Business process outsourcing company registration in Nepal

  

 

Introduction

 

Business process outsourcing company registration in Nepal has emerged as a strategic pathway for entrepreneurs seeking to capitalize on the country's rapidly growing service sector. The BPO industry in Nepal is projected to reach USD 114.50 million by 2029, with an annual growth rate of 7.55% . Over 6,000 BPO firms currently operate in Nepal, serving clients across the United States, Europe, Australia, Japan, and Canada .

This comprehensive tutorial outlines the complete legal framework, step-by-step registration process, and compliance requirements for establishing a business process outsourcing company in Nepal. Whether you are a local entrepreneur or a foreign investor, this guide ensures full regulatory compliance from initial incorporation to operational launch.

What Is Business Process Outsourcing Company Registration in Nepal?

Business process outsourcing company registration in Nepal refers to the legal process of establishing a company that provides outsourced business services to domestic and international clients. The registration is governed by multiple legislative instruments, including the Companies Act 2063 (2006), Industrial Enterprises Act 2076 (2020), and Foreign Investment and Technology Transfer Act 2075 (2019) .

BPO companies in Nepal typically deliver services such as:

Service Category	Description
Customer Support	Call center operations, technical support, helpdesk services
Data Processing	Data entry, transcription, database management
IT Services	Software development, testing, maintenance, cloud solutions
Financial Services	Accounting, bookkeeping, payroll processing
Human Resources	Recruitment, HR administration, talent management
Digital Marketing	Content creation, social media management, SEO services
Legal Process Outsourcing	Document review, legal transcription, case management

The business process outsourcing company registration process in Nepal ensures legal recognition, tax compliance, and operational authorization from relevant government authorities .

Legal Framework for BPO Company Registration in Nepal

The business process outsourcing company registration in Nepal operates under a multi-layered legal structure. Understanding these frameworks is essential for compliance and risk mitigation.

Primary Governing Legislation

Law	Year	Relevance to BPO Registration
Companies Act	2063 (2006)	Company incorporation, governance, shareholder rights
Industrial Enterprises Act	2076 (2020)	Industry classification, incentives, operational permits
Foreign Investment and Technology Transfer Act	2075 (2019)	Foreign ownership, investment thresholds, repatriation
Income Tax Act	2058 (2002)	Tax obligations, incentives, filing requirements
Value Added Tax Act	2052 (1996)	VAT registration, compliance for taxable services
Labor Act	2074 (2017)	Employment contracts, social security, workplace safety
Electronic Transactions Act	2063 (2008)	Data protection, cybersecurity, digital operations

Recent Regulatory Changes (2024-2025)

Significant amendments have simplified business process outsourcing company registration in Nepal:

1. Zero Minimum Investment for IT Sector: As of October 2023, foreign investors in IT and BPO sectors face no minimum capital requirements, making Nepal uniquely accessible for tech startups .
2. Automatic FDI Approval Route: Investments up to NPR 500 million now qualify for immediate online approval, eliminating bureaucratic delays .
3. 5% Final Tax Rate: IT professionals and BPO companies exporting services abroad are taxed at only 5% final income tax, representing a 75% tax exemption .
4. Export Cash Incentives: BPO services qualify for 4-8% cash subsidies based on export value, though recent budget changes have modified these provisions .

Step-by-Step Process for Business Process Outsourcing Company Registration in Nepal

The business process outsourcing company registration process in Nepal involves systematic coordination with multiple government agencies. The complete procedure is outlined below.

Phase 1: Pre-Registration Preparation (Days 1-7)

Step 1: Market Research and Business Plan Development

Before initiating business process outsourcing company registration in Nepal, comprehensive market analysis must be conducted. The business plan should specify:

• Target service categories (customer support, IT outsourcing, data processing)
• Client acquisition strategy (domestic vs. international markets)
• Staffing requirements and skill development programs
• Technology infrastructure needs
• Financial projections and capital requirements

Step 2: Company Name Reservation

The company name must be reserved through the Office of Company Registrar (OCR) online portal. The name must:

• Be unique and non-duplicative
• Reflect BPO service objectives
• Comply with Companies Act naming conventions
• Remain valid for 35 days from approval

Step 3: Determine Legal Structure

Structure	Minimum Capital	Shareholders	Foreign Ownership	Liability
Private Limited Company	NPR 100,000	1-101	100% permitted	Limited
Public Limited Company	NPR 10,000,000	Minimum 7	100% permitted	Limited
Branch Office	As per parent company	N/A	100%	Unlimited
Joint Venture	Negotiable	2+	Variable	Limited

For most business process outsourcing company registration in Nepal, the Private Limited Company structure is preferred due to operational flexibility and lower compliance costs .

