Industry Registration Process in Nepal

How to Register a Large Industry in Nepal?

Step 1: Preparation of Required Documents and Creating Account

Step 2: Submission of Online Application to DOI

Step 3: Submission of Physical Documents to DOI

Step 4: Examination of Documents and Fee Payment

Step 5: Issuance of Certification of Industry by DOI

Step 6: Tax Registration and Local Ward Registration

Step 1: Preparation of Required Documents and Creating Account

Create an account on the Department of Industry website (doind.gov.np). Essential documents needed include citizenship, signature photograph on white background, approval certificate, rent agreement, land ownership certificate, self-declaration letter (स्वघोषणा पत्र), bank statement, and proof of bank payment. Each phone number can only be used for one account registration. The online portal requires industry classification selection and uploading of all required documents.

Step 2: Submission of Online Application to DOI

Download and complete the application form from doind.gov.np/downloads. Provide comprehensive details including full industry name, nature of industry, classification category (micro, cottage, small, medium, or large), proposed location, machinery specifications, raw materials requirements, chemical usage, packaging details, and industrialist information. The form must be filled accurately as per Industrial Enterprises Act 2076 (2020) guidelines for successful registration.

Step 3: Submission of Physical Documents to DOI

After online submission, submit physical copies to the designated Department of Industry office. Required documents include application form, citizenship copy, photographs, departmental recommendation letter, self-declaration (स्वघोषणा पत्र), bank statement (स्रोत पुष्टि हुने कागजात), proof of bank payment, and relevant approvals. For industries requiring special permission (like arms, ammunition, alcohol production), additional approval from Industrial and Investment Promotion Board is mandatory.

Step 4: Examination of Documents and Fee Payment

The Department examines submitted documents for compliance. Registration fees vary based on capital investment, starting from Rs. 1,000 for capital up to Rs. 100,000, increasing progressively to Rs. 43,000 for capital up to Rs. 100,000,000. Additional fees of NPR 30 per NPR 100,000 apply for larger investments. An application fee of Rs. 100 is mandatory. Corrections may be required if errors are found.

Step 5: Issuance of Certification of Industry by DOI

After receiving the registration certificate, register at the local ward office. Submit ward registration form, rent agreement, land ownership certificate copies, property tax receipt, photographs, citizenship copies, registration certificate, and any additional ward-specific requirements. This step establishes local authority recognition and compliance with municipal regulations. Some wards may require additional documentation based on industry type and location.

Step 6: Tax Registration and Local Ward Registration

Complete tax registration through the Inland Revenue Department (IRD) website (ird.gov.np). Submit PAN application form, citizenship copies, rent agreement, business seal, and local level registration certificate at the IRD office after online application. This final step ensures tax compliance and legal business operation. Industries must maintain ongoing compliance with tax regulations and submit annual reports.

What is Industry Registration in Nepal?

Large Industry registration in Nepal is a formal process through which businesses officially establish their legal status and gain recognition from the government. This crucial step allows companies to operate legally within the country, access various benefits, and contribute to the national economy.

In Nepal, industry registration involves submitting necessary documentation to the appropriate government authority, proving compliance with relevant laws and regulations, and obtaining official approval to commence operations. This process applies to various types of industries, from small-scale enterprises to large manufacturing units.

By registering, industries become part of the formal economy, enabling them to:

1. Access government support and incentives
2. Participate in public procurement processes
3. Obtain loans from financial institutions
4. Engage in legal contracts and agreements
5. Benefit from intellectual property protection

Industry registration is not just a legal requirement but also a strategic move for businesses looking to establish credibility, attract investors, and expand their operations within Nepal’s growing economy.

Which Authority Registers Industries in Nepal?

In Nepal, the primary authority responsible for industry registration is the Department of Industry (DoI), which operates under the Ministry of Industry, Commerce, and Supplies. The DoI plays a crucial role in facilitating industrial growth and development throughout the country.

