How to start a business in Nepal: firm or company registration, PAN, VAT, tax and the yearly deadlines

Every business in Nepal, from a tea shop to a software company, goes through the same five steps. Only the office changes with the form you choose. A shop or a service run by one person is usually a sole proprietorship (एकलौटी फर्म), registered with the ward, the province or the Department of Commerce. A business with shareholders is a private limited company (प्राइभेट लिमिटेड कम्पनी), registered online with the Office of the Company Registrar (OCR, कम्पनी रजिष्ट्रारको कार्यालय).

This page covers both. It then covers running the business: the tax for 2083/84, the deadlines in a year, hiring, and closing a business without leaving fines behind.

Before step one comes the idea. "Business ideas" is searched about three times as often as "how to start a business" in Nepal, and the pages that answer it are lists. We do not rank ideas: what works in Itahari does not work in Jumla, and a list cannot know your skills, your street or your savings. What we can give is a way to test an idea before you spend on registration, rent and stock:

• Sell before you build. Find ten people who are not relatives and who pay you for the product or service, from home, a stall or a Facebook page. Ten real sales say more than a business plan.
• Write down every cost: rent and its deposit, fittings, stock, transport, wastage, a salary for yourself, and three months of running costs held back as working capital.
• Count what one sale earns after the cost of the goods, then how many sales a month cover the fixed costs. If that number is out of reach, change the idea, not the spreadsheet.
• Check the rules for your trade before signing a lease. Food, medicine, schools, travel, money and media all need a licence on top of registration.
• Start small; it is cheap. A micro-enterprise registers free and pays no income tax for 7 years, and a company with Rs 1 lakh of authorised capital costs Rs 1,000 to register. The quotation and receipt makers give your first customers proper papers.

1. 1Choose the form: sole proprietorship, partnership firm or private limited company (the next section).
2. 2Register it: a firm with the ward, province or Department of Commerce; an industry with the province or the Department of Industry; a company in CAMIS at OCR.
3. 3Get a PAN (स्थायी लेखा नम्बर) from the Inland Revenue Department (IRD), and register for VAT when your turnover passes Rs 30 lakh for services or Rs 50 lakh for goods.
4. 4Register with your municipality (व्यवसाय दर्ता) and pay its business tax each year; take any sector licence your trade needs.
5. 5Open a business bank account, keep books from the first sale, and put the year's deadlines in a calendar.

The real difference is who pays when the business owes money. A firm, sole or partnership, has unlimited liability (असीमित दायित्व). The firm and its owner are the same person in law, so a supplier the shop cannot pay can come after the owner's house. A company is a separate legal person. A shareholder can lose what was put in, and normally no more.

A company costs more to keep. It files audited accounts with OCR every year, holds meetings, keeps minutes and pays 25% tax on its profit. A firm renews its registration and files its own tax return. For a shop or a service that one person runs, a firm is the usual start. A company suits partners who want written shares, an investor, a foreign partner, or big clients who will only deal with one.

Firm registration changed with federalism, and older pages still send everyone to the Department of Commerce in Babarmahal. Today the Department's own citizen charter lists firm registration for firms with an import or export objective only. Every other firm goes to the province or the local level, under that province's law. Ask your ward office first: it will tell you whether your shop is registered there or sent on.

A partnership firm (साझेदारी फर्म) is registered the same way, with a written partnership deed among the documents. Unequal capital with an unwritten profit split is where most partnership disputes begin, so write the deed first: the partnership agreement maker drafts one.

Making things, processing food, or running a hotel or an IT service can make your business an industry under the Industrial Enterprise Act 2076, registered as an industry rather than as a plain firm. Industries that need permission, have foreign investment or span two provinces register at the Department of Industry; the province registers the rest (s.4). A shop that only buys and sells is usually a firm.

The smallest class matters most to a new owner. A micro-enterprise (लघु उद्यम) pays nothing to register (s.26), and the Income Tax Act exempts it from income tax for 7 years from the day it starts trading, with 3 more years if a woman runs it (s.11(3त)). Where to go:

• A shop or service with small capital: your ward or municipality, or the provincial office, by your province's rules.
• Bagmati Province, as one example: the local body up to Rs 5 lakh of capital, the cottage and small industry committee up to Rs 5 crore, the provincial directorate above, as Samriddhi Foundation's repository sets it out.
• A firm that imports or exports: the Department of Commerce, Supplies and Consumer Protection, online.
• An industry: the province's industry office, or the Department of Industry for the industries it keeps.

1. 1Choose a name that no registered firm in that office already uses, and decide the capital and the objective (what you will trade or make).
2. 2Get a ward recommendation (सिफारिस) for the business address, with the landlord's consent if you rent.
3. 3Fill the application of the registering office, with a copy of your citizenship and photographs; a partnership adds the deed and each partner's citizenship.
4. 4Pay the fee, which depends on capital and on the office. Keep the receipt.
5. 5Receive the certificate, then apply for a business PAN, and renew the registration each year as that office requires.

