Branch Office Registration Process of Foreign Company in Nepal

The registration of a branch office of a foreign company in Nepal is governed by the Companies Act, 2006, Section 154 (1) of Companies act incorporates the provision related to the registration of branch office of a foreign company in Nepal.

The Governing Authority for Branch Office registration of Foreign Company in Nepal is the Office of the Company Registrar (OCR).

Criteria of Registration of Foreign branch office in Nepal:

Registration of Branch Office in Nepal requires different Criteria for approvals also operation:

1.  Approval from government authority 

On the basis of the nature of the business and its foreign branch registration in Nepal, from the concerned government              ministry or authority authority is mandatory to operate and establish the business in Nepal.

2. Agreement / Contract of foreign business with any government authority or institution

3. By carrying out any transaction or operating business for a period of one month or more after establishing an office by a foreign company in Nepal.

4.  By appointing any person from Nepal for day-to-day regular service on behalf of a foreign company.  

• A branch office is only allowed to register in Nepal, whose nature of business is permissible in Nepal.
• Business activities of the branch office must be of a similar nature that of business carried in a foreign country.

Step 1: Agreement with the Government or approval to be obtained from the concerned government authority by a foreign company to establish a branch office in Nepal.

Step 2: Application regarding the registration of the branch office along with other required documents,

Step 3: OCR verifies the documents submitted online and if it seems appropriate the process of registration starts after the approval from the Company Registrar's Office.

Step 4: Physical Copy of the documents to be submitted.

Step 5: After fulfilling all the procedures, the OCR issues the certificate of registration.

Step 6: The Branch Office is to be registered at the concerned ward office.

Step 7: VAT/PAN registration

to be submitted online in the official site of the Company registrar (OCR).

The time required for registration of branch office takes one month and additional time is required for the approval form the concerned government offices or authorities.

Following are the post compliance requirement of branch office in Nepal:

1. To be registered at local authority and the Inland Revenue Department for tax purpose to pay income tax in Nepal.
2. Submit a 3-month compliance document before OCR;
3. Information to be updated to the concerned authority if any changes or amendments are made.
4. Submission of the balance sheet of its parent company within 3 months from its preparation date.
5. Appoint an auditor to prepare the annual financial statement (audit report) of the branch office
6. Annual filing each year.

Note: Branch Office has an obligation to comply with applicable laws pursuant to other prevailing Nepalese law including Labor Law, Social Security Law, Tax Law etc. during the process of its operation in Nepal. 

• Liaison Office is a contact point for foreign companies to communicate and coordinate establishing a relationship with local businesses or parties, but the Branch office can do business activities.
• Liaison offices are not permitted to generate income activities, whereas branch offices can earn.
• No any approval form from the government authority is required for liaison office establishment but for a branch office, approvals are required as per nature of business.
• The liaison office cannot do any contract for business or transaction, advertisement and marketing for products of a foreign company, whereas a branch office can do.

• A branch office possesses the same personality with parent foreign company, whereas a subsidiary company is a separate legal personality from the parent company.
• The branch office is liable for activities carried by the foreign company, whereas the parent company is not liable for activities done by the local subsidiary company.

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