Beneficial Ownership, Related-Party Rules and Corporate Disclosure
Nepal now collects beneficial ownership at a 15% threshold, but the data sits in three unconnected places and none of them is a public register.
What the register records
Everything the Companies Act 2063 (2006) requires about ownership concerns the person whose name is on the share. The company keeps a register of shareholders and debenture-holders, records information as to title and the shareholder’s address, maintains an index, treats substantial shareholders separately, files a return of shares after each allotment, and lays annual accounts before the Registrar.
Not one of those provisions asks who stands behind the registered holder. A Nepali company owned through a nominee, a trust or an offshore holding structure discloses at the Registrar exactly what a directly held company discloses: a name and an address.
Closing that gap has occupied the last three years of Nepali regulation. It has been closed in a way that produces three separate records rather than one.
What the assessors found
Nepal’s mutual evaluation, conducted under the Asia/Pacific Group on Money Laundering and adopted in September 2023, rated the country Partially Compliant on Recommendation 24, which covers transparency and beneficial ownership of legal persons, and Partially Compliant on Recommendation 25 for legal arrangements. The first follow-up report in June 2024 left Recommendation 24 where it was.
The specific findings name the defects rather than the score, which makes them worth restating. There was no publicly available information on how to obtain beneficial ownership information, and information about the creation of legal persons was not readily accessible. Basic information on associations was collected at registration; beneficial ownership was not, beyond details of members. Nepal had carried out no risk assessment of legal persons. Nothing prevented the misuse of nominee arrangements. And the assessors found major shortcomings in the dissuasiveness of the available sanctions.
Nepal was placed under FATF increased monitoring in February 2025 and remained there at the June 2026 statement.
The 2025 measures
The Registrar’s directive. On 2082.1.23, about 6 May 2025, the Office of the Company Registrar issued a direction in the name of all companies to collect and submit details of their beneficial owners. It is a directive of the registering authority rather than an amendment to the Companies Act, and it works through the Registrar’s administrative relationship with the companies on its file.
The Inland Revenue Department guidance. Separately, the Inland Revenue Department issued Guidance on Beneficial Ownership Regarding Prevention of Money Laundering and Terrorist Financing under section 7U(2) of the Asset (Money) Laundering Prevention Act 2064 (2008). Its title carries the year 2026 and its issuance page states 2025. The discrepancy is not resolved here.
The guidance is the operative statement of what Nepal now means by beneficial ownership.
- Definition. A natural person who, as the ultimate beneficiary or owner, directly or indirectly owns, controls, directs or influences a customer, transaction, asset, legal person or legal arrangement.
- Threshold. Fifteen percent or more of the shares or capital, invested individually, jointly or in a group, directly or indirectly.
- Cascade. First, natural persons with direct or indirect ownership or voting rights of 15% or more. Failing that, persons exercising effective control. Failing that, senior management or chief officials.
- Reporting. Details in the prescribed format, submitted within three months of registration or of a change in ownership.
- Retention. Records regularised, updated and maintained until five years from the date the person ceased to be a beneficial owner.
- Penalty. A fine of NPR 1 million to NPR 5 million for failure to provide or for falsifying details, with possible confiscation.
The threshold is the number to notice. Many jurisdictions default to 25% when implementing the FATF standard. Nepal has set 15%, and applied it to joint and grouped holdings as well as individual ones. On paper that is a stricter test than the international norm.
Three separate records
For anyone doing diligence on a Nepali company, ownership information sits in three places, and none of them can be inspected from outside.
| Record | Held by | Standard | Accessible to |
|---|---|---|---|
| Shareholder register and returns | The company and the Office of the Company Registrar | Legal ownership | Regulators; the company |
| Beneficial ownership declaration | The company and the Inland Revenue Department | 15% cascade | Regulators |
| Customer due diligence file | The company’s bank | The bank’s own AML policy | The bank and its supervisor |
There is no public beneficial ownership register. That is precisely the deficiency the assessors identified in 2023, and the 2025 arrangements do not cure it. A counterparty who wants to know who ultimately owns a Nepali company gets it from the company, under a contractual representation, and verifies it against whatever the company’s bank has been given. That is a weaker position than a register search, and it should be priced as one.
