How to Register a Software/IT Company in Nepal: Pvt. Ltd. Guide & Options

Why Pvt. Ltd. Is the Right Structure for an IT Business

For software, SaaS, IT services, BPO, or product companies, the Private Limited Company under the Companies Act, 2063 is the default structure for almost every founder. Three reasons make it almost non-negotiable for tech:

• Limited liability. When you handle client data, run production systems, or sign SaaS contracts, mistakes can be expensive. A Pvt. Ltd. caps your personal exposure to your share capital.
• IP & equity ownership. A company can own copyright in code, register trademarks, and issue shares to co-founders, employees (ESOP), and investors. A sole proprietorship cannot.
• Investor & client credibility. Foreign clients, enterprise buyers, payment gateways, App Store/Play Store payouts, and investors all expect a registered company — not a firm.

You can incorporate a Pvt. Ltd. with a single shareholder (Companies Act 2063, Section 3) or up to 101 shareholders. There is no minimum paid-up capital prescribed for ordinary IT businesses — you choose your authorized capital based on what your business actually needs.

Three Registration Paths for an IT Company

Most founders don’t realise that incorporation at the OCR is only step one. Depending on what you plan to do — sell locally, export software, or take foreign investment — you may need additional registrations. Here are the three common setups:

Path 1 — Incorporating the Pvt. Ltd. via OCR/CAMIS

Since Shrawan 1, 2081 (July 16, 2024), all company registrations in Nepal happen through the CAMIS portal at ocr.gov.np — no more counter visits.

Step 1: Reserve a Company Name

Pick three options. The name must end with “Private Limited” (Pvt. Ltd.), be unique, and not clash with any reserved or existing OCR name. For tech companies, avoid generic words like “Tech”, “Soft”, “Solutions” alone — pair them with a distinctive coined or descriptive word so the registrar approves it on the first try. Approval takes 24–48 hours; the reserved name is held for 35–90 days.

Step 2: Draft IT-Specific MOA Objectives

Your Memorandum of Association (MOA) lists what your company is permitted to do. Keep the objectives broad enough to cover future product pivots. Typical clauses for an IT/software business:

• To design, develop, license, and sell computer software, mobile applications, web applications, and SaaS products.
• To provide IT consulting, software development, system integration, and managed services to domestic and foreign clients.
• To export software products and IT-enabled services and to receive payments in foreign currency through banking channels.
• To carry out research, training, and capacity-building activities in information technology.
• To deal in computer hardware, peripherals, and related goods (only if you actually plan to sell hardware — keeps you out of compulsory VAT otherwise).

The Articles of Association (AOA) govern internal rules. Single-shareholder companies can adopt the government-prescribed AOA template under Section 4(2), saving drafting cost.

Step 3: Choose Your Authorized Capital

Authorized capital is the cap on shares you can issue; paid-up is what you actually inject. Government fees are tiered against authorized capital:

Step 4: Upload Documents to CAMIS

• MOA and AOA (notarized PDF)
• Citizenship certificates of all shareholders + recent photos
• Office address proof — Lalpurja (if owned) or rent agreement
• Witness details (one witness must sign MOA/AOA)
• Shareholder agreement, if any

Step 5: Pay Fees & Receive Certificate

Pay the OCR fee online via eSewa, Khalti, or ConnectIPS. Add costs for name reservation, gazette publication (NPR 600), digital certificate (~NPR 1,000), notarization, and a company seal. Once approved, download your Certificate of Incorporation from the CAMIS dashboard.

Step 6: PAN, Bank Account, Ward Registration

• PAN from IRD — mandatory before invoicing. Requires one in-person biometric visit.
• Corporate bank account — if you export software, ask the bank for a Foreign Currency Receivable account alongside the NPR account so client payments via Wise/SWIFT/Stripe Atlas etc. land cleanly.
• Ward Office registration with rent agreement, OCR certificate, and PAN.

Step 7: Register for VAT Early (Recommended)

For pure services (most IT companies), VAT registration becomes mandatory once turnover crosses NPR 20 lakh in any 12-month period. We recommend registering voluntarily from day one rather than waiting for the threshold. Three reasons:

• Local clients ask for it. Enterprise customers, NGOs/INGOs, government bodies, and any VAT-registered business will ask for a VAT invoice so they can claim input credit. Without VAT, you lose deals or get squeezed on price.
• Exports are zero-rated. You charge 0% VAT to foreign clients (no impact on them) and still reclaim VAT on your local input costs — laptops, hosting, SaaS subscriptions, office rent, internet bills. Net effect: regular refunds from IRD.
• Avoids messy mid-year transition. If you cross the threshold halfway through the year, switching to VAT mid-contract creates billing headaches with existing clients. Starting VAT-registered keeps invoicing consistent.

The cost of voluntary registration is one extra return per month (filed by the 25th). For most IT companies, the input credit you reclaim more than covers the bookkeeping overhead.

