What It Costs to Set Up and Operate in Nepal

The cost base

Setting up in Nepal is cheap. Operating there is where the money goes. The recurring lines are more predictable than most entrants expect, because two of the largest, payroll floors and electricity, are set administratively and published.

This page states figures only where a source was obtained. Several lines that a full business case needs are not stated at all, and the section at the end says which and why.

Formation costs and timelines

A private limited company requires minimum authorised capital of NPR 100,000, and the Office of the Company Registrar charges a registration revenue fee of NPR 1,000 at that level. Registration fees rise with authorised capital on a published schedule that could not be obtained for this page, so the NPR 1,000 figure should be treated as a floor rather than a quotation.

The number that dominates a foreign entrant’s formation budget is not a fee at all. It is the NPR 20 million minimum investment each foreign investor must commit under the notice of 14 November 2022, waived only for information technology investments made through the automatic route. That capital is deployed into the business rather than paid away. It still has to exist, and it has to arrive through the banking system to be recorded.

Where a foreign-invested industry has fixed assets above NPR 100 million it registers with the Department of Industry as a medium or large industry under the Industrial Enterprises Act 2076.

The Department of Industry publishes target processing times through its One Stop Service Centre, opened on 15 May 2019 at Tripureshwor in Kathmandu and staffed by units drawn from fourteen government organisations, including an immigration visa unit, an Inland Revenue unit, a Nepal Rastra Bank foreign exchange unit and a land facilitation unit.

Step	Body	Published target
Foreign investment approval (new, share purchase, technology transfer, lease)	Department of Industry	7 days
Company incorporation	Office of the Company Registrar	7 days
Industry registration	Department of Industry	5 days
PAN and VAT registration	Inland Revenue Office	3 days
Bank account opening	Commercial bank	1 day
Foreign exchange approval	Nepal Rastra Bank unit	15 minutes
Business or working visa recommendation	Immigration unit	2 days
Brief environmental study	Environmental authority	15 days
Initial environmental examination	Environmental authority	2 months
Environmental impact assessment	Environmental authority	6 months
Repatriation recommendation	Department of Industry	15 days

These are stated targets from a departmental publication, not measured outcomes. The sequence matters more than any individual figure. The environmental line is what determines a project schedule. A project requiring a full environmental impact assessment carries a six-month clearance target before anything else can proceed, longer than every other step on the list combined.

Payroll and social security

Minimum remuneration was set at NPR 19,550 a month by a Ministry of Labour, Employment and Social Security notice issued under section 106 of the Labour Act 2074, gazetted on 21 July 2025 and effective from 17 July 2025. The daily rate is NPR 754, the hourly rate NPR 101, and part-time work is NPR 107 an hour. Tea plantations sit outside the revision.

That monthly figure breaks into NPR 12,170 of basic remuneration and NPR 7,370 of dearness allowance. The split is the part employers miss. Social security contributions under the Social Security Scheme Operating Procedure 2075 are calculated on basic remuneration, not on total pay. The employer deducts 11% from the employee and adds 20% of basic, a combined 31%. That is allocated 1% to medical, health and maternity protection, 1.40% to accident and disability protection, 0.27% to dependent family protection and 28.33% to old age protection.

At the statutory floor, that arithmetic produces the following per employee per month:

Line	NPR
Basic remuneration	12,170
Dearness allowance	7,370
Gross minimum remuneration	19,550
Employer social security contribution (20% of basic)	2,434
Employer monthly cost	21,984
Employee contribution deducted (11% of basic)	1,338.70

How a salary is divided between basic pay and allowances therefore changes the employer’s social security bill without changing the employee’s gross. Structures that load allowances cut contributions and, with them, the employee’s retirement accrual. This is a live issue in Nepali employment practice, not a theoretical one.

Electricity

Nepal Electricity Authority industrial tariffs are published by voltage level, with a demand charge on contracted capacity and an energy charge on consumption.

Category	Demand charge	Energy charge
Industrial, 230/400V	NPR 60 per kVA per month	NPR 7.80 per kWh
Industrial, 11kV	NPR 255 per kVA per month	NPR 8.60 per kWh
Industrial, 33kV	NPR 255 per kVA per month	NPR 8.40 per kWh
Commercial, low voltage	—	NPR 11.20 per kWh
Non-commercial, low voltage	—	NPR 12.00 per kWh

Time-of-day tariffs apply from mid-November to mid-March, the dry season when hydropower output falls. At 33kV the peak rate between 17:00 and 23:00 is NPR 10.20 per kWh, the overnight rate between 23:00 and 05:00 is NPR 5.25, and the daytime rate is NPR 8.40. At 11kV the equivalents are NPR 10.50, NPR 5.40 and NPR 8.55. A process that can be shifted overnight in winter runs at roughly half the peak rate. That is a genuine design variable for anything with thermal storage or batch scheduling.

As an illustration on those published rates, a plant connected at 11kV with 100 kVA of contracted demand consuming 30,000 kWh in a month pays NPR 25,500 in demand charge and NPR 258,000 in energy charge, NPR 283,500 in total before taxes and levies. Substituting a reader’s own load profile is the point of the table; the illustration is not a quotation.

The tariff document relied on here carries no effective date. Tariff is now set by the Electricity Regulatory Commission under the Electricity Regulatory Commission Act 2074, and a later order may supersede these figures.

Tax and compliance charges

Corporate income tax rates for FY 2083/84 (2026/27) are not stated here. The Inland Revenue Department publishes an entity rate notice dated 22 Shrawan 2083, and the Finance Act 2083 that fixes those rates was gazetted on 30 Ashar 2083. Neither document’s text could be extracted for this page. A rate taken from memory or from an aggregator site is the single most likely place for an error to survive undetected in a document of this kind, so the rate is omitted rather than guessed.

