Non-Profit Registration

Every non-profit body must be registered before it starts activities, and most must also connect with the Social Welfare Council (SWC).

What Does Non-Profit Organization Mean in Nepal?

A non-profit organisation in Nepal is a legally registered body that works for a public or social purpose and does not distribute earnings to its members, founders or shareholders. Any surplus must go back into the objectives written in its constitution.

Which Legal Forms Can a Non-Profit Take?

Nepal recognises four practical structures:

Association or NGO registered under the Associations Registration Act, 2034 (1977) at the District Administration Office (DAO).
Non-distributing company (non-profit company) registered under Section 166 of the Companies Act, 2063 (2006) at the Office of the Company Registrar.
International Non-Governmental Organisation (INGO) that signs a General Agreement with the Social Welfare Council under the Social Welfare Act, 2049 (1992).
Local-level community organisation or user committee recognised under the Local Government Operation Act, 2074 (2017) by a Rural Municipality or Municipality.

Why Does the Structure You Choose Matter So Much?

The structure decides your registering authority, your renewal cycle, your reporting duties and whether foreigners may join. An NGO under the Associations Registration Act is member-based and renews every fiscal year at the DAO. A non-profit company under the Companies Act is board-based and files annual returns with the Company Registrar. An INGO does not “register” in Nepal at all; it obtains agreements from the SWC to run projects.

Can a Non-Profit Earn Income?

Yes. A non-profit may charge fees, sell publications or run income-generating activities that support its stated objectives. The legal restriction is on distribution, not on earning. Section 166 of the Companies Act clearly bars dividend payment and bars distribution of assets to members, even at the time of liquidation. Similarly, under Section 13 of the Associations Registration Act, if an association dissolves, its remaining assets pass to the Government of Nepal unless the law provides otherwise.

Which Laws and Authorities Govern Non-Profit Registration in Nepal?

Several authorities work together, and skipping one of them is the most common cause of delay.

District Administration Office

The DAO, under the Ministry of Home Affairs, is the registering authority for associations, clubs, societies, forums and NGOs. Section 3 of the Associations Registration Act makes registration compulsory before an association operates. Section 4 requires the applicants to submit a proposed constitution (vidhan) with the objects, membership rules, executive committee structure, funding sources, meeting rules and audit provisions. The DAO issues the registration certificate under Section 5.

Social Welfare Council

The Social Welfare Council was created by the Social Welfare Act, 2049. Its main statutory jobs include coordinating, promoting, monitoring and evaluating social welfare activities and maintaining records of social organisations. Under the Act:

Social organisations may affiliate with the SWC after DAO registration.
Organisations that wish to operate with foreign assistance must obtain SWC approval for the project and the funding.
INGOs must sign a General Agreement with the SWC before working in Nepal, followed by project agreements for each programme.

Application forms, guidelines, affiliation checklists and current fee schedules are published on the official SWC website, swc.org.np. Always confirm the latest checklist there before filing, because the Council updates its formats from time to time.

Office of the Company Registrar

If you choose the non-profit company route, the Office of the Company Registrar (OCR) is your regulator. Section 166 of the Companies Act allows a company to be incorporated for the development and promotion of profession, science, art, literature, sports, social welfare, education, health, environment or similar objectives, on the condition that profits are not distributed. Key statutory points:

At least five promoters are needed.
The word “Limited” is not used at the end of the name.
Prior approval of the concerned government body is required where the intended activity is regulated.
The company cannot be converted into a profit-distributing company.

Which Other Offices Get Involved?

Inland Revenue Department, for a Permanent Account Number and for recognition as a tax-exempt organisation under the Income Tax Act, 2058. Details are available at ird.gov.np.
Nepal Rastra Bank and the concerned ministry, for approval and reporting of foreign grants.
Ward Office and Municipality, for the recommendation letter and for local-level coordination.
Department of Immigration and the Ministry of Home Affairs, for visas of foreign staff of an INGO.

How Do You Register an NGO at the District Administration Office?

This is the most common route for Nepali founders and for mixed teams working with foreign donors.

Who Can Be a Founding Member?

The Associations Registration Act contemplates registration by a group of persons who form an association for a non-profit purpose. In practice, DAOs require the founding committee to be Nepali citizens holding valid citizenship certificates, with a minimum of seven founders in most districts. Foreign nationals are generally not accepted as founders of a DAO-registered NGO. Foreigners who wish to support the work usually do so through an INGO agreement with the SWC, through donor funding, or through a non-profit company where approval permits.

What Documents Are Required?

Prepare the following for the DAO of the district where your office will be located:

Application in the prescribed format, signed by all founding members.
Two copies of the proposed constitution, signed on every page.
Citizenship certificate copies of all founding members.
Recent passport-size photographs of the founders.
Minute of the founders’ meeting deciding to form the organisation and approving the constitution.
Recommendation letter from the concerned Ward Office.
Proof of office address, such as a rent agreement or ownership document.
Police report or character verification, where the district requires it.

What Must the Constitution Contain?

The constitution is the heart of the file. It should state the name, address, objectives, membership categories, membership fees, general assembly powers, executive committee composition and tenure, election method, quorum rules, financial procedures, auditing arrangements, amendment procedure and dissolution clause. A weak or copied constitution is the leading reason for correction orders from the DAO.

How Long Does Registration Take and What Does It Cost?

Most districts complete verification and issue the certificate within one to three weeks if the file is complete and the recommendation letters are in order. Government fees are modest and are fixed district by district; you should also budget for notarisation, translation and printing. Because fee schedules change, CompanyNP verifies the current rates with the concerned DAO before filing.

What Comes Immediately After the Certificate?