At Rs 1 lakh

Rs 1,000

At Rs 10 lakh

Rs 9,500

At Rs 1 crore

Rs 16,000

Public, to Rs 1 crore

Rs 15,000

Companies are registered online in CAMIS, OCR's Company Administration and Management Information System, in full use since 3 March 2025. Name approval, the documents, OCR's comments, the fee and the certificate all go through it. You still identify yourself once, at OCR or, under OCR's notice of 2082/12/26, before your local level's chair or deputy chair or your ward chair.

Two documents found the company. The Memorandum of Association (प्रबन्धपत्र) states the name, the objectives, the capital and who holds which shares. The Articles of Association (नियमावली) set how it is run: meetings, directors, share transfers, accounts. OCR publishes model forms in Nepali for both, and the capital you type in CAMIS must match them exactly.

OCR's fee is charged on the authorised capital (अधिकृत पूँजी), the most the company may issue, not on the money paid in, under the schedule published in the Nepal Gazette on 2064/02/14. A company that raises its authorised capital later pays the difference between the two bands. Many small companies start at Rs 1 lakh: the law sets no minimum for a private company, and Rs 1,000 is the lowest fee.

How long it takes: OCR publishes no number of days on the pages we read. Practitioners quote 4 to 14 days with complete papers, and the government's 2083/84 policy and programme promised one-day company registration. The usual delay is a mismatch between the capital in CAMIS, the MoA and the shareholding table.

• The application in CAMIS (OCR's Schedule 1).
• The MoA and AoA on OCR's model, every page signed by every founder, with one witness for each founder.
• Each founder's citizenship, certified, with National ID and personal PAN, which CAMIS and law firms now ask for.
• Any agreement among the founders, and any regulator's prior approval if your objective needs one.
• For a company as a shareholder: its registration certificate and the board decision naming its representative.

Registration makes the business exist in law; a few more steps come before the first sale. OCR's own page lists the duties that come next for a company, and a firm has the same ones apart from OCR.

• PAN: one per business, from IRD, before you start trading. A firm applies on IRD's portal and the office checks it; a company's, law firms report, comes through CAMIS with the registration. IRD's material shows no fee to register one, and the Finance Act 2083 removed the Rs 100 fee for a copy of the certificate. The owner's personal PAN is a separate number: see PAN card in Nepal.
• VAT (मूल्य अभिवृद्धि कर): 13%. Register when your taxable turnover in twelve months passes Rs 50 lakh for goods, or Rs 30 lakh for services or a mix; you may also register sooner by choice. The VAT Act asks you to register within 30 days of starting a taxable trade, to display the certificate where you trade, and to file a return every month; from 2083/84 small and cottage industries may file every 4 months instead.
• Local registration (व्यवसाय दर्ता) with your ward or municipality, with copies of your other certificates, then a yearly business tax (व्यवसाय कर) that each local body sets in its own Finance Act.
• Licences: a sector licence before you start, if your trade needs one: food, medicine, tourism, education, transport, finance. A company tells OCR within 15 days of receiving it.
• Bank account in the business's name. For a company, each shareholder pays the share money from their own account, so the bank statement proves who paid for which shares.
• Signboard: the Companies Act asks for a signboard in Nepali at the registered office and places of business, and "प्रा.लि." after a private company's name.
• Selling online: under the E-Commerce Act 2081, list on the Department of Commerce's portal before you start (its notice of 2083/05/01).

Government fees are the smallest part of starting a business; rent, its deposit, fittings, stock and working capital are the large ones, and only you can price those. What can be priced is the paperwork. The chart sets the two schedules we could read side by side. A company pays on authorised capital, a proprietorship industry on fixed capital, so the bars compare fees, not like for like.

At Rs 10 lakh, a private company pays OCR Rs 9,500; a proprietorship industry with that fixed capital pays Rs 12,000, or nothing if it qualifies as a micro-enterprise. A plain shop registered with the municipality pays whatever its Finance Act sets.

Company tax

25%

Banks, telecom, tobacco

30%

Sole firm, first band

1% waived

VAT

13%

A sole proprietor is taxed as a person, on the same slabs as a salary: 1%, 10%, 20%, 27%, 29%, the top rate of 29% from Rs 40 lakh. IRD's rate sheet for 2083/84 adds one line that matters to a new shop: for a taxpayer registered as a sole proprietorship firm, the 1% on the first Rs 10 lakh is not charged. A registered sole proprietor with Rs 10 lakh of taxable profit or less pays no income tax; the next rupee pays 10%.

