- adv.rojen@gmail.com
- Anamnagar Kathmandu
Liaison Office Registration in Nepal
24
Mar
Table of Contents
What Is a Liaison Office in Nepal?
A liaison office (also known as a contact office) in Nepal is a representative establishment of a foreign company that serves as a communication bridge between the parent company and Nepalese stakeholders. Unlike a branch office, a liaison office cannot engage in any commercial or income-generating activities .
The primary purpose is to:
- Maintain communication and coordination with local partners
- Facilitate market research and business exploration
- Assist Nepalese clients with product/service information (without remuneration)
- Coordinate with local agents or representatives
Legal Framework for Liaison Office Registration
| Legislation | Key Provisions |
|---|---|
| Companies Act, 2063 (2006) | Section 154 - Registration of foreign companies; Section 155 - Document submission requirements |
| Companies Directives, 2015 | Operational procedures and compliance requirements |
| Foreign Investment and Technology Transfer Act, 2019 | General foreign investment framework |
| Income Tax Act, 2058 | Tax treatment of liaison offices |
Governing Authority: Office of Company Registrar (OCR) - primary registration body
Key Differences: Liaison Office vs. Branch Office
| Parameter | Liaison Office | Branch Office |
|---|---|---|
| Revenue Generation | NOT permitted | Permitted |
| Business Activities | Limited to liaison, coordination, market research | Full commercial operations |
| Tax Liability | Generally exempt from income tax (no revenue) | Subject to corporate tax on Nepal income |
| Minimum Investment | No minimum required | No statutory minimum, but operational capital needed |
| Registration Authority | OCR (generally no DOI approval needed) | OCR + may require DOI/authority approval |
| Legal Status | Extension of parent company, no separate personality | Extension of parent company |
| Duration | Typically 1-3 years, renewable | Indefinite, subject to compliance |
| Compliance Burden | Lighter | Stringent (tax, audit, NRB) |
Permitted Activities for Liaison Office
Under Company Directives, 2015, a liaison office may :
- Maintain liaison on behalf of the foreign company
- Assist Nepalese clients during import or use of foreign company's products and services without taking any remuneration
- Coordinate with the agent of the foreign company in Nepal (if appointed)
Prohibited Activities:
| Activity | Status |
|---|---|
| Revenue generation | Strictly prohibited |
| Commercial contracts and agreements | Prohibited |
| Marketing of products/services | Prohibited |
| Market promotion and advertising | Prohibited |
| Invoicing or billing | Prohibited |
| Direct sales or purchases | Prohibited |
Step-by-Step Registration Process
Phase 1: Document Preparation
| Step | Action | Timeline |
|---|---|---|
| 1 | Gather parent company documents | 1-2 weeks |
| 2 | Prepare translations (if needed) | 3-5 days |
| 3 | Draft Power of Attorney for Nepal representative | 2-3 days |
| 4 | Notarize and legalize documents | 1-2 weeks |
Phase 2: Application Submission
| Step | Action | Details |
|---|---|---|
| 5 | Submit online application to OCR | Through OCR official website |
| 6 | Submit hard copies of documents to OCR | Tripureshwor, Kathmandu |
| 7 | Pay government fee | NPR 50,000 |
| 8 | OCR verification and registration | 2-3 weeks |
Phase 3: Post-Registration Compliance
| Step | Action | Timeline |
|---|---|---|
| 9 | Register at local Ward Office | 2-3 days |
| 10 | Obtain PAN from Inland Revenue Department | 3-5 days |
| 11 | Open bank account | 3-7 days |
| 12 | Commence liaison activities | Immediate |
Total Timeline: 2-4 weeks from complete document submission
Required Documents for Registration
| Document | Specification | Source |
|---|---|---|
| Application form | OCR prescribed format | OCR |
| Board resolution | Authorizing liaison office establishment in Nepal | Parent company |
| Certificate of incorporation | Notarized copy | Parent company |
| Memorandum of Association (MoA) | Notarized copy with Nepali translation | Parent company |
| Articles of Association (AoA) | Notarized copy with Nepali translation | Parent company |
| Company profile | Detailed business description | Parent company |
| Registered office details | Address, date of incorporation, issued capital, main objectives | Parent company |
| Directors/officers information | Nationality, name, address | Parent company |
| Nepal representative details | Name and address of authorized resident representative | Appointee |
| Power of Attorney | In favor of Nepal representative | Legal draft |
| Declaration of truthfulness | Directors/representative signature | Parent company |
| Audited financial statements | Last 3 years (recommended) | Parent company |
| Bank reference letter | Financial credibility | Parent company's bank |
Note: All foreign documents must be notarized and authenticated by the Nepalese embassy in the country of origin . Documents not in English or Nepali require certified translations .
