Liaison Office Registration of a Foreign Company in Nepal
24 April 2022
The registration of a liaison office (also known as contact office) of a foreign company in Nepal is governed by the Companies Act, 2006 (“Companies Act”) and Companies Directives, 2015 (“Companies Directives”). The Office of Company Registrar (“OCR”) is the governing authority to register a liaison office in Nepal.
This questionnaire briefly covers the registration process of a liaison office of a foreign company in Nepal.
1) What is the procedure to register a liaison office?
The procedure to register a liaison office in Nepal is set out below:
2) What is the scope of activities for a liaison office?
As per the Company Directives, liaison office is allowed to:
- maintain liaison on behalf of foreign company;
- help Nepalese clients during import or use of foreign company’s products and services without taking any remuneration; and
- coordinate with the agent of the foreign company in Nepal.
The Companies Act prohibits a liaison office to undertake income generating activities. It is also restricted from undertaking contracts and agreements, marketing of products and services and market promotion and advertising.
3) Is approval from any government authority required for registration of a liaison office?
Generally, approval of government authority is not required for registration of a liaison office.
However, OCR may require approval from relevant government authority for registration depending on the nature of its activities.
4) Is there any requirement of amount to be invested for registration of a liaison office?
Liaison office is not considered as an investment vehicle rather it is only a point of contact for foreign company. A foreign company can send required fund to its liaison office for operational expenses including payment of rent and salary.
5) What is the applicable government fee for registration of a liaison office?
The applicable government fee for registration of a liaison office at OCR is NPR 50,000.
6) What is the timeline for the registration of a liaison office?
It will tentatively take 2 to 3 weeks for the completion of registration process of a liaison office.
7) What are the post registration compliances for a liaison office?
The post registration compliances for a liaison office under the Companies Act are as follows:
- Submission of copy of the annual financial statement, audit report and report of the board of directors prepared for every financial year pursuant to the law of the country where the registered office of foreign company is situated within 3 months of preparation of such statements and reports.
- Submission of certified statements of the Nepalese auditor of the representative office relating to salary, allowance and amounts paid to the employees, consultants or liaison persons; statements of deduction of tax from such payment; payment of rental and expenses for the operation of such office and statements of deduction of tax from such payment within 3 months of completion of the fiscal year.
- Updating information at relevant government authority regarding any change and amendment in submitted documents within 35 days of such change and amendment.
Disclaimer: This article is for informational purposes only and shall not be construed as legal advice, advertisement, personal communication, solicitation or inducement of any sort from the firm or its members. The firm shall not be liable for consequences arising out of actions undertaken by any person relying on the information provided herein.
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