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Can I register a company and conduct no Business? Is it compulsory for a company to have a bank account?

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[Scenerio] We are a group of software developers (there are Nepali citizens in the team too). In order to publish apps in the Apple Store, Play store and similar platforms, we need to have some legal entity. So we would like to register in Nepal a private limited company (IT  Firm). The company is needed just to have a legal entity, it will not perform any operations, transactions, etc.

So here are some questions:

1) Is it possible to have a company that does not conduct any business? Not paying or receiving money, etc.

You can have a company registered and do nothing but pay the TDS on rent (you need to have a rent agreement), file the records regularly, and have an audit yearly. You need to have a rent agreement to get PAN number from the Inland Revenue Department (IRD). The minimum rent amount they generally accept is Nrs. 5000 in major cities. The rate of TDS on rent is 10%.

2) Is it obligatory for the company to have a bank account?

Yes, this is mandatory. You need to have a bank account to get a share certificate from OCR. Opening a bank account is not a tedious job once the company is formed. Any bank in Nepal requires the physical KYC form (as of June 2020) filled by all shareholders and an application letter with the company seal to open an account. For the current account, the minimum fixed deposit range from Nrs 1000- Nrs 25000.

3) Can you assist with registering the company? How much it may cost?

Yes, we do assist in registering the company. Our fee is (as of June 2020):

A company with all Nepali shareholders: Nrs 8000

A company with foreign shareholder:  Nrs 3,50,000

4) Can you perform the maintenance of the company: submit yearly tax reports and so on? How much it may cost?

Yes, we provide those services. The fee depends on the volume of transactions and the nature of your business. For a company with no business, we charge around Nrs. 5000/year to maintain everything. For VAT registered entities, the fee is Nrs. 10,000/year. For the services we provide, please refer to the business services section.

5) What are the requirements for a foreign national to start a business in Nepal? What about the partnership with Nepali citizens?

Please be advised that if you wish to have a foreign national as a shareholder, she must invest a minimum 500,000 USD. You can refer to this article for further details:

For Nepali national, the minimum investment required is Nrs. 1,00,000 (~1000 USD)

6) What about Private Firm or Partnership Firm? Is it the same or can I operate with my personal bank account as well?

The same applies to Private Firms and Partnership Firms as well.

This post is based on the query of our website visitor. If you want to add any questions, please write in the comment below.

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