Government Fees and Costs
| Fee Type | Amount (NPR) | Notes |
|---|---|---|
| OCR Registration Fee | 50,000 | One-time |
| Ward Office Registration | 1,000-5,000 | Varies by location |
| PAN Registration | Free | IRD |
| Bank Account Opening | 500-2,000 | Bank charges |
| Professional Services (optional) | 30,000-80,000 | Legal/consulting fees |
| Total Estimated Cost | NPR 80,000-150,000 | With professional assistance |
Compliance and Reporting Obligations
Annual Requirements:
| Compliance | Deadline | Authority |
|---|---|---|
| Parent company financial statements | Within 3 months of preparation | OCR |
| Liaison office financial statements | Within 3 months of FY-end | OCR |
| - Salaries, allowances paid | Detailed breakdown | |
| - Tax deductions | TDS compliance | |
| - Rental expenses | Office rent payments | |
| Annual activity report | Annual | DOI |
| Information updates | Within 35 days of any change | OCR |
Tax Compliance:
| Aspect | Treatment |
|---|---|
| Income Tax | Generally not applicable (no revenue generation) |
| VAT | Not required unless providing taxable services |
| TDS | Required on payments to employees, contractors |
| Social Security Fund | Mandatory if employing Nepali nationals |
Employment Regulations
Hiring Nepali Staff:
- Must comply with Labor Act, 2074 (2017) and Labor Rules, 2075 (2018)
- Mandatory contribution to Social Security Fund (SSF)
- Minimum wage compliance
- Workplace safety measures
Hiring Foreign Nationals:
- Work permits required from Department of Labour
- Limited to positions that cannot be filled by Nepalese nationals
- Maximum ratio of foreign to Nepalese employees as per regulations
Bank Account and Foreign Exchange
Account Opening:
| Requirement | Details |
|---|---|
| Documents needed | DOI approval (if applicable), registration certificate, PAN, board resolution |
| Currency | Nepali Rupee (NPR) account; foreign currency with NRB approval |
| Funding | Parent company can remit operational expenses |
Key Point:
Liaison offices cannot generate revenue in Nepal, so all operational funds must come from the parent company abroad .
Renewal and Closure
Renewal Process:
| Step | Timeline | Action |
|---|---|---|
| Application submission | 30 days before expiry | Submit to DOI/OCR |
| Updated documents | With application | Financial statements, activity reports |
| Renewal fee payment | As prescribed | Government fee |
| Approval receipt | Upon processing | Continue operations |
Closure Process:
| Step | Action |
|---|---|
| 1 | Board resolution for closure |
| 2 | Closure application to DOI with reasons |
| 3 | Settlement of all liabilities |
| 4 | Tax clearance certificate from IRD |
| 5 | Bank account closure |
| 6 | Repatriate remaining funds (NRB approval) |
| 7 | Final reports to authorities |
| 8 | Obtain closure approval |
Strategic Considerations
When to Choose a Liaison Office:
| Scenario | Liaison Office Suitable? |
|---|---|
| Market research and exploration | Yes |
| Establishing initial presence | Yes |
| Coordinating with local agents | Yes |
| Revenue generation required | No - consider branch office |
| Direct sales to customers | No - consider branch office |
| Executing contracts | No - consider branch office |
Conversion to Branch Office:
A liaison office can be converted to a branch office by :
- Submitting revised documentation
- Obtaining necessary approvals from DOI/IBN
- Meeting additional regulatory requirements for commercial operations
- Complying with tax and investment obligations
Frequently Asked Questions (FAQs)
Can a foreign company open a liaison office in Nepal?
Yes. Any legally registered foreign company can establish a liaison office in Nepal subject to compliance with the Companies Act, 2063 and Company Directives, 2015 .
How long does liaison office registration take?
Typically 2-3 weeks from complete document submission to OCR .
What is the government fee for liaison office registration?
NPR 50,000 payable to the Office of Company Registrar .
Can a liaison office earn income in Nepal?
No. Liaison offices are strictly prohibited from any income-generating or commercial activities. They can only serve as contact points for coordination and communication .
Is there a minimum investment for liaison office?
No. There is no statutory minimum investment requirement. The parent company should provide sufficient funds for operational expenses .
Do liaison offices pay tax in Nepal?
Generally no income tax is payable since they cannot generate revenue. However, they must comply with TDS obligations on payments made to employees and service providers .
Can a liaison office hire employees?
Yes, both Nepali and foreign nationals can be employed, subject to work permit requirements for foreigners and labor law compliance .
What is the difference between liaison office and branch office?
A liaison office cannot conduct business or earn revenue—it only coordinates and communicates. A branch office can engage in commercial activities, sign contracts, and generate income .
Can a liaison office be converted to a branch office later?
Yes. With proper approvals from DOI and compliance with branch office requirements, a liaison office can transition to a branch office .
What documents need to be submitted annually?
Parent company financial statements, liaison office expense statements (salaries, rent, taxes deducted), and any changes in registered information .
Why Choose Corporate Np for Liaison Office Registration
Corporate Np provides comprehensive liaison office establishment services:
- Eligibility assessment and structure advice
- Document preparation and legalization coordination
- OCR application and registration processing
- Post-registration compliance setup (PAN, bank account, ward registration)
- Annual compliance management and reporting
- Conversion to branch office services when ready
- Liaison with government authorities
Our expertise ensures your liaison office meets all statutory requirements under the Companies Act, 2063 while maintaining the flexibility to scale to full commercial operations when appropriate. Contact Corporate Np today for seamless liaison office registration in Nepal.
Important Disclaimer
This content is prepared for informational and educational purposes only. It does not constitute legal advice. Company registration procedures, fee structures, and compliance requirements are subject to amendments by the Office of Company Registrar, Department of Industry, and legislative bodies. While liaison offices generally do not require DOI approval, OCR may request relevant authority clearance depending on the nature of activities. Always verify current requirements with official sources or qualified legal counsel before initiating registration. The information presented reflects regulations as of March 2026 and may not capture recent policy changes.