A company pays 25% on its profit, or 30% in banking, insurance, telecom, tobacco and alcohol. When it pays the rest out as dividends, 5% more is withheld, as a final tax. A partnership firm of fewer than 20 partners counts as an "entity" in the Income Tax Act, like a company, so it pays the entity rate too; how the partners' shares are then treated is a question for your IRD office. The table works the same taxable profit both ways, using the site's tax code. At Rs 8 lakh the sole proprietor pays Rs 0 and the company route Rs 2,30,000; at Rs 20 lakh, Rs 1,50,000 against Rs 5,75,000; at Rs 50 lakh, Rs 9,45,000 against Rs 14,37,500.

Small traders need not keep the accounts a profit calculation needs. Under the Income Tax Act, a resident person whose business turnover is up to Rs 30 lakh and taxable income up to Rs 3 lakh can pay a fixed presumptive tax (पूर्वानुमानित कर) instead: Rs 7,500 a year in a metropolitan or sub-metropolitan city, Rs 4,000 in a municipality, Rs 2,500 elsewhere. They file IRD's D-01 return.

Above Rs 30 lakh, up to Rs 1 crore, with taxable income up to Rs 10 lakh and no doctor's, engineer's or other consulting income, the turnover tax (कारोबारमा आधारित कर) applies on the D-02 return. It is the same fixed amount for the first Rs 30 lakh, then a percentage of turnover in two bands. The percentage depends on what you sell.

• Grocery in a municipality, turnover Rs 40 lakh: Rs 4,000 for the first Rs 30 lakh, plus 1% of the next Rs 10 lakh, a year's tax of Rs 14,000.
• Tailor in a metropolitan city, turnover Rs 45 lakh: Rs 7,500 for the first Rs 30 lakh, plus 2% of the next Rs 15 lakh, a year's tax of Rs 37,500.
• Gas dealer in a rural municipality, turnover Rs 45 lakh: Rs 2,500 for the first Rs 30 lakh, plus 0.25% of the next Rs 15 lakh, a year's tax of Rs 6,250.

Nepal's tax and company year runs from 1 Shrawan to the end of Asar. Most deadlines fall at a month's end, and missing them costs a fee that grows. The drawing is the year at a glance; the table gives the dates for 2083/84.

A business that expects to owe income tax pays it during the year, not after: three advance-tax instalments (किस्ता) bring the total paid to 40%, 70% and 100% of the year's estimated tax, and the return after the year settles the difference.

None of it works without books. Keep a record of every sale and every expense from the first day, with bills: nothing else proves your profit, your VAT or your turnover when IRD asks. A company keeps double-entry books under the Companies Act, banks its cash beyond what the board allows in hand, and sends its annual return (वार्षिक विवरण) to OCR: the audited accounts, the AGM minute and the shareholder list.

• Pay large bills through the bank. A business with turnover over Rs 20 lakh cannot deduct a single cash payment above Rs 25,000; the Finance Act 2083 lowered the limit from Rs 50,000. Pay suppliers by cheque, transfer or QR.
• Issue a proper bill with your PAN on every sale; IRD's portal now offers electronic invoicing, and buyers can check a PAN on IRD's PAN search.
• Keep the business money apart from your own. A shopkeeper who pays the house rent from the till cannot tell whether the shop makes money.
• For a company: appoint an auditor and send the name to OCR within 15 days; minute every board meeting and the AGM. The meeting minute maker writes a minute in Nepali.
• A tax clearance certificate (कर चुक्ता प्रमाणपत्र) for the business, which banks and tenders ask for, needs the returns filed and the tax paid: see tax clearance certificate in Nepal.

An employer registers with the Social Security Fund and registers each employee on SSF's employer portal. Every month it pays 20% of basic salary on top and deducts 11% from the employee, and deposits both within 25 days of the month's end. The Act sets no separate enrolment deadline for a new employer, as a law firm reads it, but contributions are owed from the first day of the job.

No one may be paid less than the minimum wage: Rs 19,550 a month, a basic of Rs 12,170 and a dearness allowance of Rs 7,380, in force since 1 Shrawan 2082 and not revised for 2083/84. Tax withheld from salaries is deposited within 25 days of each month too.

• A written contract with the job, pay, hours, probation and notice: the employment contract maker follows the Labour Act 2074, and the appointment letter maker writes the letter.
• A payslip every month showing basic pay, allowances, the SSF lines and tax: the salary slip maker.
• The employee's PAN before the first salary: a salary paid to someone without a PAN is not a deductible expense beyond small amounts (PAN card in Nepal).
• What else the law adds: festival allowance, gratuity, leave and overtime are in Dashain bonus, gratuity and SSF; the wage floor in minimum salary in Nepal.

