proposal, company certificate with memorandum and articles, directors' citizenship certificates and, where applicable, an approved IEE or EIA report. It states an ordinary-registration benchmark of 15 days and no government fee; a Schedule-1 permission application has a different benchmark and capital-linked fee (Department of Industry citizen charter).
For a typical domestic EV manufacturing project outside Schedule-1, use the ordinary route as the working starting point, but confirm the current provincial or federal process, fees and timing before relying on the charter. If the project later changes fixed capital, capacity, objective, connected electricity load or location, apply to the industry-registration body again and update environmental material where the change triggers it.
Step 5: separate machinery and components from finished vehicles
Imported machinery, tooling, raw materials, components and kits go through customs. Current classification, duty and any registered-industry treatment depend on the exact tariff heading and current Finance Act. Do not cost a plant using a previous year's rate; confirm the exact machinery and component list with the Department of Customs and a customs agent.
The finished EV is a different regulatory object from the imported production inputs. Industry registration can allow the business to manufacture; it does not itself establish the documentation needed to register the completed vehicle for road use.
Step 6: clear standards and transport requirements before sale
The Nepal Bureau of Standards and Metrology administers the Nepal Standards certification-mark framework. Some products have a mandatory Nepal Standard mark and others may be covered voluntarily. Confirm with NBSM whether the specific vehicle category or component is covered before finalising your design.
The Department of Transport Management is separately relevant before a locally manufactured or assembled EV can be registered and sold. Reporting on the Department's 2023 procedural amendment stated that locally manufactured or assembled vehicles may be registered without the customs import-notification letter previously used for imported vehicles, using a VAT bill and, where applicable, excise-clearance form instead. Confirm the current document set directly with Department of Transport Management for your exact vehicle category before planning first sales.
Tax, incentives and continuing compliance
The company needs PAN and, if current rules require it, VAT registration with the Inland Revenue Department. These are ordinary manufacturing-business registrations rather than EV-specific permissions.
The Industrial Enterprises Act gives manufacturing industries a 20 percent exemption on the otherwise payable income-tax rate and a further 5 percent exemption on income earned from exports (section 24(2)(a)). Other potential facilities depend on conditions such as project location, investment and employment or on discretionary government decisions. Check eligibility against the specific project; do not treat national-priority status as an automatic incentive.
If the company will have foreign equity
Foreign investment changes the sequence. Department of Industry guidance states that a foreign investor must invest at least NPR 20 million and, once foreign-investment approval is granted, pay a refundable NPR 20,000 deposit in addition to completing industry-registration requirements (Department of Industry foreign-investment guidance). If ownership is not wholly Nepali, resolve the foreign-investment route before proceeding on the domestic path in this guide.
Common mistakes that delay a plant
- Ordering machinery or signing a site commitment before the project proposal, authority and environmental position are settled.
- Assuming the Department of Industry must register every plant without checking the province and the project characteristics.
- Starting civil works before an IEE or EIA is approved where the project requires one.
- Treating factory registration as authority to sell the first vehicle without a separate transport-registration plan.
- Budgeting components, kits or machinery using an old customs rate rather than the current tariff classification.
Before you apply: Final checklist
- The company and ownership route are confirmed.
- The proposal accurately describes process, capacity, vehicle category, site and imports.
- The federal or provincial industry-registration authority has been identified.
- Environmental screening has been confirmed before construction or operation begins.
- Customs treatment has been checked for the actual machinery, parts and kits.
- Standards and DoTM requirements have been raised for the intended vehicle category before first sale.
- PAN, VAT position, local premises matters and utilities are in the project plan.