Depending on the size and nature of the industry, registration may involve different levels of government:

1. Cottage and Small Industries: These are typically registered with the Cottage and Small Industry Office at the district level.
2. Medium and Large Industries: Registration for these businesses is handled directly by the Department of Industry in Kathmandu.
3. Foreign Investment Projects: The Department of Industry also oversees the registration of industries with foreign investment, in coordination with the Investment Board Nepal for large-scale projects.

It’s important to note that while the DoI is the main registering authority, the process often involves coordination with other government bodies such as:

• Ministry of Finance
• Nepal Rastra Bank (for foreign investment)
• Department of Immigration (for businesses involving foreign nationals)
• Relevant local authorities

The DoI not only registers industries but also provides guidance on industrial policies, facilitates technology transfer, and promotes industrial development in line with national economic goals.

What is the Process for Industry Registration in Nepal?

• Step 1: Meet NPR 15 Crore Capital
• Step 2: Company Registration at OCR
• Step 3: Ward and Tax Registration
• Step 4: Submit an Application with Project Proposal
• Step 5: Obtain Approval from the Department of Industry
• Step 6: Additional Permits and Licenses as Required

(Note: It is applicable for Large Industries only)

1. Preliminary Research and Planning:
   • Determine the type and scale of your industry
   • Research applicable laws and regulations
   • Decide on the legal structure of your business (e.g., sole proprietorship, partnership, company)
2. Company Registration (if applicable):
   • Register your company with the Office of the Company Registrar
   • Obtain a Company Registration Certificate
3. Tax Registration:
   • Register for a Permanent Account Number (PAN) with the Inland Revenue Department
4. Prepare Required Documents:
   • Gather all necessary documents (detailed in the next section)
   • Prepare a comprehensive business plan or project report
5. Submit Application:
   • Visit the appropriate registration authority (DoI or local Cottage and Small Industry Office)
   • Submit the application form along with all required documents
6. Initial Screening:
   • Officials review the application for completeness and compliance
   • You may be asked to provide additional information or clarifications
7. Technical Evaluation (if required):
   • For certain industries, a technical evaluation may be conducted to assess environmental impact, land use, etc.
8. Approval Process:
   • The application is forwarded to relevant departments for approvals
   • This may include environmental clearances, location permits, etc.
9. Registration Fee Payment:
   • Once approved, you’ll be notified to pay the registration fee
10. Issuance of Registration Certificate:
    • After fee payment, the industry registration certificate is issued
11. Post-Registration Compliance:
    • Obtain additional permits or licenses specific to your industry
    • Set up systems to ensure ongoing compliance with regulations

This process can vary slightly depending on the type and size of the industry, as well as whether it involves foreign investment. Large-scale or sensitive industries may require additional steps or approvals.

It’s important to approach this process systematically and be prepared for potential delays or requests for additional information. Many businesses find it helpful to work with a legal consultant or a firm specializing in business registration to navigate this process efficiently.

What Documents are Required for Industry Registration?

The documentation required for industry registration in Nepal can vary depending on the type and size of the industry, as well as whether it involves foreign investment. However, here’s a general list of documents typically required:

1. Application Form:
   • Properly filled and signed official application form for industry registration
2. Identification Documents:
   • Citizenship certificate copies of all promoters (for Nepali nationals)
   • Passport copies (for foreign investors)
3. Company Documents (if registering as a company):
   • Company Registration Certificate
   • Memorandum of Association and Articles of Association
   • Board resolution authorizing industry registration
4. Business Plan or Project Report:
   • Detailed description of the proposed industry
   • Financial projections and feasibility study
   • Environmental impact assessment (if applicable)
5. Land and Location Documents:
   • Land ownership certificate or lease agreement
   • Location map of the proposed industry site
6. Tax-Related Documents:
   • PAN (Permanent Account Number) certificate
   • VAT registration certificate (if applicable)
7. Investment Proof:
   • Bank statements or commitment letters showing financial capacity
   • Foreign investment approval from Nepal Rastra Bank (for foreign investments)
8. Technical Specifications:
   • List of machinery and equipment to be used
   • Production capacity details
9. Environmental Clearance:
   • Initial Environmental Examination (IEE) or Environmental Impact Assessment (EIA) report, if required
10. Industry-Specific Licenses or Approvals:
    • For example, food industries might need approval from the Department of Food Technology and Quality Control
11. Partnership Deed (for partnership firms):
    • Notarized partnership agreement
12. Power of Attorney:
    • If someone other than the proprietor/partners/directors is submitting the application
13. Photographs:
    • Recent passport-sized photographs of promoters/directors
14. CV or Biodata:
    • Of the main promoters, especially for technical industries
15. NOC (No Objection Certificate):
    • From local authorities or specific departments, if required