What can be reported is the direction of the FY 2083/84 budget, presented on 29 May 2026. Nepali press reporting of the budget describes the personal income tax exemption threshold doubling to NPR 1 million a year, a ten percentage point cut to the top marginal personal rate, a reduction in customs duty bands from eleven to seven, excise duty abolished on 360 categories of goods, and duty reductions on 273 categories of industrial raw materials. Those are reported measures rather than verified statutory text, and a business case should confirm each against the Finance Act before relying on it.

Annual compliance carries its own charges. Late filing at the Company Registrar costs NPR 1,000 for companies with paid-up capital between NPR 100,000 and NPR 2.5 million, NPR 2,000 between NPR 2.5 million and NPR 10 million, and NPR 5,000 above NPR 10 million, each for the first three months overdue, with further bands beyond that.

Costs that cannot be sourced

Four cost categories are material to a Nepal business case and are published in no form this page can cite: commercial rent in Kathmandu and the Terai industrial corridor; land acquisition, where foreign ownership restrictions change the structure as well as the price; inbound and outbound freight, which depends on corridor and season; and the cost of delay, usually the largest variance item in a Nepali project budget.

Anyone building a model should treat those as ranges obtained from named local counterparties with a date attached, and should carry the environmental clearance timeline as a schedule risk rather than a cost line.

Sources

1. Company registration process and fees — frequently asked questions

   Office of the Company Registrar · Accessed 2026 · Tier 2 — Official publication

   Supports: Minimum authorised capital of NPR 100,000 and a registration revenue fee of NPR 1,000; the tiered late-filing penalties of NPR 1,000, NPR 2,000 and NPR 5,000 by paid-up capital band for the first three months overdue.

   Accessed 26 August 2026

2. Foreign Investment in Nepal 2024

   Department of Industry, Ministry of Industry, Commerce and Supplies · 2024 · Tier 2 — Official publication

   Supports: The NPR 20 million minimum foreign investment; the One Stop Service Centre established 15 May 2019 with units from 14 government organisations; the NPR 100 million fixed-asset threshold for Department of Industry registration of medium and large industries; and the published target timelines for approval, incorporation, registration, tax registration, environmental clearance and repatriation.

   Accessed 26 August 2026

3. P&A Legal News — Minimum Remuneration Notice 2082 (2025)

   Pradhan & Associates · 22 July 2025 · Tier 6 — Professional or news source

   Supports: That the Ministry of Labour, Employment and Social Security issued a minimum remuneration notice under section 106 of the Labour Act 2074, published in the Nepal Gazette on 21 July 2025 and effective 17 July 2025, setting NPR 19,550 monthly (NPR 12,170 basic plus NPR 7,370 dearness allowance), NPR 754 daily, NPR 101 hourly and NPR 107 for part-time hourly work, with tea plantations excluded.

   Accessed 26 August 2026

4. सामाजिक सुरक्षा योजना संचालन कार्यविधि, २०७५ (Social Security Scheme Operating Procedure, 2075, third amendment)

   Social Security Fund · 2075 BS, as amended · Tier 1 — Primary legal instrument

   Supports: Contribution of 31% of basic remuneration — 11% deducted from the employee and 20% added by the employer — allocated 1% to medical, health and maternity protection, 1.40% to accident and disability protection, 0.27% to dependent family protection and 28.33% to old age protection.

   Accessed 26 August 2026

5. Consumer Tariff Rates

   Nepal Electricity Authority · Undated on the document; accessed 2026 · Tier 2 — Official publication

   Supports: Industrial energy charges of NPR 7.80/kWh at 230/400V, NPR 8.60/kWh at 11kV and NPR 8.40/kWh at 33kV; demand charges of NPR 60/kVA/month at low voltage and NPR 255/kVA/month at 11kV and 33kV; time-of-day rates for mid-November to mid-March; and commercial and non-commercial low-voltage rates of NPR 11.20 and NPR 12.00 per kWh.

   Accessed 26 August 2026

6. आ.व.२०८३।०८४ लागि निकायको लागि आयकरको दर (Income tax rates for entities, FY 2083/84)

   Inland Revenue Department · 22 Shrawan 2083 · Tier 2 — Official publication

   Supports: That the Inland Revenue Department publishes the entity income tax rate schedule for FY 2083/84 at this location. The rates themselves could not be extracted and are not stated on this page.

   Accessed 26 August 2026

7. आर्थिक ऐन, २०८३ (Finance Act, 2083)

   Inland Revenue Department / Government of Nepal · Published in the Nepal Gazette 30 Ashar 2083 · Tier 1 — Primary legal instrument

   Supports: That the annual Finance Act sets tax rates for FY 2083/84 and was gazetted on 30 Ashar 2083.

   Accessed 26 August 2026

8. Everything You Need to Know About Nepal's Budget for FY 2026/27

   Nepalnews · 2026 · Tier 6 — Professional or news source

   Supports: Reported budget measures for FY 2083/84: personal income tax exemption threshold doubled to NPR 1 million, top marginal personal rate cut by 10 percentage points, customs duty bands reduced from eleven to seven, excise abolished on 360 categories of goods and duties reduced on 273 categories of industrial raw materials.

   Accessed 26 August 2026

9. आर्थिक वर्ष २०८३/८४ को बजेट वक्तव्य (Budget Speech, FY 2083/84)

   Ministry of Finance · Presented 29 May 2026 · Tier 1 — Primary legal instrument

   Supports: The budget statement in which the FY 2083/84 tax measures were announced.

   Accessed 26 August 2026