Introduction

In general, Branch Office in Nepal refers to the extension of a Foreign Company that represents the main or the parent company. Any Foreign Companies seeking to have its presence in Nepal, needs to register its Branch Office. However, establishment of a Branch Office does not provide the legal status of a separate legal personality. It shall be considered as the part of Foreign Company operating in Nepal. Such Branch Office can only perform the activities that are allowed in Nepal based on the set objectives of Foreign Company. Such Branch Office must comply with local laws of registration and procedures of Nepal. This article aims to highlight the legal process of Foreign Company’s Branch Office Registration in Nepal.

Governing Law

Companies Act, 2063 (2006)

Section 154 (1) ‘no foreign company can carry out its business transaction in Nepal without registering its branch company in Nepal’

Governing Authority

Office of the Company Registrar (OCR)

Process for Branch Registration

While registering a Branch Office of a Foreign Company in Nepal, the following procedures needs to be fulfilled:

• Application before OCR stating to register a Branch Office
• Receive the approval from the concerned Government Authority. If there is an agreement with the governmental entity to get involved in certain projects, a contract must be made and should also obtain a recommendation letter from the concerned authority to operate the branch office for the execution of the project.
• Apply for the name approval from the OCR Portal. Within 10-14 working days OCR will approve the name.
  (NOTE: the names including CASINO, CONSULTANCY,)

Required Documents

For the establishment of Branch Office or while registering a Branch Office of a Foreign Company in Nepal, following documents are required:

• Company Incorporation Certificate
• Memorandum of Association and Article of Association
• Application for Branch Office Registration in OCR
• Board Resolution of Foreign Company to operate branch office
• Copy of passport of all directors of Company
• Power of Attorney
• Letter of appointment of Authorized Representatives
• Copy of Citizenship/Passport of Representative authorized to receive notices
• Declaration of either directors or representative of Company stating that the documents and information submitted in OCR are true and correct
• Approval letter from concerned government authority of Nepal (if any)
• Agreement executed by foreign company with government authority of Nepal (if any)

(NOTE: All the documents drafted other than Nepali Language needs to be translated and notarized. The identification certificate (such as passport and citizenship) needs to be notarized from the place of the country that issued such certificate.)

Compliance Requirement

After the registration of Branch Office, there are certain compliance that needs to be fulfilled:

• Submit 3 months compliance document at OCR
• Appoint Auditor to prepare for annual financial statement (audit report) of Branch Office
• Submit financial statement at OCR within 6 months of completion of each fiscal year
• Update document at OCR in case there is change in name and address of the foreign company

Such Branch Office compliance has an obligation to do compliance to other prevailing laws of Nepal such as Labor Law, Social Security Law, Tax Law etc.