Updated on: March 28, 2026
Are you searching for foreign branch office registration in Nepal? Establishing a branch office allows foreign companies to conduct business in Nepal without incorporating a separate legal entity. This comprehensive guide explains the complete registration process under the Foreign Investment and Technology Transfer Act 2075 (FITTA 2019), from initial approval to operational compliance.
Foreign branch office registration in Nepal refers to the legal process by which a foreign company establishes an operational extension in Nepal under Section 4 of FITTA 2075. Unlike a subsidiary (which is a separate Nepalese company), a branch office is an extension of the parent foreign company and does not have independent legal personality in Nepal.
Furthermore, branch offices are permitted for specific business activities including liaison, coordination, market research, and direct business operations in approved sectors. The branch operates under the foreign company's name and is subject to both Nepalese regulations and the parent company's governing law .
| Aspect | Branch Office | Subsidiary Company |
|---|---|---|
| Legal Status | Extension of parent company | Separate legal entity in Nepal |
| Liability | Parent company fully liable | Limited liability (company structure) |
| Registration | FITTA Section 4 approval required | Standard company incorporation |
| Capital Requirement | No minimum capital specified | NPR 20 million minimum for FDI |
| Taxation | Taxed as foreign entity | Taxed as Nepalese resident company |
| Repatriation | Profits remitted to parent | Dividends to foreign shareholders |
| Contracts | Signed by parent company | Signed by subsidiary directly |
| Local Perception | May have lower credibility | Higher local acceptance |
Under FITTA 2075 branch office Nepal regulations, foreign companies may establish branches for:
| Activity Category | Specific Permitted Activities |
|---|---|
| Liaison Functions | Market research, coordination, information exchange |
| Technical Services | Engineering, consulting, technical support |
| Trading Activities | Import/export, wholesale trading (specific sectors) |
| Project Execution | Construction, infrastructure projects |
| Financial Services | Banking, insurance (with NRB approval) |
| Airline Operations | Ticketing, cargo handling, representation |
Prohibited Activities:
| Legislation | Key Provisions | Regulatory Body |
|---|---|---|
| FITTA 2075 (2019) | Section 4 - Branch office establishment | Department of Industry |
| Companies Act 2063 | Foreign company registration, compliance | OCR |
| Foreign Exchange Regulation Act 1962 | Capital inflow, repatriation | Nepal Rastra Bank |
| Income Tax Act 2058 | Taxation of branch profits | Inland Revenue Department |
| Industrial Enterprises Act 2020 | Industry classification, incentives | Ministry of Industry |
Step 1: Determine Eligibility
Verify that proposed activities are permitted for branch operations:
Step 2: Prepare Parent Company Documentation
Compile certified documents from parent company's home jurisdiction:
Step 3: Designate Branch Head
Appoint branch head/manager who will:
Step 4: Submit Branch Office Application
File application with Department of Industry including:
| Document Category | Specific Requirements |
|---|---|
| Application Form | DOI prescribed format for branch establishment |
| Parent Company Docs | Apostilled incorporation certificate, MOA/AOA |
| Board Resolution | Authorization to establish Nepal branch, capital commitment |
| Financial Statements | Audited accounts showing financial capacity |
| Branch Head Docs | Passport, CV, appointment letter, power of attorney |
| Business Plan | Activities description, investment plan, employment generation |
| Premises Proof | Lease agreement or ownership documents for registered office |
| Bank Reference | Parent company's bank reference letter |
Step 5: Pay Application Fee
Branch office application fee: NPR 10,000 - 50,000 depending on parent company size and proposed activities .
Step 6: DOI Review and Approval
DOI evaluates application based on:
Approval timeline: 7-15 working days for complete applications .
Step 7: Register Foreign Company at OCR
Submit application to Office of Company Registrar:
OCR issues foreign company registration certificate within 7-10 days.