Remember, this list is not exhaustive, and additional documents may be required based on the specific nature of your industry or any unique circumstances. It’s always advisable to check with the Department of Industry or a legal consultant for the most up-to-date and specific requirements for your particular industry.

Ensuring all documents are complete, accurate, and properly formatted can significantly speed up the registration process and reduce the likelihood of delays or rejections.

How are Industries Classified in Nepal?

In the context of Nepal, Classification of industries has been conducted based on capital, assets, goods, and services, including micro, cottage, small, medium, and large industries, energy, IT, agriculture, tourism, and manufacturing sectors.

Classification	Type	Characteristics	Relevant Schedules
On the basis of capital and asset	Micro Industry	Fixed capital not exceeding Rs 2,000,000; max 9 workers including entrepreneur; annual transaction < Rs 10,000,000; capacity ≤ 20 KW.	Without prior approval from the Nepal government.
	Cottage Industry	Labour-oriented; uses specific skills/local raw materials; energy capacity ≤ 50 KW.	Includes handloom, dyeing, tailoring, handmade goods (metal, paper, etc.), traditional arts, and stone or fiber products as per Schedule 2.
	Small Industry	Fixed capital ≤ Rs 150,000,000.	–
	Medium Industry	Fixed capital > Rs 150,000,000 but ≤ Rs 500,000,000.	–
	Large Industry	Fixed capital > Rs 500,000,000.	–
On the basis of goods and services	Energy-based Industry	Engaged in energy/power generation, transmission, or related activities.	Includes energy from water, wind, solar, coal, biomass, or fuel; machinery manufacturing for energy generation; electricity systems; bio-gas energy; co-production in sugar industries; energy studies (Schedule 3).
	Manufacturing Industry	Manufacturing goods using raw or semi-processed materials.	–
	Agriculture/Forest-based	Manufacturing goods from agricultural/forest raw materials or related industries.	Includes fruits farming/processing, animal husbandry, dairy, fishery, animal feed production, etc. (Schedule 4).
	Mining Industry	Producing metal or minerals by excavation or processing.	–
	Infrastructure Industry	Building/operating physical infrastructure.	Includes roads, bridges, airports, industrial complexes, energy lines, housing, sports facilities, water systems, etc. (Schedule 5).
	Tourism Industry	Engaged in tourism services and activities.	Includes hotels, travel agencies, adventure sports (trekking, skiing, bungee, etc.), rural tourism, water parks, wildlife reserves, and museums (Schedule 6).
	Information Technology	Providing IT/communication services or disseminating technology.	(A) Tech parks, software development, data centers, cloud computing, BPO/KPO, digital services. (B) Internet, telecom services, satellite networks. (C) FM/digital radio, TV, DTH services, studios, print/audio-visual industries (Schedule 7).
	Service Industry	Producing/providing services in various sectors.	Includes workshops, research, consultancy, cultural/recreational, transport, photography, and exhibition services (Schedule 8).

How Long Does Industry Registration Take in Nepal?

The duration of the industry registration process in Nepal can vary significantly depending on various factors. While the government has made efforts to streamline the process, the actual time taken can range from a few weeks to several months. Here’s a breakdown of what affects the timeline:

