Register Branch Company in Nepal Easily – 3 Exclusive Details

Register Branch Company in Nepal | Set-up Branch Company in Nepal | Register Foreign Branch Company | Easy Foreign Branch Company Registration in Nepal – 3 Major Details

As per Section 154 (1) of the Nepalese Companies Act, 2006, no any foreign company can carry out its business transaction in Nepal without registration of its branch company in Nepal. Foreign branch company can only perform activities that are allowed in Nepal, similar to the objective of the foreign company.

Documents required to register branch company in Nepal:

  1. Application in the prescribed format.
  2. Permission obtained by the foreign company from the competent Nepalese authority to carry out its business in Nepal.
  3. Notarized copy of the charter, certificate of incorporation, Memorandum and Articles of Association; including the Nepalese translation of these documents.
  4. Certified copy of the Board resolution of foreign company to establish branch in Nepal.
  5. Power of Attorney.
  6. Notarized copy of passport of the directors of foreign company.
  7. Passport or citizenship copy of local representative in Nepal.

Information required to be furnished at the time of application:

  1. Full name, address of the registered office and principal place of the business, date of incorporation, description of the paid up capital and major objectives of the foreign company.
  2. Name, address of directors, manage, company secretaries or main officers of the company and description of their citizenship.
  3. Name and address of the person residing in the Nepal, who is authorized by the foreign company to receive, on its behalf, any summons, notice, etc., issued in Nepal.
  4. Full address of the branch company in Nepal.
  5. Where the company is to carry on any transaction or business in the state of Nepal, details of the proposed investment and transaction.
  6. Commencement date of transaction by branch company in Nepal.
  7. A declaration made by a director of the company or his/her representative, on the behalf of the company, that the matters contained in the returns submitted by the foreign company are true and correct.

Process of registration:

  1. Agreement/approval to carry out business in Nepal – Foreign company willing to register a branch company in Nepal must have an agreement with a government entity or authority to get involve in certain projects. Having an agreement with the Nepal Government makes it easier for branch company to repatriate income and profits to the main company.
  2. Application to the OCR – After gathering all the documents, application is filed at the Office of the Company Registrar. Firstly, application and required documents are submitted online via OCR online portal and afterwards a physical submission of documents is required.
  3. Investigation by the OCR – OCR checks the documents, and approves the foreign company to set-up branch company in Nepal.
  4. Certificate of registration within 30 days after the evaluation of the documents – OCR issues a registration certificate if the registration is approved.
  5. If can’t be registered, then information within 30 days – If in case the branch cannot be registered, OCR must notify the applicant with the reasons within 30 days of the submission of application.

Branch company registration revenue: Government revenue depends upon the capital of the foreign company. The more the Authorized capital, the more shall be the government fees. In the table below, tentative government fee for the given capital slab is indicated.

Foreign company having capital Fee in USD (approximately)
Up to USD 84,000.00 $125.00
Up to USD 800,000.00 $340.00
Up to USD 1.6 million $585.00
Up to USD 2.5 million $835.00
Up to USD 3.3 million $1085.00
If investment is not shown or no capital $835.00

For more information on branch company registration please contact us via email at info@lawchintan.com. Branch company is popular among the Indian citizens doing business in Nepal. Branch company is regulated by the Companies Act, therefore, it must follow statutory compliance and obligations set out by the Act.

Looking for setting up a new company in Nepal instead? Learn more about Foreign Direct Investment in Nepal.

Foreign Direct Investment in Nepal / Registration of Company by Foreigners in Nepal

Want to learn more about branch company? Get in touch with us, today!

Contact Us

 

Insolvency Laws in Nepal – Exclusive 4 Mins Read

Insolvency Laws in Nepal – Exclusive 4 Mins Read

Insolvency Laws in Nepal

WHAT IS INSOLVENCY?