There is no separate registration for a small or home business: it is a firm, registered with the local body under its province's rules, and it pays tax like any other. What changes is the tax method (presumptive tax for the smallest) and, for online sellers, one more listing.

• Selling online or on social media: the E-Commerce Act 2081 asks anyone selling goods or services through a website, an app or a social-media marketplace to set up the platform and list with the Department of Commerce before trading. The Department's notice of 2083/05/01 (17 August 2026) warns of action against unlisted sellers.
• Freelancers paid from abroad: a resident who is not running a registered business and is paid in foreign currency for software, consulting or social-media content has 5% withheld by the bank or remitter, and the Finance Act 2083 makes it final. Once you trade as a business, register it and file returns instead.
• Students: there is no student category; the same rules apply as to anyone. A firm, or a company at Rs 1 lakh of authorised capital for Rs 1,000, are the cheap ways in. The SSF, PAN and VAT duties start when you hire, earn or pass the threshold, not before.
• Coming back from abroad: money saved abroad can fund a business at home, and there is a concessional loan for returnees (below). Bringing the money home and investing it are covered in investing in Nepal from abroad.

The government pays part of the interest on concessional loans (सहुलियतपूर्ण कर्जा) made by banks to target groups. Under the 2082 procedure, as Ekantipur reported it, the subsidy is 3%, banks may charge at most their base rate plus 1.5%, and one member of a household may borrow. A startup loan is made against the project, with a family guarantee. The table gives NRB's limits as reported in October 2026, for a scheme that runs to the end of Asar 2087.

• The limits have changed. A 2025 report gave Rs 20 lakh for the two youth loans; the newer October 2026 report gives Rs 25 lakh. The women's subsidy was 6% before the 2082 change. Ask the bank for the current figure.
• Startup Enterprise Loan: a separate scheme of the Ministry of Industry. Its Kartik 2082 call offered up to Rs 25 lakh at 3%, with proposals due within 21 days. We found no call for 2083/84 by 5 November 2026; watch the Department of Industry's notices.
• Tax holidays: a micro-enterprise pays no income tax for 7 years (10 if a woman runs it). A startup the Department designates as innovative, with turnover up to Rs 10 crore, pays none for 5 years. Anyone who gives a startup seed money may deduct up to Rs 1 lakh each for up to 5 startups.
• Women: 35% off the registration fee for a firm or industry she owns alone (Industrial Enterprise Act 2076, s.27).

A business that simply stops trading is not closed. The registration stays, and the duties with it. OCR's fines keep adding up every year, IRD still expects a return for every year the PAN is active, and a VAT registration still expects a return every month. Many people find out years later, when they need a tax clearance or a new registration. Closing properly, deregistration (दर्ता खारेजी), is cheaper than leaving it, and until the end of Poush 2083 it is cheaper than usual, under four amnesties in the Finance Act 2083. After them come the steps to close.

• A company behind with OCR: under the Finance Act 2083 (s.48), file 2082/83's returns and pay that year's dues, and every earlier fee and fine is waived, whether you continue or close. OCR's notice of 2083/07/17 extended the deadline to the end of Poush 2083 (14 January 2027).
• A PAN never used: file 2082/83's return, pay its tax plus 1%, and apply to close or continue by the end of Poush 2083. The older returns and fines are waived. With no application, IRD cancels the PAN by itself (s.40(2)).
• Income earned without a PAN: take a PAN and file 2079/80 to 2082/83 by the same date, with no fees or interest; earlier years are not asked for (s.40(1)).
• VAT returns missing: file the returns up to Chaitra 2082 and pay the tax plus 1% by the end of Poush 2083; interest and fines are waived (s.41).

1. 1Settle the tax: file every return up to the last year and pay what is due, so IRD can give a clearance.
2. 2Cancel the VAT registration if you have one: IRD cancels it when turnover falls below the threshold or after twelve months of nil returns.
3. 3Close the registration at the office that made it: a firm at its ward, province or department; a company at OCR, which charges Rs 1,000 up to Rs 10 lakh of paid-up capital and Rs 5,000 above, and accepts the identification at your local level.
4. 4Close the PAN at your IRD office, and the local registration with the ward.

1. 1Test the idea with ten paying customers and a written list of every cost.
2. 2Choose the form with the three questions above, and visit your ward office with your citizenship.
3. 3Register: a firm where the ward sends you; a company in CAMIS (camis.ocr.gov.np), starting at Rs 1,000.
4. 4Get the PAN, open the business bank account, and register for VAT if you will pass Rs 30 lakh of services or Rs 50 lakh of goods in a year.
5. 5Put the calendar above on your wall: the 25th of every month, and the ends of Asoj, Poush, Chaitra and Asar.
6. 6Hire properly: SSF registration, a written contract, at least Rs 19,550 a month.