CompassSectors

Starting a business in Nepal

नेपालमा व्यवसाय सुरु गर्ने तरिका

Most young Nepalis start as a sole proprietorship or partnership firm, then add a PAN, a local business licence and, if they hire people, Social Security Fund registration. A private limited company suits you when you have partners, outside money or want limited liability. Government loans for youth, women, returnees and startups exist but are slow and bank-dependent, so plan to start small with your own money.

Research as of 2026-10. Fees, rules and loan terms change often. Items marked Check rest on secondary sources, so confirm them with the office or on its website before you pay or sign anything.

The market today

Nepal has a large informal economy and a steady flow of young people who start shops, food businesses, farms and online services because jobs are scarce and remittance money is available for seed capital. Registration is split across several levels of government: the federal Department of Commerce, Supplies and Consumer Protection and the Office of the Company Registrar handle firms and companies, the Inland Revenue Department handles tax, and your municipality handles the local business licence and local tax. Several services have moved online (company registration through CAMIS, firm registration through the Department of Commerce portal, tax through the IRD taxpayer portal), which reduces the need for middlemen. The rules and thresholds change with each year's budget and Economic Act, so check the current figure before you act.

  • The Department of Commerce, Supplies and Consumer Protection (Babarmahal, Kathmandu) runs firm registration, with a user manual covering registration, renewal, amendment and cancellation, and an online portal for firm and company services.doc.gov.np (opens in a new tab)
  • Company registration is done online through the CAMIS system of the Office of the Company Registrar; fees are calculated automatically by the system.camis.ocr.gov.np (opens in a new tab)Check
  • The IRD has a taxpayer portal at taxpayerportal.ird.gov.np and a newer one at taxpayerportalb.ird.gov.np, plus a public PAN search tool.ird.gov.np (opens in a new tab)
  • Reported VAT registration thresholds for FY 2082/83: turnover above NPR 50 lakh for goods, NPR 30 lakh for services and mixed businesses, measured over 12 months. Standard VAT rate is 13%. Some sectors must register from the first sale.lawalpine.com (opens in a new tab)Check
  • Monthly VAT returns are generally due by the 25th of the following Nepali month.lawalpine.com (opens in a new tab)Check
  • Minimum monthly remuneration since 1 Shrawan 2082 is NPR 19,550 (basic NPR 12,170 plus dearness allowance about NPR 7,380).thehimalayantimes.com (opens in a new tab)Check
  • Revised concessional loan procedure (in effect from August 2025) sets ceilings of NPR 25 lakh for women entrepreneurs, NPR 20 lakh for returnee migrant self-employment, NPR 20 lakh for educated youth projects, NPR 20 lakh for Dalit entrepreneurship and NPR 25 lakh for startup enterprises. NRB covers any interest subsidy the government does not pay.nepsetrading.com (opens in a new tab)Check
  • Startup enterprise loans are applied for through the Industrial Enterprise Development Institute (IEDI). A November 2025 call reported a limit of NPR 20 lakh, down from NPR 25 lakh earlier.english.onlinekhabar.com (opens in a new tab)Check
  • Social Security Fund registration is compulsory for private-sector employers, with total contribution of 31% of basic salary (20% employer, 11% employee).pioneerlaw.com (opens in a new tab)Check
  • The Youth and Small Entrepreneur Self Employment Fund (Ministry of Youth and Sports) has recently lent mainly through cooperatives, which it invites to submit loan proposals.nepsetrading.com (opens in a new tab)Check

What drives demand

  • Few formal jobs for the number of young people entering the workforce
  • Remittance savings and returnee migrants looking for something to do at home
  • Growth of online selling, delivery, digital services and tourism
  • Government loan schemes aimed at youth, women, returnees and startups
  • Online registration that makes formalising cheaper than before

Challenges

  • Several offices at different levels, each with its own paperwork
  • Collateral demands from banks even on subsidised loans
  • Slow release of subsidised loans and uneven bank participation
  • Rules, fees and thresholds that change with each budget
  • Small markets and heavy competition in common businesses such as retail and food
  • Tax and VAT compliance is hard without a basic bookkeeping habit

Where in Nepal

  • Kathmandu Valley, Pokhara, Biratnagar, Butwal and Birgunj: largest customer base and easiest access to registration offices and banks
  • Hill and Terai towns with returnee populations: strong demand for agro-processing, workshops and local services
  • Tourism areas (Pokhara, Chitwan, Everest and Annapurna regions, Lumbini): homestays, guiding, cafes and crafts
  • Rural municipalities: local licence and taxes are set by the municipality, so costs differ place to place

Business and work ideas

Small retail shop or kirana

medium risk

Neighbourhood grocery, stationery, mobile accessories or general store. Easy to start, thin margins, depends on location and credit control.