  • Insolvency is the state of being unable to pay the money owed to a Creditor by a person or company.
  • The person or company who are in the state of insolvency are referred as insolvent.
  • As per the Insolvency Act, 2006 ‘Being Insolvent’ is a state of being unable, or appearing to be unable, to pay any or all of the debts due and payable to or payable in the future to creditors or a situation where the amount of liabilities of a company exceeds the value of the assets.

INSOLVENCY, LIQUIDATION AND BANKRUPTCY

Insolvency

Liquidation 

Bankruptcy

It is the financial state of a person (Individual or Corporate body) in which they are unable to repay debt owed to their creditors, in time, or at all. It is the legal ending of the company. The assets are discharged and are sold to repay the creditors and the business is closed and its name is removed from the Company Registrar’s Office. It is the legal declaration and final way out in Insolvency.

It is the legal process that happens when debtor declares when they can no longer pay debts off to creditor.

WHO CAN FILE APPLICATION FOR INSOLVENCY? (Insolvency laws in Nepal)

  1. A company itself that has become insolvent.
  2. Ten percent of the total creditors who has lent money to a company.
  3. Shareholders who have subscribed at least five percent of the total shares.
  4. Debenture holder who have subscribed at least five percent of the total debentures.
  5. A liquidator who is appointed to liquidate a company.
  6. In the case of a company carrying on any specific type of business, like Bank and Financial Institution, Insurance company has to obtain prior approval of its regulatory authority.

IMPORTANCE OF INSOLVENCY LAW IN THE POST COVID-19 NEPALESE ECONOMY

  • It provides the insolvent sometime to repay the debt.
  • It also provides the creditors a way to get back their money from the insolvent debtors.
  • It also allows debtors to obtain a fresh start by relieving them from their debt [Bankruptcy]

WHEN CAN A COMPANY CLAIM TO BE INSOLVENT?

  • If the General Meeting of shareholders adopts special resolution or a meeting of the Board of Directors decides that the company has become insolvent.
  • If there is a court order to repay debt within 35 days and if the debt is not paid off within that time.
  • If a company fails to pay the debt within 35 days after receiving the notice the creditor or if the debtor does not file application to dismiss the notice in the court.
  • If it is proved that the liability of the company exceeds the value of its assets or the company itself admits that it has become insolvent.

DOCUMENTS / EVIDENCES REQUIRED TO FILE APPLICATION

  • In case company itself files for Insolvency:
  1. Document certified by the Board of Directors declaring that the company has become insolvent.
  2. A special resolution adopted by the Board of Directors of the company to initiate the insolvency proceedings.
  3. Certified copies of the Balance-sheet and Auditor’s report of the company available at the time of filing application for insolvency proceedings.
  • In case the creditor of the company files for Insolvency:
  1. A statement of the Principal and Interest of the debt, which the creditor claims to be due and payable by the company.
  2. The date on which the company borrowed the debt claimed by the creditor stating the reason to take on the debt.
  3. Detail of the due amount and stating that that amount is payable immediately.
  4. Reason or ground on which creditor believes that the company has become insolvent.
  • When the liquidator makes the application:
  1. Evidence proving that a person is appointed as the liquidator by a company for the purpose of Insolvency proceedings.
  2. Opinion of the liquidator regarding the insolvency of a company filing application.
  • In case of shareholders and debenture-holders filing Insolvency application, an approval of the court to initiate the process is required and the conditions mentioned in the court approval letter must be complied.

INFORMATION REQUIRED TO FILE APPLICATION (Insolvency Laws in Nepal)

  • Name and address of the company
  • Reason to file
  • Financial standing
  • Document evidencing the company being insolvent
  • Other supporting documents
  • Name of the Applicants
  • Signature & Date

OUTCOME OF INSOLVENCY PROCEEDING

Depending upon the report submitted by the Liquidator, resolution adopted by the Creditor’s Assembly and the restructuring plan submitted by the company, the court gives following order within 7 days of the adopted resolution:

  • To immediately liquidate the company.
  • To implement the restructuring the program of the company.
  • To wait for some time & see if there’s probability for the progress of the company.
  • To extend the period of insolvency proceedings to get further report.
  • To dismiss the Insolvency proceeding.