Phase 2: Documentation and Submission (Days 8-14)

Step 4: Prepare Constitutional Documents

The Memorandum of Association (MoA) and Articles of Association (AoA) must be drafted in Nepali. These documents must explicitly state BPO service objectives, including:

• Business process outsourcing services
• Information technology enabled services
• Customer relationship management
• Data processing and management services
• Technical support and helpdesk operations

Step 5: Compile Required Documentation

Document	Purpose	Source
Citizenship certificates (Nepali promoters)	Identity verification	Local Administration
Passport copies (foreign investors)	Identity verification	Home country
Proof of registered office address	Physical presence verification	Lease agreement or ownership deed
Passport-sized photographs	Identification	Studio
Foreign Investment Approval (if applicable)	FDI authorization	Department of Industry
Bank solvency certificate	Financial capacity	Banking institution
Power of Attorney	Representation authorization	Legal notarization

Step 6: Submit Application to Office of Company Registrar

The business process outsourcing company registration application is submitted online through the OCR portal (ocr.gov.np). The application must include:

• Completed registration form (Annex 1)
• Two copies of Memorandum of Association
• Two copies of Articles of Association
• Promoter agreement (for private companies)
• Foreign investment approval (for FDI companies)

Phase 3: Government Processing (Days 15-25)

Step 7: Examination by Office of Company Registrar

The OCR conducts thorough examination of submitted documents. Corrections may be requested if deficiencies are identified. Upon satisfactory review, government fees are assessed based on authorized capital.

Step 8: Payment of Registration Fees

Authorized Capital (NPR)	Registration Fee (NPR)
Up to 100,000	1,000
100,001 - 500,000	4,500
500,001 - 2,500,000	9,500
2,500,001 - 10,000,000	16,000
10,000,001 - 20,000,000	19,000
Above 20,000,000	Calculated per lakh

Step 9: Issuance of Certificate of Incorporation

Upon fee payment and final approval, the OCR issues:

• Certificate of Incorporation
• Company Registration Number
• Corporate PAN (in some cases)

Phase 4: Post-Registration Compliance (Days 26-37)

Step 10: Tax Registration (PAN/VAT)

Registration with the Inland Revenue Department is mandatory within 7 days of company registration:

• Permanent Account Number (PAN): Mandatory for all BPO companies
• VAT Registration: Required if annual turnover exceeds NPR 5 million or for specific service categories

Step 11: Industry Registration

BPO companies must register as an industry under the Industrial Enterprises Act 2076. Schedule 7 of the Act classifies BPO under the IT sector, qualifying for associated incentives .

Step 12: Local Business License

A business operating license must be obtained from the local municipality (ward office) where the registered office is located. This requires:

• Company registration certificate
• Office lease agreement or ownership documents
• Municipal business operation tax payment

Step 13: Social Security Fund Registration

Employee registration with the Social Security Fund (SSF) is mandatory under the Labor Act 2074. This provides:

• Medical insurance coverage
• Accident insurance
• Maternity benefits
• Old-age pensions

Step 14: Banking and Foreign Exchange Setup

Account Type	Purpose	Requirements
Corporate NPR Account	Local transactions	Company registration certificate, PAN, board resolution
Foreign Currency Account	International receipts	Nepal Rastra Bank approval, export registration
Investment Account	FDI capital injection	Foreign investment approval, NRB registration

For business process outsourcing company registration in Nepal involving foreign investment, Nepal Rastra Bank registration is mandatory for:

• Foreign currency transactions
• Profit repatriation
• Technology transfer payments

Foreign Investment in BPO Company Registration in Nepal

Foreign investors are permitted 100% ownership in BPO companies under the Foreign Investment and Technology Transfer Act 2075 (2019) .