Apply for a Permanent Account Number at the Inland Revenue Office.
Open a bank account in the organisation’s name using the certificate, PAN, constitution and committee decision.
Apply for SWC affiliation if you plan to run social welfare programmes or receive any foreign assistance.
Register with the local Municipality or Rural Municipality where required for coordination of local programmes.

How Can Foreigners and INGOs Work Legally Through the Social Welfare Council?

Foreign organisations cannot simply open an NGO in Nepal. The lawful path runs through the Social Welfare Council.

What Is a General Agreement?

A General Agreement is the framework contract between the SWC and an INGO. It permits the INGO to establish a presence and work in agreed sectors and districts for an agreed period, commonly up to five years, renewable. Typical supporting documents listed by the SWC include:

Registration certificate and constitution of the organisation in its home country.
Board resolution deciding to work in Nepal and authorising a representative.
Audited financial statements and annual reports of recent years.
Profile of the organisation, its sectors and its funding sources.
Proposed programme, budget, duration and working districts.
Letter of commitment to follow Nepali law and to coordinate with the concerned ministry and local government.

What Is a Project Agreement?

After the General Agreement, each programme needs a Project Agreement. This tri-party or bi-party document sets the budget, activities, districts, local partner and monitoring arrangements. Under the Social Welfare Act, projects run with foreign assistance require SWC approval, and the Council monitors implementation and receives progress and audit reports.

Can a Foreigner Set Up a Non-Profit Company Instead?

A foreign national or foreign entity may be considered as a promoter of a company incorporated under Section 166, but the Registrar will look for the prior approval of the concerned ministry, and the promoters must accept the no-distribution conditions. This route is chosen mainly by educational, research, health and cultural institutions. If your real objective is commercial, the correct route is foreign direct investment approval instead, and CompanyNP explains that separately in its guide to company registration in Nepal.

How Do Visas Work for Foreign Non-Profit Staff?

Foreign staff of an INGO working under a valid SWC agreement may apply for a non-tourist visa through the recommendation of the SWC and the concerned ministry, with the final decision by the Department of Immigration under the Immigration Act and Rules. Volunteers, consultants and short-term experts follow the visa category matching their actual role. CompanyNP can assist with the supporting file, as described on its visa and work permit services page.

What Are the Post-Registration Requirements?

Registration is the beginning, not the end. Nepali law places continuing duties on every non-profit.

What Are the Annual Compliance Duties?

Renewal at the DAO for every fiscal year, ordinarily within three months of the end of the fiscal year, with late fees for delay and possible cancellation for long non-renewal.
Annual general meeting, approval of accounts and election of the executive committee as per the constitution.
Audit by a licensed auditor and submission of the audit report to the DAO, the SWC where affiliated, and the local government.
Income tax return filing with the Inland Revenue Department, even where the organisation enjoys exemption, and monthly withholding tax returns for salaries and service payments.
Progress and financial reports to the SWC for approved projects.

How Does Tax Exemption Work?

The Income Tax Act, 2058 treats a qualifying social, religious, educational or charitable body as an exempt organisation once the Inland Revenue Department grants that status. Exemption applies to the organisation’s qualifying receipts, such as donations and grants. It does not remove the duty to deduct and deposit tax at source, to file returns, or to pay tax on unrelated business income. Verify the current procedure and forms at ird.gov.np.

What Mistakes Delay Approval Most Often?

Objectives written too broadly, or objectives that overlap with regulated sectors without ministry approval.
Missing ward recommendation or an unclear office address.
Receiving foreign funds into the bank account before the SWC project approval is obtained.
Name similar to an existing organisation in the same district.
Ignoring renewal for two or more years, which makes revival slow and costly.

Where Should You Verify Every Requirement?

Rely on primary sources: the full text of the Associations Registration Act, the Social Welfare Act and the Companies Act on the Nepal Law Commission portal at lawcommission.gov.np, the affiliation and agreement guidelines on swc.org.np, and the company forms on ocr.gov.np. CompanyNP cross-checks every file against these official sources before submission, and you can review its full range of registration and compliance services online.

Frequently Asked Questions

Can a foreigner become a founding member of an NGO registered at the District Administration Office?

In practice, no. District Administration Offices require Nepali citizens as founding members. Foreign organisations and individuals should instead pursue a General Agreement with the Social Welfare Council or consider a non-profit company with ministry approval.

How long does a Social Welfare Council General Agreement remain valid?

General Agreements are commonly granted for a fixed term, frequently up to five years, and may be renewed on application. Each individual programme still requires a separate project agreement setting out budget, districts, duration and reporting obligations.

Does a non-profit organisation in Nepal need to pay income tax?

An organisation approved as a tax-exempt organisation by the Inland Revenue Department is exempt on qualifying receipts. It must still obtain a PAN, file annual returns, deduct tax at source on payments, and pay tax on unrelated commercial income.

What happens if an NGO fails to renew at the District Administration Office?

Late renewal attracts fines fixed by the district office, and prolonged failure can lead to the association being treated as inactive or its registration being cancelled. Reviving a lapsed organisation requires meeting minutes, audits and payment of arrears.

Is Social Welfare Council affiliation compulsory for every registered NGO?

Affiliation is mandatory in practice for organisations working in social welfare sectors or receiving any foreign assistance, because Council approval is required for foreign-funded projects. Purely self-funded local associations may operate with district registration alone.

What is the main difference between an NGO and a non-profit company in Nepal?

An NGO is member-based, registered at the District Administration Office, and renewed annually. A non-profit company is registered at the Office of the Company Registrar under Section 166, governed by directors, and files company annual returns instead.