Skills
Stock control, Basic bookkeeping, Customer dealing
Suits
People with a shop location and modest savings
Note
No source found for typical cost, so left null. Check VAT threshold if sales grow.

Food business (momo, tea shop, bakery, tiffin, cloud kitchen)

medium risk

Small restaurant, street food or home-based delivery kitchen. Demand is steady but hygiene and local licences matter.

Skills
Cooking, Costing, Food hygiene
Suits
People who cook well and can handle long hours
Note
Local licence from the municipality; food-related permissions may apply.

Commercial farming (vegetables, poultry, goat, fish, mushroom)

medium risk

Small commercial farm, often supported by agriculture loans and local government programmes. Returnees often choose this.

Skills
Farming, Market linkage, Animal or crop care
Suits
People with land or lease access outside big cities
Note
Agriculture and livestock concessional loans exist with a much higher ceiling than other categories.

Online seller or social commerce

medium risk

Selling clothes, crafts, gadgets or local products through Facebook, Instagram, Daraz or own site. Low entry cost but needs delivery and returns handling.

Skills
Social media, Photography, Customer service
Suits
Students and young people with limited capital
Note
Register the firm and get a PAN before sales grow; the tax authority treats online sales as business income.

Freelance digital services (design, web, video, IT support, accounting)

low risk

Service business run by one person or a small team, often selling to clients abroad. Needs almost no capital.

Skills
A marketable digital skill, Client communication, Invoicing
Suits
Graduates and self-taught skilled workers
Note
Service income needs a PAN; certain consulting and professional services must register for VAT regardless of turnover per a secondary source.

Repair and workshop trades (mobile, electrical, plumbing, motorbike, tailoring)

low risk

Skills-based micro business using a TSLC or CTEVT skill. Steady local demand, tools are the main cost.

Skills
Technical trade skill, Customer trust
Suits
Skill-training graduates and returnees with overseas trade experience
Note
Possible to qualify for returnee self-employment loans.

Beauty, salon and wellness services

medium risk

Salon, spa, mehendi or training studio, a common women-led business.

Skills
Training certificate, Hygiene, Customer care
Suits
Women and young people with a vocational certificate
Note
Women entrepreneur loan ceiling is higher than most categories.

Tourism services (homestay, guiding, trekking, cafe, rentals)

high risk

Homestay, local tours, rentals and small cafes in tourist areas.

Skills
Languages, Hospitality, Local knowledge
Suits
People living in tourist areas
Note
Seasonal and shock-prone. Some activities need tourism-department licences.

Technology or product startup

high risk

An innovation-based business that may qualify for the government startup enterprise loan if it meets age, turnover and innovation tests.

Skills
Product building, Business planning, Fundraising
Suits
Graduates with an original idea and a team
Note
Eligibility rules changed between the 2079 and 2081 procedures; confirm the current text.

Step by step

  1. Pick the business and the legal form

    Decide what you will sell and who owns it. Sole proprietorship (private firm) for one owner, partnership firm for two or more people sharing profit and risk, private limited company for limited liability or investors, cooperative for a member-owned group. A firm owner is personally liable for debts, a company owner is generally liable only up to share capital.

    Where
    Your own decision; ask the Department of Commerce, Supplies and Consumer Protection or the municipality economic unit if unsure
    Level
    private
    Time
    A few days of planning
  2. Get a ward office recommendation and prepare documents

    Collect citizenship copy, photos, premises ownership or rental proof and a ward recommendation letter to support registration and the local licence.

    Where
    Ward office
    Level
    local
    Documents
    Citizenship certificate copy, Passport photos, Rental agreement or ownership proof, Ward office recommendation letter
    Time
    1 to 3 days (secondary source)
  3. Reserve a unique business name

    Your firm or company name must not clash with existing ones. For a company, reserve the name in English and Nepali in CAMIS and have alternatives ready.

