Establishing a subsidiary is the first step to run your company legally and internationally as this entity allows you to hire employees and manage payroll. You can take the time to establish a subsidiary yourself, or you can work with Globalization Partners through our subsidiary outsourcing services. Partnering with us gives you access to our subsidiary, so you can avoid the initial incorporation process. We hire your employees, assign them to you, and help you manage your payroll for greater peace of mind.
How to Set Up a Subsidiary in Nepal
Before establishing your subsidiary, you’ll want to consider details such as your location, relationship to resources, and the people you’ll be in contact with. The capital city, Kathmandu, and other urban hubs present excellent business opportunities in the service industry, while agriculture plays a role in every part of the country.
With Nepal’s borders with India and China, a large majority of trade happens between the countries, and you should consider them as sources for your subsidiary’s resources. It’s also helpful to recognize that Nepali is the most spoken language, followed by Maithili and Bhojpuri.
When it comes to the legal side of setting up a subsidiary, you have to work through a series of steps to ensure your company is properly established. This process generally takes seven to 10 days, and you have to establish your subsidiary within 30 days of setting up your company in-country. The steps include:
- Gaining approval from your company’s appropriate industry department.
- Registering your company name with the Office of Company Registrar.
- Registering with the Department of Industry (DOI).
- Establishing your company with the Inland Revenue Department (IRD) for taxation
You’ll also need a bank account to handle finances, and you should appoint board members and a managing director. Your board will be responsible for making decisions for the subsidiary. Make sure you’ve outlined rules and regulations and who has signing power for legal decisions.
Nepal’s Subsidiary Laws
You can operate as a public or private limited company, which each have their own set of regulations. Private limited companies are the most commonly registered business type. They can have no more than 101 shareholders and cannot sell shares to the public. Public companies must have at least seven shareholders and a minimum of NPR 10 million in paid-up capital. Public company shares can be sold to the public and listed on the stock exchange.
When you set up your subsidiary, you need a minimum NPR 50 million investment for incorporation. This investment must be approved by the DOI and the Nepal Rastra Bank.
Benefits of Having a Subsidiary
When you set up a subsidiary, you gain all legal rights to operate your company within the country. Your subsidiary will automatically be a limited liability company, which means your parent company will not be legally responsible for compliance issues on your subsidiary’s end. Your company in Nepal will essentially be a separate operation, and it can follow the appropriate business laws and culture.
You gain even more benefits by working with Globalization Partners. Our subsidiary outsourcing process eliminates the initial incorporation, which means you can focus on growing your company right away. We’ll hire your employees through our subsidiary and handle all the risks while you help your company flourish internationally.
What Do You Need for Incorporation?
The incorporation process requires an initial investment, so you need money set aside for legal establishment. Your subsidiary budget should also include money for a stay in the country for the initial setup or flights and travel from your home country. You’ll also need time and patience for the process since you’ll have to fill out various forms and wait for different offices to approve them.
Contact Us for Subsidiary Outsourcing
If you want to forgo the subsidiary establishment process, work with Globalization Partners. We’ll simplify the process and get you started on your business growth as soon as possible. Contact us today to learn more.