1. Type and Size of Industry:
   • Smaller industries or cottage industries may be registered more quickly, often within 2-4 weeks.
   • Large-scale industries or those requiring extensive environmental assessments may take 3-6 months or longer.
2. Completeness of Documentation:
   • Having all required documents ready and correctly filled out can significantly speed up the process.
   • Incomplete or incorrect documentation can lead to delays of weeks or even months.
3. Nature of the Industry:
   • Some industries, like those dealing with sensitive materials or requiring special permits, may take longer due to additional scrutiny.
4. Foreign Investment:
   • Industries with foreign investment often require additional approvals, which can extend the timeline by several weeks.
5. Location:
   • Industries in remote areas might face longer processing times due to logistical challenges.
6. Workload of the Registering Authority:
   • During peak seasons, the processing time may be longer due to a high volume of applications.
7. Complexity of the Project:
   • More complex projects that require inter-departmental coordination may take longer to process.
8. Environmental Clearances:
   • If an Environmental Impact Assessment (EIA) is required, this can add significant time to the process, potentially several months.
9. Responsiveness to Queries:
   • Quick responses to any queries or requests for additional information from the authorities can help expedite the process.
10. Use of Facilitation Services:
    • Engaging professional services or consultants familiar with the process can sometimes help in faster processing.

On average, for a straightforward application with all documents in order, you might expect:

• Small and Cottage Industries: 2-4 weeks
• Medium-sized Industries: 4-8 weeks
• Large Industries or Those with Foreign Investment: 3-6 months or more

It’s important to note that these are general estimates, and actual times can vary. The government of Nepal has been working on digitizing and streamlining the registration process, which may lead to faster processing times in the future.

To ensure the smoothest and quickest registration process:

• Prepare all documents meticulously before submitting
• Respond promptly to any requests for additional information
• Consider seeking professional assistance for complex applications
• Stay in regular contact with the registering authority for updates

Remember, patience and thorough preparation are key to navigating the industry registration process in Nepal successfully.

What are the Costs of Industry Registration?

The costs associated with industry registration in Nepal can vary based on several factors, including the type and size of the industry, its capital investment, and whether it involves foreign investment.

Capital Investment (Rs)	Registration Fee (Rs)
0 – 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
20,000,001 – 30,000,000	22,000
30,000,001 – 40,000,000	25,000
40,000,001 – 50,000,000	28,000
50,000,001 – 60,000,000	31,000
60,000,001 – 70,000,000	34,000
70,000,001 – 80,000,000	37,000
80,000,001 – 90,000,000	40,000
90,000,001 – 100,000,000	43,000
100,000,001 and above	43,000 + NPR 30 per extra NPR 100,000

1. Registration Fee:
   • The basic registration fee is based on the industry’s fixed capital investment.
   • As of 2024, the fee structure typically ranges from NPR 5,000 for small industries to NPR 100,000 or more for large industries.
2. Company Registration Costs (if applicable):
   • Registering a company can cost between NPR 10,000 to NPR 50,000, depending on the type and size of the company.
3. Legal and Professional Fees:
   • If you hire lawyers or consultants, fees can range from NPR 50,000 to NPR 500,000 or more, depending on the complexity of your case and the expertise required.
4. Environmental Impact Assessment (EIA) Costs:
   • For industries requiring an EIA, costs can range from NPR 500,000 to several million rupees, depending on the project’s scale and complexity.
5. Land Acquisition or Lease Costs:
   • These vary greatly depending on location and size but can be a significant portion of your startup costs.
6. Document Preparation and Notarization:
   • Costs for preparing and notarizing various documents can amount to NPR 10,000 to NPR 50,000.
7. License and Permit Fees:
   • Additional licenses or permits specific to your industry may cost anywhere from NPR 5,000 to NPR 100,000 or more.
8. Foreign Investment Approval Fees:
   • For industries with foreign investment, there may be additional fees for approvals from Nepal Rastra Bank and other authorities.
9. Bank Guarantee:
   • Some industries may need to provide a bank guarantee, the amount of which varies based on the nature and size of the industry.
10. Miscellaneous Expenses:
    • These can include travel costs, printing, photocopying, and other incidental expenses, which might add up to NPR 10,000 to NPR 50,000.
11. Annual Renewal Fees:
    • While not part of the initial registration, it’s important to budget for annual renewal fees, which are typically a percentage of the initial registration fee.
12. Tax Registration Fees:
    • PAN and VAT registration fees are relatively nominal but should be factored in.