    Where
    Department of Commerce online portal (firms); CAMIS (companies)
    Level
    federal
    Documents
    Three or more name options
    Time
    1 to 2 days for firm name approval (secondary source)
  4. Register the firm or company

    Firm: apply to the Department of Commerce, Supplies and Consumer Protection (or the local authority where local registration applies). Company: create a CAMIS account, draft the Memorandum and Articles of Association, upload documents, pay fees online, and show originals for verification. Industrial businesses (manufacturing, processing) are registered under the Industrial Enterprises Act at the relevant industry office rather than as a pure trading firm.

    Where
    online.doc.gov.np for firms; camis.ocr.gov.np for companies; Department of Cottage and Small Industries or provincial industry office for small industries
    Level
    federal
    Documents
    Citizenship and photos of owners or directors, Premises proof, Partnership deed (partnership firms), Memorandum and Articles of Association (companies), Director consent letters (companies)
    Fee
    NPR Depends on declared capital. Companies: fee slab calculated by CAMIS. Firms: fee set by capital, exact schedule not confirmed.
    Time
    About 3 to 7 working days for firms (secondary source); company time not confirmed
  5. Get a PAN

    A Permanent Account Number is your tax ID and is needed for invoices, bank accounts and tax filing. Companies apply after incorporation using the incorporation certificate. Firms apply after registration.

    Where
    Inland Revenue Department taxpayer portal or Taxpayer Service Office
    Level
    federal
    Documents
    Registration certificate, Citizenship or NID of owner or directors, Proof of business address
    Time
    1 to 2 days (secondary source)
  6. Register for VAT only if you need to

    VAT registration is required once turnover crosses the threshold, or from day one for some listed sectors. Below the threshold you can register voluntarily. Apply within 30 days of becoming liable.

    Where
    Inland Revenue Department
    Level
    federal
    Documents
    PAN, Business registration certificate, Premises details
  7. Get the local business licence and pay local tax

    Register the business with your municipality or rural municipality and pay the local business tax and licence fee. Rates and rules differ by local government.

    Where
    Municipal or rural municipality office
    Level
    local
    Documents
    Firm registration certificate, PAN, Ward recommendation, Premises proof
  8. Open a business bank account

    Open a current account in the firm or company name. Companies also deposit paid-up capital and give a board resolution and signatures.

    Where
    Any bank
    Level
    private
    Documents
    Registration certificate, PAN, Owner or director ID, Board resolution (companies)
    Time
    A few days
  9. Register with the Social Security Fund before you hire

    Private employers must enroll with the SSF, then enroll their staff. Contribution is 31% of basic salary in total (20% employer, 11% employee).

    Where
    Social Security Fund employer portal
    Level
    federal
    Documents
    Registration certificate, PAN, Employee list
  10. Meet labour requirements

    Give each worker a written employment agreement and pay at least the minimum remuneration (NPR 19,550 per month from Shrawan 2082).

    Where
    Your business; labour office for disputes
    Level
    private
    Documents
    Written employment agreement
    Time
    Before the first day of work
  11. Protect the brand with a trademark (optional)

    Register your brand name or logo at the Industrial Property Section of the Department of Industry. Registration lasts 7 years and can be renewed.

    Where
    Department of Industry, Industrial Property Section, Kathmandu
    Level
    federal
    Documents
    Application, Logo or mark, Business details
  12. Renew, file and keep records every year

    Renew the firm registration and local licence on time, file VAT returns monthly (if registered), and file income tax returns. Estimated return and advance tax apply to larger taxpayers; the annual return is due within 3 months of the fiscal year end (extendable). Companies need an annual audit. Keep invoices and books.