Path 2 — Industry Registration at the Department of Industry

Under the Industrial Enterprises Act, 2076 (2020), software development and IT-enabled services are classified as a service industry. After incorporating your Pvt. Ltd., you can register the same entity as an “industry” with the Department of Industry (DoI) — or with the Industry Section at the provincial level for smaller setups.

Why Bother?

Industry registration is technically optional for most domestic-only IT firms, but it unlocks four things:

• Income tax concession on software/IT export earnings — recent Finance Acts have offered concessional treatment for foreign-currency earnings from software export and IT-enabled services. Without industry registration, you can’t cleanly claim this rebate.
• Eligibility for IT Park — the Information Technology Park at Banepa and other government-promoted clusters require industry-registered IT businesses to lease space.
• Export incentive eligibility — cash incentives notified from time to time for service exporters route through industry-registered entities.
• FITTA route — you cannot accept foreign equity without industry registration first (see Path 3).

How It Works

• Apply to DoI (or province) with: incorporation certificate, MOA/AOA, PAN, project profile / business plan, office address proof.
• Your IT business will be classified by scale (micro, small, medium, large) based on fixed assets and headcount under IEA 2076.
• DoI issues an Industry Registration Certificate, usually within 15–30 days for service industries.
• Annual renewal/reporting is required — submit the prescribed industrial statistics return each year.

Path 3 — Foreign Investment via FITTA

If any shareholder is a foreign citizen or foreign company, you must register your company under the Foreign Investment and Technology Transfer Act, 2075 (FITTA 2075). This is the dedicated foreign investment regime, separate from ordinary OCR registration.

Pre-Conditions

• Your business must be in a sector not on the FITTA Negative List. Software, IT services, and BPO are permitted sectors — foreign investment is welcome.
• The investment must meet the minimum foreign investment threshold notified by the government. Software/IT has historically been treated more favourably than other sectors with a lower threshold — confirm the current notified amount with DoI before committing, since the government has revised this multiple times.

The Process

1. Approval at DoI — Apply for foreign investment approval. Submit incorporation papers, project report, source-of-funds documents, and shareholder details.
2. Industry registration — Same DoI track as Path 2 (foreign-invested companies must be industry-registered).
3. NRB approval — Once DoI approves, get Nepal Rastra Bank approval to bring the foreign currency in through banking channels. Without NRB approval, the inward remittance can’t be repatriated later.
4. Inject capital — The foreign investor wires the funds into the company’s bank account; the bank issues a capital inflow certificate.
5. Issue shares — File the share allotment with OCR and update the share registry.

Repatriation

FITTA allows repatriation of: dividends, sale proceeds of shares (after tax), royalties under approved technology transfer agreements, and lease payments. You repatriate through your bank with NRB’s consent — provided the original capital inflow is properly documented.

IT-Specific Compliance You Can’t Skip

Sector Licenses (Only If Applicable)

• NTA license — required only if you provide telecom/ISP/VoIP services, internet access, or operate a network. Pure software development, SaaS, or IT services do not need an NTA license.
• Banking-related licenses — if you build payment products or wallets, you may need NRB licensing under the Payment and Settlement Act 2075.
• Cybersecurity / data protection — the Privacy Act 2075 imposes obligations on personal data handling. Plan for consent flows, data deletion, and breach notification from day one.

TDS & Tax Filing

• Withhold TDS on salaries, freelancer/consultant payments, rent, and certain service contracts — deposit by the 25th of the following Nepali month.
• File monthly VAT returns (if registered) by the 25th of the following month.
• File the annual income tax return within 3 months of the fiscal year-end (by Ashoj-end), with a 3-month extension available.
• Pay advance income tax in three instalments (Poush, Chaitra, Ashad) at 40%/70%/100% of estimated annual liability.

Foreign Currency Receipts

Every foreign-currency receipt from a software/IT client must come into Nepal through banking channels. Banks classify these inflows under service export purpose codes — this paper trail is what supports your industry-registration tax concession claim. Stripe, PayPal, Wise, Payoneer payouts that land in your corporate account are all acceptable provided they reach you through a Nepal-licensed bank with proper coding.

Annual Compliance with OCR

• Appoint an auditor (RA/CA) within 3 months of incorporation and notify OCR.
• File the annual return + audited financials with OCR every year.
• Maintain the share registry, board minute book, and statutory registers.

Tax Benefits Worth Knowing

Software exporters in Nepal have historically enjoyed concessional treatment when earnings come in through banking channels in foreign currency. The exact rate has changed multiple times via successive Finance Acts — recent years have seen large rebates on tax payable on foreign-currency export income. Two practical points:

• You must be industry-registered at DoI (Path 2 or Path 3) to claim the export concession cleanly.
• The concession applies to the foreign-currency earnings only — local INR/NPR billing is taxed at the standard corporate rate.

Always confirm the current rate with your auditor or with us at the start of each fiscal year — don’t plan a multi-year financial model on a rate that’s already been revised.

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