Starting a Business in Nepal: From OCR Registration to First Tax Return

Choosing a structure

Foreign investors must set up a company and obtain approval under the foreign investment rules.

Registering a private limited company

1. Name reservation on the OCR portal.
2. Prepare the Memorandum and Articles of Association, shareholder details and office address proof.
3. Submit online and pay the registration fee (scaled to authorised capital).
4. Receive the Certificate of Incorporation, typically within 1–2 weeks.
5. Register for PAN (and VAT if required) at the IRD.
6. Register with the ward office for local business tax.
7. Open a bank account and deposit paid-up capital.
8. Enrol in the Social Security Fund if you will have employees.

Compliance from day one

• Monthly: VAT and TDS returns by the 25th.
• Poush / Chaitra / Ashadh: advance tax instalments.
• Ashwin end: annual income tax return with audited financial statements.
• Annually: OCR annual return, updated share register and board minutes; renewal of ward registration.

Common early mistakes

Mixing personal and company money, failing to issue VAT invoices, not enrolling staff in SSF, and forgetting the OCR annual return, which accrues fines quietly for years.

Costs to budget

Government fees are modest; the recurring costs are the annual audit, bookkeeping, and compliance filing. A lean startup should budget for a bookkeeper from month one. Clean books are far cheaper than a clean-up.