Key FDI Provisions

Aspect	Requirement	Timeline
Minimum Investment	NPR 0 for IT/BPO sector (waived October 2023)	N/A
Approval Authority	Department of Industry (below NPR 6 billion)	7 working days
Automatic Route	Up to NPR 500 million	Immediate online approval
Repatriation Rights	Full profit and capital repatriation	Post-tax clearance
Land Ownership	Permitted for company operations	After registration

FDI Registration Process

1. Foreign Investment Approval: Submit project proposal, feasibility study, and financial credibility certificate to Department of Industry
2. Company Incorporation: Register with OCR following standard procedures
3. Capital Injection: Transfer investment through banking channels within specified timelines
4. NRB Recording: Register foreign investment with Nepal Rastra Bank within 6 months of remittance
5. Operational Launch: Obtain business license and commence operations

Taxation and Incentives for BPO Companies in Nepal

Understanding tax obligations is critical for business process outsourcing company registration in Nepal.

Corporate Tax Structure (FY 2025-26)

Entity Type	Tax Rate	Notes
Standard BPO Company	25%	General service sector rate
Export Income	20%	20% rebate on export earnings
IT Service Exports	5%	Final tax for foreign currency earnings
Special Industry Status	20%	20% rebate for qualifying industries

Tax Incentives Available

Incentive	Benefit	Eligibility
Income Tax Holiday	5-year exemption	IT companies in specified areas
Export Income Deduction	50% deduction	Export-oriented BPO services
Accelerated Depreciation	Higher rates	IT equipment and infrastructure
Dividend Tax Exemption	No withholding tax	Reinvested dividends
VAT Exemption	Zero VAT	Export services to foreign clients

Compliance Calendar

Deadline	Activity	Penalty for Non-Compliance
Quarterly	Advance tax payments	Interest and fines
Within 3 months of FY end	Annual tax return filing	Late fees, potential audit
Annual	Financial statement audit	Regulatory sanctions
Ongoing	VAT returns (if registered)	Penalties, license suspension

Costs and Timeline for BPO Company Registration in Nepal

Complete Cost Breakdown

Cost Category	Amount (NPR)	Notes
Company Registration	1,000 - 43,000	Based on authorized capital
Legal/Professional Fees	15,000 - 50,000	Document preparation, liaison
Office Setup	500,000 - 2,000,000	Rent, furniture, infrastructure
IT Infrastructure	1,000,000 - 5,000,000	Computers, servers, software
Telecommunications	200,000 - 500,000	Internet, phone systems
Initial Staffing	500,000 - 2,000,000	Recruitment, training
Compliance and Legal	50,000 - 150,000	Ongoing advisory
Total Estimated Cost	2,266,000 - 9,743,000	Variable based on scale

Registration Timeline

Phase	Duration	Cumulative
Name reservation	2-3 days	2-3 days
Document preparation	3-5 days	5-8 days
Company registration	7-10 days	12-18 days
Tax registration	3-5 days	15-23 days
Industry registration	7-14 days	22-37 days
Local licensing	3-7 days	25-44 days
Total Timeline	25-44 days	Standard processing

Expedited processing can reduce timelines by 5-10 days with additional professional fees .

Compliance Requirements for Operating BPO Companies in Nepal

Post-registration compliance ensures legal continuity and operational legitimacy.

Annual Compliance Checklist

Requirement	Frequency	Authority
Annual return filing	Annual	Office of Company Registrar
Financial audit	Annual	Inland Revenue Department
Tax return filing	Annual	Inland Revenue Department
Industry renewal	Annual	Department of Industry
Municipal license renewal	Annual	Local Municipality
SSF contributions	Monthly	Social Security Fund
Labor compliance	Ongoing	Department of Labor

Data Protection and Cybersecurity

BPO companies handling client data must implement:

• Encryption protocols for sensitive information
• Access control systems with audit trails
• Regular security audits and vulnerability assessments
• Incident response plans for data breaches
• Compliance with Electronic Transactions Act 2063

Challenges and Solutions in BPO Company Registration in Nepal

Common Challenges

Challenge	Impact	Solution
Skilled manpower shortage	Operational delays	Partner with training institutions, offer competitive packages
Infrastructure limitations	Service disruption	Establish operations in Kathmandu, Pokhara, or Biratnagar
Regulatory complexity	Compliance delays	Engage professional legal and tax advisors
Bureaucratic processing	Timeline extensions	Utilize automatic FDI routes, ensure complete documentation
Foreign exchange fluctuations	Financial planning difficulties	Hedge currency risk, maintain foreign currency accounts

Best Practices for Smooth Registration

1. Engage Professional Services: Legal firms specializing in business process outsourcing company registration in Nepal can reduce processing time by 30-40%
2. Complete Documentation: Ensure all documents are notarized, translated, and verified before submission
3. Proactive Communication: Maintain regular contact with OCR, DOI, and NRB officials
4. Technology Infrastructure: Invest in reliable internet and power backup systems from inception
5. Compliance Calendar: Establish internal systems for tracking regulatory deadlines

Why Choose Nepal Lawyer Services Pvt. Ltd. for BPO Registration?