Total Estimated Cost Range:

• For Small Industries: NPR 100,000 to NPR 500,000
• For Medium Industries: NPR 500,000 to NPR 2,000,000
• For Large Industries: NPR 2,000,000 to NPR 10,000,000 or more

What Laws Govern Industry Registration in Nepal?

Industry registration in Nepal is governed by a framework of laws and regulations designed to promote economic growth while ensuring compliance with national standards. The key legal instruments include:

1. Industrial Enterprises Act, 2076 (2020): This is the primary legislation governing industrial enterprises in Nepal. It outlines the classification of industries, registration procedures, and various incentives and facilities provided to registered industries.
2. Foreign Investment and Technology Transfer Act, 2075 (2019): This act regulates foreign investment in Nepalese industries, detailing the procedures for foreign investors to register and operate businesses in Nepal.
3. Company Act, 2063 (2006): While not directly related to industry registration, this act governs the formation and operation of companies in Nepal, which is often a prerequisite for industry registration.
4. Income Tax Act, 2058 (2002): This legislation outlines the tax obligations of registered industries and provides information on tax incentives for certain types of industries or in specific regions.
5. Labour Act, 2074 (2017): This act sets out the rights and obligations of employers and employees, which registered industries must adhere to.
6. Environmental Protection Act, 2076 (2019): Many industries are required to comply with environmental regulations as part of their registration and operation processes.
7. Industrial Property Act, 2074 (2017): This act protects intellectual property rights, which can be crucial for many industries.

These laws work in concert to create a comprehensive legal framework for industry registration and operation. They aim to:

• Streamline the registration process
• Protect investors’ rights
• Ensure fair competition
• Promote sustainable industrial development
• Safeguard workers’ rights and environmental standards

Understanding these laws is crucial for anyone looking to register an industry in Nepal, as compliance with these regulations is essential for successful registration and ongoing operation.

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What are Post-Registration Requirements for Industries?

After successfully registering your industry in Nepal, there are several post-registration requirements and ongoing obligations that you must fulfill to maintain compliance and ensure smooth operations. These requirements are designed to ensure that industries continue to operate within legal frameworks and contribute positively to the economy. Here are the key post-registration requirements:

1. Annual Renewals:
   • Most industries must renew their registration annually.
   • This typically involves submitting updated financial information and paying a renewal fee.
2. Tax Compliance:
   • Regular filing of income tax returns
   • Monthly or quarterly VAT returns (if applicable)
   • Timely payment of all applicable taxes
3. Labor Law Compliance:
   • Adherence to labor laws, including minimum wage requirements
   • Proper maintenance of employee records
   • Registration with the Social Security Fund (SSF) and regular contributions
4. Environmental Compliance:
   • Regular environmental audits (if required for your industry type)
   • Adherence to pollution control norms
   • Renewal of environmental clearances as needed
5. Financial Reporting:
   • Maintenance of proper books of accounts
   • Annual financial audits by certified auditors
   • Submission of audited financial statements to relevant authorities
6. Foreign Investment Reporting (if applicable):
   • Regular reporting to Nepal Rastra Bank on foreign investment status
   • Compliance with foreign exchange regulations
7. Operational Permits and Licenses:
   • Renewal of industry-specific licenses (e.g., food safety licenses, manufacturing permits)
   • Obtaining and renewing local operation permits
8. Health and Safety Compliance:
   • Maintaining workplace safety standards
   • Regular safety inspections and employee training
   • Compliance with occupational health regulations
9. Corporate Governance:
   • Regular board meetings and maintenance of minutes (for companies)
   • Timely filing of annual returns with the Company Registrar’s Office
10. Intellectual Property Management:
    • Renewal of trademarks, patents, or copyrights as applicable
    • Protection of trade secrets and proprietary information
11. Quality Control:
    • Adherence to national and international quality standards relevant to your industry
    • Regular quality audits and certifications
12. CSR (Corporate Social Responsibility) Activities:
    • Engagement in CSR activities as mandated by law for certain types of industries
13. Update on Changes:
    • Informing relevant authorities about any significant changes in ownership, management, or business activities