Entry Strategy

When you think of entering Nepalese market, you need to evaluate different options and decide on right strategy. Often we find that international investors have plethora of questions around tax implication and legal process. This could be whether you need to register a subsidiary or operate as a branch? Should you hire local employees or use international consultants? Should you buy shares in an existing company or set up a new company? What will be the corporate tax and WHT implications by these decisions? What are the transfer pricing provisions that apply? Our portal gives you a head start on these aspects.

Prior to making Equity Investment in Nepal or embarking upon the Technology Transfer agreements with a Nepalese company, foreign investor(s) will have to obtain the approval for the equity investment and technology transfer from the Department of Industries (DOI). However, for equity investor(s) in a new venture, the foreign investor(s) will have to perform following additional activities as well:

• Incorporate the company at the Company Registrar’s Office
• Register the industry at DOI
• Registration at Inland Revenue Office to get Permanent Account Number
• Others, if applicable (such as Trademarks/design/patents)

The procedures that are to be followed for seeking approval for foreign investment and technology transfer, company registration, industry registration, tax registrations and other related official procedures are described in different posts in this site.

If you are just tendering in Nepal for a contract, you can work here by registering a branch on basis of contract you won. We have seen practices where the foreign entity only obtains a PAN without registering a branch and operates as a permanent establishment. You can also register a subsidiary or a JV company with a local partner. Each of these decision impacts on how tax principles and provisions are applied and your compliance requirement. Registration process too differs based on the structure you prefer.

Instead of searching for a professional accountant or a lawyer and paying expensive fees, why not subscribe to the portal and get relevant information for your decision making straight away. Check our package page for contents that is relevant for you.