The second limitation is arithmetic. A 15% threshold with a control fallback catches ordinary structures. On its own it does not defeat a deliberately constructed chain of sub-15% holdings, and the assessors’ finding that Nepal has no mechanism against the misuse of nominee arrangements has not been shown to be addressed.
Related-party rules
Beneficial ownership disclosure and related-party control are frequently discussed together. They are governed by different provisions, with different purposes.
Directors must disclose their interests, and their dealings in the company’s securities. Loans to officers or shareholders are prohibited. Section 93 requires general meeting approval for a public company’s material transactions with directors and connected parties, treating as material anything exceeding the lower of NPR 100,000 or 5% of total assets, and catching employment arrangements of NPR 120,000 a year or more. Gains from a prohibited transaction are recoverable and losses compensable, subject to exceptions for wholly-owned subsidiary dealings and for arm’s-length market-rate transactions in the ordinary course.
Two observations follow. These are disclosure and approval rules aimed at abuse of position by an insider rather than at concealment of ownership, so a beneficial owner who holds no office is largely outside them. And the thresholds have not been indexed since 2006. In any company of scale the operative figure is NPR 100,000, low enough that the exception does the work the rule was meant to do.
The draft Companies Act
The draft Companies Act released for public consultation in 2026 would move beneficial ownership from directive into statute. It proposes mandatory disclosure by individuals holding share certificates, company penalties of NPR 500,000 to NPR 5 million, and fines of NPR 1 million to NPR 3 million together with one to three years’ imprisonment for responsible officers who provide false information. The criminal limb is the significant change. It converts a false ownership declaration from an administrative default into a personal offence.
It remains a draft. Until it passes, Nepal’s beneficial ownership regime rests on a departmental guidance document, a registrar’s directive and a rule numbered 35A, and the country’s rating on Recommendation 24 has not moved since 2023.
Sources
-
Inland Revenue Department, Ministry of Finance, Government of Nepal · Title carries 2026; issuance page states 2025 · Tier 2 — Official publication
Supports: The definition of beneficial owner, the 15% threshold, the three-step cascade, the three-month submission window, the five-year record retention rule, the NPR 1 million to NPR 5 million penalty range, and the issuance under section 7U(2) of the Asset (Money) Laundering Prevention Act 2064.
Accessed 26 August 2026
-
वास्तविक धनी (बेनेफिशरी) को विवरण संकलन गर्न सवै कम्पनीहरुका नाममा कम्पनी रजिष्ट्रारको निर्देशन
Office of the Company Registrar · 2082.1.23 (about 6 May 2025) · Tier 1 — Primary legal instrument
Supports: That the Registrar directed all companies to compile and submit beneficial owner details, and the date of that direction.
Accessed 26 August 2026
-
Mutual Evaluation of Nepal — 1st Follow-Up Report
Asia/Pacific Group on Money Laundering · June 2024; original mutual evaluation report adopted September 2023 · Tier 3 — Multilateral institution
Supports: The Partially Compliant ratings on Recommendations 24 and 25 in the 2023 mutual evaluation, that R.24 remained Partially Compliant after the follow-up, and the identified deficiencies: no public access to beneficial ownership information, beneficial ownership not collected at registration, no legal person risk assessment, no mechanism against misuse of nominee arrangements, and shortcomings in the dissuasiveness of sanctions.
Accessed 26 August 2026
-
Anti-money laundering and counter-terrorist financing measures — Nepal, Mutual Evaluation Report
Asia/Pacific Group on Money Laundering · Adopted September 2023 · Tier 3 — Multilateral institution
Supports: The underlying mutual evaluation assessment of Nepal's beneficial ownership framework.
Accessed 26 August 2026
-
Government of Nepal (English translation) · In force, as amended · Tier 6 — Professional or news source
Supports: The shareholder register, information on title to shares, the index of shareholders, substantial shareholders, the material transaction thresholds for dealings with directors, and the prohibition on loans to officers or shareholders.
Accessed 26 August 2026
-
Everything Businesses Need to Know About Nepal's New Company Act Draft
Nepalnews · 2026 · Tier 6 — Professional or news source
Supports: The draft Companies Act proposals on mandatory beneficial ownership disclosure, company penalties of NPR 500,000 to NPR 5 million, and fines of NPR 1 million to NPR 3 million with one to three years' imprisonment for responsible officers giving false information.
Accessed 26 August 2026
Related guides and next steps