Nepal is increasingly becoming an attractive destination for international investors and companies looking to expand into South Asia. One of the most common entry routes for foreign firms is through the registration of a branch office. A branch office is regarded as an overseas extension of the parent company. While it enables the foreign enterprise to carry out permitted activities in Nepal, it does not create an independent legal entity. Instead, its legal standing depends on that of the parent company abroad. If the parent entity is incorporated under the laws of its home jurisdiction, the branch office in Nepal is simply an extension of that entity and has no separate legal status.
To compete effectively in Nepal’s emerging market, foreign companies must understand the registration procedure, required documentation, compliance obligations, and approval processes as stipulated under local law.
Legal basis and regulatory body
The Companies Act 2063 (2006), specifically section 154, sets the framework for branch office registration in Nepal. It makes clear that every foreign company must register its branch before carrying out any business in the country, ensuring transparency, accountability, and compliance with Nepalese regulations.
The Office of the Company Registrar (OCR), under the Ministry of Industry, Commerce, and Supplies, oversees the registration process. Applications are checked online to confirm the accuracy of submitted documents and compliance with regulations before approval is granted. In some cases, additional approvals from other government departments may be required, particularly when the branch office is tied to a project undertaken with a government agency.
Steps in registering a branch office
The process of establishing a branch office in Nepal involves several steps designed to ensure that only legitimate and commercially motivated foreign companies can operate in the country. The first step is submitting an application to the OCR, clearly outlining the company’s intent to establish a branch. For projects implemented in collaboration with government bodies, recommendations and approvals from the relevant authority must also be secured.
Next, the company must apply for name approval via the OCR’s online portal, which generally takes 10 to 14 working days. Certain terms, such as “Casino” or “Consultancy”, are restricted unless specifically permitted under sectoral laws. Once name approval is obtained, all supporting documents must be submitted to verify the foreign company’s legitimacy and its authorisation to do business in Nepal.
The process is finalised once the OCR reviews the documents, approves the application, and issues a certificate of registration for the branch office.
Documentation required
A number of documents are needed for registration. These include the Incorporation Certificate of the parent company and its Memorandum and Articles of Association. An official application, accompanied by a board resolution authorising the branch office, must also be submitted. Copies of all directors’ passports, a Power of Attorney appointing a representative in Nepal, and a formal letter of appointment are required.
The local representative must provide proof of identity, such as a passport or citizenship certificate, along with a signed declaration confirming the accuracy of all documents. Where relevant, approvals from government bodies and any agreements between the foreign company and local authorities must also be attached.
All documents not in Nepali must be translated, notarised, and legalised. Identification documents such as passports and citizenship certificates must be notarised in their country of origin. Without these formalities, the OCR will not process the application.
Post-registration compliance
Registration is only the first stage; branch offices must meet continuing legal obligations. These include filing quarterly compliance reports with the OCR, appointing an auditor to review annual accounts, and submitting audited financial statements within six months of the end of each fiscal year. Any changes to the parent company’s details, such as name or address, must also be promptly reported.
In addition, branch offices must comply with wider legal frameworks including labour, social security, tax, and foreign investment laws. Non-compliance can lead to penalties, suspension, or even cancellation of registration.
The role of legal support
The branch registration process can be complex, particularly with document authentication, regulatory approvals, and compliance across multiple laws. Many foreign enterprises rely on local legal professionals to navigate these challenges. Lawyers ensure documents are properly translated, notarised, and filed, reducing risks of delays or rejections. They also assist with FDI approvals, tax compliance, and labour law obligations.
Legal guidance offers foreign investors peace of mind and ensures their branch office is fully compliant, protecting both investment and reputation in Nepal.
Conclusion
Nepal presents significant opportunities for international companies aiming to expand into South Asia, but entry requires strict adherence to the Companies Act 2063. From name approval to compliance reporting, accuracy and legal knowledge are essential at every stage.
With sound planning and expert legal assistance, foreign enterprises can successfully establish a branch office, participate in Nepal’s growing economy, and build a foundation for long-term growth while safeguarding their investments.