For more information on Insolvency laws in Nepal and Bankruptcy law, please email us at info@lawchintan.com.

Or simply fill out the contact us form by clicking the link below and we will contact you.

Contact Us

Patent Filing in Nepal – Exclusive 3 Mins Read

Patent Filing in Nepal – Exclusive 3 Mins Read

Patent Filing in Nepal | Filing a Patent application in Nepal

Patents are registered and regulated under the Patent, Design and Trademark Act, 2022 (1965) (“the Act”) in Nepal. The Act came in effect since 1965 and has seen very few updates and/or amendments ever since. Nepal also became one of the parties to the ‘Paris Convention for the Protection of Industrial Property, 1883 (“the Convention”) on June 22, 2001 and since then it is a member of the International Union for the Protection of Industrial Property, which is founded under the Convention.

As per Section 9 of the Nepal Treaty Act, 2047 (1990), any treaty ratified by Nepal Government upon its accession shall be applicable as good as law and has further provided that the Articles of the Treaty or Convention to which Nepal is a party and has ratified shall prevail even if such Articles are inconsistent with the laws of Nepal. It is also important to note that Nepal is not a member of Patent Cooperation Treaty, 1970.

The Act defines Patent as ‘any new idea or method relating to the design, operation or transmission any substance or group of substance, or any useful invention developed by some new principle or formula.

In Nepal, Patent Filing in Nepal can be done as either ‘Ordinary Application’ or ‘Conventional Application’. The former is considered as an unique Patent application being filed for the first time in Nepal, whereas the later is an application usually filed elsewhere (usually the member states of the Convention) and filed within 12 months from the date of initial application with an intent to create a “priority claim” in Nepal for the purposes of examining Novelty.

As per Section 3 of the Act, any person desirous to acquire right over any Patent has to register such Patent in their name. Procedures regarding filing of the Patent application is mentioned in Section 4 of the Act. The applicant has to submit the Application Form as prescribed under Annex 1 (A) along with the following documents at the IP Section of the Department of Industry (“DOI”).

  • Full name, address and profession of the inventor
  • Details of invention, operation & usage of Patent
  • Technical specifications, formulas or principles 
  • Designs, drawings of the invention along with details
  • Power of Attorney is application is being made by an intermediary on the behalf of inventor
  • Copy of the receipt of Patent registration in home country (for conventional applications)
  • Application fee of NPR 2,000 (approx. USD 18) for each Patent

After the application is duly registered, the DOI then inspects the Patent, tests for novelty and usage for the general public. If approved, the applicant receives a registration certificate.

Conditions in which Patent Filing in Nepal can’t be done:

  • If such Patent is already registered in a different person’s name
  • If the applicant is not the real inventor of Patent nor has acquired rights over such Patent
  • If the Patent is likely to adversely affect public health, conduct, morality or the national interest
  • If the Patent is against the prevailing laws 

Once registered, the DOI publishes such Patents in Nepal Gazette for the knowledge of general public (except for the Patents required to be kept secret for national interest). A registered Patent remains valid for 7 years. Patent owner can file for renewal within 35 days from the date of expiry of registration. An owner can renew Patent application for two tenures –  7 years duration for each tenure.  The renewal fee, for the first tenure is NPR 5,000 (approx. USD 44) per year (NPR 35,000 in total for the renewal of first 7 years).

Likewise, the  renewal fee for the second tenure is NPR 52,500 at the rate of NPR 7,500 per year. If in case the application for Patent renewal is not filed within 35 days after the expiry of registration date, an owner can still file for renewal within 6 months after the expiry of 35 days period by paying a fine of NPR 1,000. Failure to renew by 6 months time by paying fine shall ipso facto result in the cancellation of Patent registration.

If you want to learn more about Patent Filing in Nepal, feel free to contact us at info@lawchintan.com or call us at +977 9866556697.

www.lawchintan.com/contact-us