A foreign company that wants a presence in Nepal before it invests opens a liaison office, called a representative office or contact office: a point of contact that coordinates on the parent's behalf and cannot earn income. Each foreign company liaison office in Nepal registers with the Office of the Company Registrar under Companies Act 2063 Section 154. Business Registration Nepal handles liaison office registration in Nepal through our FDI & foreign company registration service and company registration in Nepal work, covering activities, process, documents, fee and compliance.
What Is a Liaison (Representative) Office in Nepal?
A foreign company testing the Nepal market uses a liaison office as its point of contact, with no separate legal personality of its own. For contact office registration, Nepal law treats a representative office, a contact office and a liaison office as one entity under three names, each serving as a contact point for the head office.
It is not an investment vehicle. The representative office Nepal's OCR registers exists only to facilitate contact, and it spends money the parent company sends while earning nothing in Nepal.
What Can and Cannot a Liaison Office Do in Nepal?
The prohibition on income-generating activities is the defining rule, and the permitted and prohibited activities fall into 5 items:
- Permitted: maintain liaison and act as the parent's point of contact
- Permitted: help local clients use the parent's products/services without taking remuneration
- Permitted: coordinate with the parent's agent, and do market research
- Prohibited: any income-generating or commercial activity
- Prohibited: signing transaction contracts, and marketing/advertising the parent's products
A liaison office may conduct market research and assist local clients, but it must not undertake any sale. We restrict the office's written scope to the permitted items so the OCR sees no commercial role.
Which Law and Authority Govern Liaison Office Registration?
Companies Act 2063 Section 154 and the Companies Directives govern liaison office registration, and the OCR is the registering authority. A liaison office usually needs no approval or recommendation from a government authority, unlike a branch, though the OCR may ask for one in a regulated sector.
Because the office is not an investment vehicle, the FDI approval, DOI and NRB steps of an investment do not apply. Section 154, Companies Act 2063, still binds the office to annual filing with the OCR.
What Is the Liaison Office Registration Process?
The liaison office process in Nepal runs in 4 steps, with no investment approval:
- Submit the application and parent-company documents to OCR
- OCR verifies the file and issues the registration certificate
- Register at the local ward office
- Complete PAN/tax registration at the Inland Revenue Office and open a bank account
We submit the file through the authorized representative the parent appoints. The bank account opened in step 4 receives the parent's remittances for running costs.
What Documents Are Required for Liaison Office Registration?
Liaison office documents in Nepal come mostly from the parent company, and each foreign paper needs a notarized translation into Nepali. The OCR file holds 8 items:
0 of 8 ready
We check the documents against the current OCR checklist before filing.
Is There a Minimum Capital or Government Fee for a Liaison Office?
No, there is no minimum capital for a liaison office, since it is not an investment vehicle. The OCR government fee for a liaison office in Nepal is NPR 50,000.
We confirm the fee for the current fiscal year before filing, and we quote our own fee in a free consultation.
How Long Does Liaison Office Registration Take?
Liaison office registration takes about 2 to 3 weeks when the documents are complete. The OCR is required to register a complete application, or give its reasons, within 30 days. We check notarization and translation before filing, since the OCR returns an incomplete file.
What Are the Post-Registration Compliances for a Liaison Office?
Post-registration compliance applies to a liaison office even though it earns no income. It must appoint an auditor, file annual financial statements with the OCR, and submit certified statements on salaries, tax deductions (TDS) and operating expenses.
We maintain those filings through our annual compliance & filings service so the office can comply on time.
What Is the Difference Between a Liaison Office and a Branch Office?
The difference between branch and liaison office covers 5 points:
| Point | Liaison office | Branch office |
|---|---|---|
| Legal personality | None; part of the foreign parent | None; part of the foreign parent |
| Can it earn income | No; point of contact only | Yes, within the approved scope |
| Approval route | OCR registration under Section 154; government approval usually not required, though the OCR may ask for one in a regulated sector | Competent authority approval, then OCR under Section 154 |
| Minimum capital | None | Generally none |
| Typical use | Market research and coordination | Carrying on the parent's business in Nepal |
Liaison office vs branch office in Nepal comes down to income: a branch can earn income within its scope, and a liaison office cannot. When the parent is ready to trade, we handle branch office registration or a separate company through subsidiary company registration.
Frequently Asked Questions
Does a liaison office still need a PAN and must it file returns?
Yes, a liaison office registers for a PAN and files with the tax office even though it earns no income in Nepal. It deducts tax at source on the salaries and payments it makes, and within three months of the fiscal year end it submits statements, certified by a Nepali auditor, of those payments and the tax deducted.
How is a liaison office funded and can it open a bank account?
A liaison office is funded by inward remittance from the parent and runs a Nepali bank account for its costs, set up as in opening a company bank account. It does not earn local income.
How long is a liaison-office registration valid and how is it renewed?
A liaison office registration stays in force while the office keeps up its annual filings and reports any change in its details to the OCR, which is the registering authority. We confirm any renewal step with the OCR before each fiscal year's filings.
Can a liaison office be converted into a branch or subsidiary?
No, a liaison office is not usually upgraded. An investor that wants to trade registers a branch or a subsidiary instead, so we plan the structure to match the activity.
Can a liaison office sign contracts on the parent's behalf?
No, a liaison office cannot sign commercial contracts on the parent's behalf. It is limited to coordination and representation, and it does not raise invoices in Nepal.
What can trigger cancellation of a liaison office's registration?
Income-earning activity beyond the permitted scope, or a failure to report, triggers cancellation of a liaison office's registration. A foreign company can also apply to the OCR to cancel the registration once it stops operating in Nepal and has no outstanding liabilities there. We keep the scope and filings in line so an unplanned cancellation does not happen.