For international corporations looking to expand their presence in Nepal without establishing a new subsidiary, registering a Branch Office is an excellent alternative. Under the Companies Act, 2063, foreign companies can legally operate in Nepal through a registered branch. This guide explores the registration procedure and compliance requirements at the Office of the Company Registrar in Kathmandu.
1. Branch Office vs. Liaison Office
Before registering, it is important to understand the difference between these two entities:
- Branch Office: Can engage in commercial activities, earn revenue, and enter into contracts within Nepal.
- Liaison Office: Primarily used for information gathering and coordination. A liaison office cannot generate income or conduct any commercial business in Nepal.
2. The Registration Process
The registration of a branch office is handled by the Office of the Company Registrar (OCR) in Kathmandu.
Step 1: Document Preparation
The parent company must prepare resolutions and powers of attorney authorizing the branch setup. All foreign documents must be notarized or apostilled (depending on the country) and translated into Nepali.
Step 2: Application Submission
Submit the application to the OCR including the parent company's registration documents, financial statements, and the proposed activities of the branch in Nepal.
Step 3: Approval and Registration
If the OCR is satisfied with the documentation and the proposed activities, they will issue the Branch Registration Certificate.
3. Post-Registration Compliance
Once the branch is registered, it must adhere to several local laws:
- Tax Registration: Obtain a PAN/VAT number from the Inland Revenue Office.
- Local Permits: Register with the local Ward office and, if required, the Department of Industries.
- Reporting: Submit annual financial statements of the parent company and the local branch to the OCR.
4. Key Documents Required
- Parent Company Registration Certificate.
- Charter/Constitutional Documents (AOA/MOA).
- Board Resolution to open a branch in Nepal.
- Power of Attorney for the local representative in Kathmandu.
- Financial Statements of the parent company from the previous year.
5. Repatriation of Profits
One of the main advantages of a branch office is the ability to repatriate profits made in Nepal back to the parent company. This process must follow the regulations of the Nepal Rasta Bank (Central Bank) and usually requires proof of tax payment.
6. Expert Corporate Lawyer in Kathmandu
Setting up a branch office involves coordinating between your home country's headquarters and the Nepalese authorities. Our Legal Team at LawyerInNepal specializes in cross-border corporate law, ensuring a seamless setup process.
Our Branch Office Services include:
- Notarization and Translation of Global Documents.
- Full OCR Registration and Liaison.
- VAT/Tax Setup and Compliance Advice.
- Repatriation Assistance.
Expand Your Global Business to Nepal:
- Office Location: Purbi Gate, Anamnagar-29, Kathmandu 44600, Nepal.
- WhatsApp Support: +977 9766910908
- Email: lawyerinnepal.com.np@gmail.com
Disclaimer: This article is for general informational purposes. Branch office requirements may vary based on the industry and the parent company's country of origin. Always consult a specialized corporate lawyer.