    Where
    Department of Commerce, municipality, IRD
    Level
    federal
    Documents
    Tax clearance, Books and invoices, Audit report for companies
    Time
    Annual

Permits, licences and registrations

Firm registration (sole proprietorship / private firm, partnership firm)

Issued by
Department of Commerce, Supplies and Consumer Protection, or local authority
Needed when
Starting a trading or service business as a firm
Valid for
Renewed periodically; exact renewal date not confirmed
Law
Private Firm Registration Act 2014 BS and Partnership Act 2020 BS (as reported)
doc.gov.np (opens in a new tab)Check

Company incorporation certificate

Issued by
Office of the Company Registrar
Needed when
Forming a private limited or public company
Fee
NPR Depends on authorised capital; slab calculated by CAMIS
Valid for
Permanent, with annual filings
Law
Companies Act 2063
camis.ocr.gov.np (opens in a new tab)Check

Industry registration (micro, cottage, small industries)

Issued by
Department of Cottage and Small Industries, provincial or local industry office
Needed when
Manufacturing, processing or other industrial activity
Law
Industrial Enterprises Act 2076
dcsi.gov.np (opens in a new tab)Check

Cooperative registration

Issued by
Division Cooperative Office or the relevant cooperative registrar
Needed when
Forming a member-owned cooperative
Law
Cooperatives Act 2074
nepallaws.com (opens in a new tab)Check

VAT registration

Issued by
Inland Revenue Department
Needed when
Turnover above threshold or in a listed sector
Valid for
Ongoing with monthly returns
Law
Value Added Tax Act 2052
lawalpine.com (opens in a new tab)Check

Local business registration and licence

Issued by
Municipality or rural municipality
Needed when
Operating any business in a local area
Valid for
Usually annual; set locally
Law
Local Government Operation Act 2074 and local finance acts
nitipartners.com (opens in a new tab)Check

Social Security Fund employer registration

Issued by
Social Security Fund
Needed when
You employ workers in the private sector
Valid for
Ongoing contributions
Law
Contribution-Based Social Security Act 2074
ssf.gov.np (opens in a new tab)Check

Trademark registration

Issued by
Department of Industry, Industrial Property Section
Needed when
You want legal protection for a brand or logo
Valid for
7 years, renewable
Law
Patent, Design and Trademark Act 2022 BS
mondaq.com (opens in a new tab)Check

Sector-specific licences (food, tourism, health, education, import-export and others)

Issued by
Relevant regulator
Needed when
The business is in a regulated sector
Valid for
Varies
Law
Sector laws
moics.gov.np (opens in a new tab)Check

Offices you will deal with

Private steps

  • Open a business bank accountKeeps business and personal money separate and is often needed for loans and customers.
  • Set up simple booksRecord sales and expenses from day one. Use a notebook or free software. Needed for VAT and tax filing.
  • Hire an accountant or tax practitioner for the first filingWorth it for a company or VAT-registered business to avoid penalties.
  • Write a short business planNeeded for loan applications and clarifies costs, customers and pricing.
  • Insurance and premises safetyCover stock and premises where practical.

Loans, grants and support

Concessional (subsidised) loans for educated youth, returnee migrants, women, Dalit entrepreneurs, agriculture and startups

Loans at a reduced interest rate with ceilings reported at NPR 20 lakh (youth, returnees, Dalit) and NPR 25 lakh (women, startups). Interest rate not confirmed here.

Provider
Commercial banks and financial institutions under Nepal Rastra Bank directive
Who can apply
Vary by category and bank; usually a business plan, citizenship and in some categories a minimum education level (for example bachelor's degree for educated youth) or returnee status. Collateral rules not confirmed.
Check

Startup Enterprise Loan

Loan for innovative young enterprises. Reported limit NPR 20 lakh in the November 2025 call.

Provider
Industrial Enterprise Development Institute (IEDI) under the Ministry of Industry, Commerce and Supplies
Who can apply
Registered private firm, partnership, company or cooperative, operating under ten years, turnover not above NPR 5 crore (as reported), based on innovation and growth potential, not a branch of an existing business, not blacklisted, not a pure importer.
Check

Youth and Small Entrepreneur Self Employment Fund

Seed loans to youth who lack collateral, now lent largely through cooperatives that submit proposals to the fund.

Provider
Ministry of Youth and Sports
Who can apply
Unemployed young people with a business plan; age, limit and rules not confirmed in current sources. Old reports cite NPR 2 lakh per individual.
Check

Women Entrepreneurship Development Fund and women entrepreneur concessional loan

Subsidised credit for women-owned businesses. Current ceiling reported at NPR 25 lakh under the NRB scheme.

Provider
Ministry of Women, Children and Senior Citizens and participating banks
Who can apply
Women-run enterprises; some past procedures asked for nomination by a business association. Current rules not confirmed.
Check

Returnee migrant self-employment loan

Loan up to NPR 20 lakh for returnees starting a business.