Nepal Lawyer Services Pvt. Ltd. provides comprehensive support for business process outsourcing company registration in Nepal. Our services include:

• End-to-end registration support: From name reservation to operational licensing
• FDI facilitation: Foreign investment approval and NRB compliance
• Document preparation: MoA, AoA, and regulatory filings in Nepali
• Tax optimization: Structuring for maximum incentive utilization
• Ongoing compliance: Annual returns, audit coordination, regulatory updates
• Dispute resolution: Legal representation before regulatory authorities

With deep expertise in the Companies Act 2063, Industrial Enterprises Act 2076, and Foreign Investment and Technology Transfer Act 2075, Nepal Lawyer Services Pvt. Ltd. ensures seamless business process outsourcing company registration in Nepal for both domestic and international clients.

Contact Nepal Lawyer Services Pvt. Ltd. today for a consultation on establishing your BPO company in Nepal's growing outsourcing market.

Frequently Asked Questions (FAQs)

What is the minimum capital requirement for BPO company registration in Nepal?

For domestic promoters, the minimum capital is NPR 100,000 for a Private Limited Company. For foreign investors in the IT/BPO sector, no minimum investment requirement applies as of October 2023 .

How long does business process outsourcing company registration in Nepal take?

The complete process typically requires 25-44 days, including company registration, tax registration, industry registration, and local licensing. Expedited processing can reduce this to 15-25 days .

Can foreigners own 100% of a BPO company in Nepal?

Yes, 100% foreign ownership is permitted in BPO companies under the Foreign Investment and Technology Transfer Act 2075 (2019). No local partner is required .

What taxes apply to BPO companies in Nepal?

Standard corporate tax is 25%, but IT service exports qualify for a 5% final tax rate. Export income receives a 20% tax rebate, and VAT is zero-rated for export services .

Is a separate BPO license required in Nepal?

No separate BPO-specific license is required. However, companies must obtain standard company registration, industry registration (under IT sector), PAN/VAT registration, and local business licenses .

Can BPO companies repatriate profits from Nepal?

Yes, full profit repatriation is permitted after tax clearance. Foreign investors must obtain approval from Nepal Rastra Bank and submit tax clearance certificates .

What documents are needed for foreign investment approval?

Required documents include project proposal, feasibility study, financial credibility certificate, passport copies, board resolution, and power of attorney .

Are there special economic zones for BPO companies in Nepal?

Nepal has established Special Economic Zones under the SEZ Act 2073 (2016), offering additional tax incentives. However, operational IT parks are being developed in Kathmandu and other cities .

What is the corporate tax rate for BPO companies in Nepal?

The standard rate is 25%, but companies with Special Industry status pay 20%. IT export services qualify for 5% final tax .

How can profits be repatriated to foreign countries?

Profits can be repatriated through authorized banking channels after obtaining tax clearance and NRB approval. Required documents include audit reports, tax clearance certificates, and board resolutions .

Conclusion

Business process outsourcing company registration in Nepal represents a strategic opportunity in one of South Asia's fastest-growing outsourcing destinations. With zero minimum investment requirements for foreign IT investors, 5% tax rates on export services, and 100% foreign ownership permitted, Nepal offers an exceptionally favorable environment for BPO operations.

The registration process, while involving multiple authorities including the Office of Company Registrar, Department of Industry, Inland Revenue Department, and Nepal Rastra Bank, can be completed efficiently with proper documentation and professional guidance.

For entrepreneurs and investors seeking to establish BPO operations, Nepal Lawyer Services Pvt. Ltd. provides expert navigation of the business process outsourcing company registration process in Nepal, ensuring compliance, optimizing tax structures, and accelerating market entry.

Ready to register your BPO company in Nepal? Contact Nepal Lawyer Services Pvt. Ltd. for a comprehensive consultation and begin your outsourcing business journey today.

Related Resources:

• Office of Company Registrar Nepal
• Department of Industry Nepal
• Inland Revenue Department Nepal
• Nepal Rastra Bank

Disclaimer: This guide is for informational purposes only and does not constitute legal advice. Regulatory requirements may change; consult with qualified legal professionals for current advice specific to your situation.