Starting a business in Nepal is an exciting journey, but the legal paperwork can sometimes feel overwhelming. Whether you are opening a new mart in Jhapa, a cafe in Kathmandu, or a local service agency, getting your registration right from Day 1 saves you from massive headaches and financial penalties later.
The good news? The Nepal government has increasingly digitized these processes. Here is your comprehensive, step-by-step checklist of what you need to do to make your business official, complete with the official links you need to get started.
1. Choose Your Business Structure
Before filling out any forms, you must decide the legal structure of your business. Your choice impacts your liability, taxes, and ability to scale:
Sole Proprietorship (Private Firm): Best for small, single-owner retail shops or local services. You register this directly at the Department of Commerce or your local municipality.
Partnership: Ideal when two or more people start a business together without forming a corporate entity.
Private Limited Company (Pvt. Ltd.): The best option if you plan to scale, hire many employees, or seek outside investment. It legally separates your personal assets from the business's liabilities.
2. Ward Office Registration (Sifaris)
This is your very first physical step. You need to register your business at your local Ward Office to get a recommendation letter (Sifaris). You will generally need to provide your citizenship copy, a rent agreement (if you are leasing a commercial space), and a basic business plan. This recommendation letter is mandatory for the steps below.
3. Office of the Company Registrar (OCR)
(Required only if you are forming a Private Limited or Public Company) If you chose the Pvt. Ltd. route, you must register your company name and structure through the OCR. Thankfully, this process is now highly digital!
Step 1: Go to the official OCR Portal (ocr.gov.np).
Step 2: Reserve your proposed company name (it is smart to have 2 or 3 backup names in case your first choice is already taken).
Step 3: Upload your drafted Memorandum of Association (MOA) and Articles of Association (AOA) in PDF format, along with director details.
Timeline: Name approval usually takes 1–2 days, and the final Certificate of Incorporation takes about 5–10 working days.
4. Department of Commerce or Industry
Depending on your business type, you must register your operations with the appropriate government department:
For Retail, Trading, and Marts: You must register with the Department of Commerce, Supplies and Consumer Protection (doc.gov.np).
For Manufacturing and Production: You must register with the Department of Industry (DOI).
5. Inland Revenue Department (IRD) for PAN & VAT
Once your business entity legally exists, you must register for taxes immediately to open a business bank account and conduct commercial transactions. You can initiate this online via the IRD Taxpayer Portal (ird.gov.np).
PAN (Permanent Account Number): Mandatory for all businesses, regardless of size. It is completely free to register for a PAN.
VAT (Value Added Tax): You must legally register for VAT if your estimated annual turnover crosses the government thresholds:
Goods only (e.g., Grocery Marts, Hardware): Annual sales above Rs. 50 Lakhs.
Services only (e.g., Consulting, Salons): Annual sales above Rs. 20 Lakhs.
Both Goods & Services (e.g., Restaurants, Cafes, Hotels): Annual sales above Rs. 20 Lakhs.
Warning: If you cross these revenue thresholds and fail to register for VAT within 30 days, you can face severe fines of up to Rs. 10,000 for every month of delay, plus a 15% interest charge on unpaid VAT.
Pro Tip for New Founders: Don't wait until tax season to organize your bills. Relying on a paper ledger makes inventory tracking impossible, invites stock shrinkage, and makes filing taxes a nightmare.
Set up a modern, digital billing system on your very first day of operation. Using a platform like Batuly keeps track of every single rupee, manages your stock in real-time, and generates tax-ready reports automatically—saving you time so you can focus entirely on growing your business!
Got specific questions about the registration process in your city? Ask our community experts listed in the batuly community.