Provider
Banks under the NRB concessional loan scheme
Who can apply
Returned migrant workers with proof of foreign employment; documents not confirmed.
Check

Education and training

Short course

Entrepreneurship and small business management training

Providers
Industrial Enterprise Development Institute (IEDI), Department of Cottage and Small Industries programmes, municipality training, Federation of Nepalese Chambers of Commerce and Industry, Nepal Chamber of Commerce, private institutes
Duration
A few days to a few weeks
Entry
Usually open to adults; some programmes target youth, women or returnees
dcsi.gov.np (opens in a new tab)
Short course

Bookkeeping and tax basics for small business

Providers
Private training centres and professional accounting institutes (the ICAN and similar bodies run public courses)
Duration
Days to weeks
Entry
Open
ird.gov.np (opens in a new tab)
TSLC

Technical trade training that can be turned into a business (electrical, plumbing, mobile repair, tailoring and others)

Providers
CTEVT-affiliated institutes
Duration
Typically 15 months to 3 years depending on the programme
Entry
Usually SEE pass or equivalent
ctevt.org.np (opens in a new tab)
Bachelor

BBA, BBS or BBM with entrepreneurship electives

Providers
Tribhuvan University and Kathmandu University affiliated colleges
Duration
3 to 4 years
Entry
10+2 or equivalent
tu.edu.np (opens in a new tab)
Certification

Professional accounting and tax qualifications that support a business or consultancy path

Providers
Institute of Chartered Accountants of Nepal (ICAN) and approved providers
Duration
Several years
Entry
Varies by level
ican.org.np (opens in a new tab)

Careers

Accountant or bookkeeper for small businesses

How to get in
Bachelor in commerce or short accounting courses, plus Tally or similar software skill
ican.org.np (opens in a new tab)Check

Business development officer or loan officer

How to get in
Business degree, joining a bank, microfinance institution or cooperative
nrb.org.np (opens in a new tab)Check

Pitfalls to avoid

  • Running without registration or PAN: you can be fined, you cannot get a bank loan, and you cannot issue valid invoices.
  • Missing yearly renewals of the firm registration and local licence, which can lead to fines or cancellation.
  • Ignoring the VAT threshold: register within 30 days of crossing it or you can face penalties.
  • Paying middlemen big fees for what is now an online, low-fee process. Use the official portals, and ask for the receipt for any government fee.
  • Believing agents who promise guaranteed subsidised loans. Banks decide, and many applicants wait months.
  • Paying below the minimum remuneration or skipping written employment agreements.
  • Skipping Social Security Fund registration when you hire staff.
  • Choosing a company when a firm would do, then missing annual audit and filing duties.
  • Mixing personal and business money, so you cannot show your income to a bank or tax office.
  • Using figures from old blog posts: fees, thresholds and loan limits change with each budget and Economic Act.

Sources

  1. Department of Commerce, Supplies and Consumer Protection, Government of Nepal, read 2026-10-15
  2. IRD home page and taxpayer portals, Inland Revenue Department, read 2026-10-15
  3. Nepal Rastra Bank home page and concessional loan data, Nepal Rastra Bank, read 2026-10-15
  4. Social Security Fund, Social Security Fund, read 2026-10-15
  5. Department of Industry, Government of Nepal, read 2026-10-15
  6. Nepal Law Commission, Government of Nepal, read 2026-10-15
  7. Company Registration Process in Nepal (CAMIS update), nepallaws.com, read 2026-10-15
  8. Banijya Darta Process in Nepal, Niti Partners, read 2026-10-15
  9. VAT in Nepal rates and thresholds 2082/83, Alpine Law, read 2026-10-15
  10. Concessional loan revised guidelines, NepseTrading (news), read 2026-10-15
  11. Applications open for startup loans, Online Khabar, read 2026-10-15
  12. Youth fund reopens loan proposal call for cooperatives, NepseTrading (news), read 2026-10-15
  13. Minimum monthly wage raised to NPR 19,550, The Himalayan Times, read 2026-10-15
  14. Social Security System in Nepal, Pioneer Law, read 2026-10-15
  15. Nepal trademark examination procedure, Mondaq, read 2026-10-15
  16. Cooperatives Act 2074, section 14, nepallaws.com, read 2026-10-15