Step 8: Obtain PAN Registration
Register with Inland Revenue Department:
Step 9: Open Bank Account
Establish local bank account:
Step 10: NRB Notification and Capital Injection
Step 11: Local Business Licenses
Obtain from local municipality:
Step 12: Work Permits for Expatriates
If branch head or other expatriates employed:
Step 13: Social Security Registration
Register with Social Security Fund if employing Nepali staff:
| Aspect | Requirement |
|---|---|
| Minimum Capital | No statutory minimum specified |
| Recommended Capital | NPR 5-10 million for operational credibility |
| Operating Funds | Sufficient for 12-18 months operations |
| Capital Injection | Through formal banking channels with NRB recording |
| Expense Category | Cost Range (NPR) |
|---|---|
| DOI application fee | 10,000 - 50,000 |
| Document apostille/legalization (home country) | USD 500-2,000 |
| Translation and notarization | 10,000 - 25,000 |
| OCR foreign company registration | 15,000 - 30,000 |
| PAN registration | Free |
| Legal/professional fees | 100,000 - 300,000 |
| Office setup (lease, utilities) | 200,000 - 500,000 |
| NRB recording | 1,000 - 3,000 |
| Total Estimated Cost | NPR 350,000 - 900,000+ |
| Tax Type | Rate | Applicability |
|---|---|---|
| Corporate Income Tax | 25% | Net branch profits |
| Withholding Tax | 5% - 15% | Payments to non-residents |
| VAT | 13% | Taxable supplies and services |
| Branch Profits Tax | 5% | Deemed repatriated profits |
| Advance Income Tax | 1% - 1.5% | Import payments |
Tax Compliance:
| Requirement | Frequency | Responsible Authority |
|---|---|---|
| DOI performance report | Annual | Department of Industry |
| Income tax return | Annual | IRD |
| VAT return | Monthly/Quarterly | IRD |
| Company annual return | Annual | OCR |
| NRB compliance report | Annual | Nepal Rastra Bank |
| Audit by Nepalese auditor | Annual | OCR requirement |
Choose branch office Nepal when:
Choose subsidiary when:
| Change | Effective Date | Impact |
|---|---|---|
| Automatic route expansion | February 2026 | More sectors eligible for branch operations |
| NRB prior approval removed | December 2025 | Simplified capital injection |
| Work permit salary threshold | 2024 | USD 2,500 minimum for foreign employees |
| Social Security mandatory | 2023 | All employers must register |
| Challenge | Solution |
|---|---|
| Document legalization complexity | Use apostille (Hague Convention) or embassy legalization early |
| Branch head visa issues | Apply for business visa before arrival, convert to work permit |
| Tax residency disputes | Maintain clear separation between parent and branch operations |
| Repatriation documentation | Preserve all NRB recording documents meticulously |
| Local contract enforcement | Ensure contracts clearly identify branch as foreign company extension |
| Phase | Duration |
|---|---|
| Pre-application preparation | 2-3 weeks |
| DOI approval application | 2-4 weeks |
| OCR foreign company registration | 2-3 weeks |
| Tax and operational setup | 2-3 weeks |
| NRB notification and recording | 2-4 weeks |
| Total Estimated Time | 2-4 months |
Corporate Np specializes in foreign branch office registration Nepal with comprehensive services:
With extensive experience in Nepal's foreign investment regulations, Corporate Np ensures seamless establishment of your branch office. Contact Corporate Np today to begin your branch office Nepal FITTA registration process.
For additional information on foreign branch office registration in Nepal, consult these authoritative sources:
Disclaimer: The information provided in this guide is for general informational purposes only and does not constitute legal or tax advice. Branch office regulations are subject to change under FITTA amendments and foreign exchange regulations. Foreign companies should consult qualified legal professionals and visit official government portals for the most current requirements before initiating foreign branch office registration in Nepal. Tax implications vary based on parent company jurisdiction and applicable tax treaties.
A branch office can conduct revenue-generating business activities, while a liaison office is restricted to non-commercial activities (coordination, research, information exchange). Branch offices require FITTA approval and pay taxes; liaison offices have simpler registration but cannot earn income in Nepal.
Foreign companies from most countries can establish branches, provided their activities are not in Nepal's negative list (arms, ammunition, real estate trading, etc.) . Parent companies must demonstrate financial capacity and good standing in their home jurisdiction.
No statutory minimum capital is specified for branch offices, unlike subsidiaries which require NPR 20 million FDI minimum . However, practical operating capital of NPR 5-10 million is recommended for credibility and operational sustainability.
Foreign branch offices cannot directly own land in Nepal. They may lease premises for operations (maximum 50-year lease for foreigners). For property ownership, a subsidiary structure with Nepali equity participation is required.
Branch profits are subject to 25% corporate income tax on net profits. Additionally, a 5% branch profits tax applies on deemed repatriated profits. VAT at 13% applies to taxable supplies .
Yes, after tax clearance, branch profits can be repatriated to the parent company. Under December 2025 reforms, commercial banks now approve repatriation within 15 days . Proper NRB recording is mandatory for repatriation.
Parent company incorporation certificate, MOA/AOA, board resolution, and financial statements require apostille (for Hague Convention countries) or embassy legalization (for non-convention countries) plus certified Nepali translation.
Complete registration typically takes 2-4 months: DOI approval (2-4 weeks), OCR registration (2-3 weeks), tax and operational setup (2-3 weeks), and NRB recording (2-4 weeks).
Yes, a branch can be closed and operations transferred to a newly incorporated subsidiary. This requires separate subsidiary incorporation, asset transfer, branch closure formalities with DOI and OCR, and NRB compliance for capital restructuring.
Yes, the branch head (if foreign national) requires a work permit from the Department of Labour. Minimum salary threshold is USD 2,500 per month, and 1:4 foreign-to-local employee ratio must be maintained .
