How to Register an IT or Software Company in Nepal

Published August 13, 2026.

Here's the direct answer up front: there's no separate registration track for IT or software companies in Nepal. You go through the same Office of the Company Registrar (OCR) process, via CAMIS, as any other Private Limited company — or Ward and PAN registration if you're a solo freelancer operating as a Sole Proprietorship. What's genuinely different for a tech business isn't the process itself, it's three decisions that founders in this specific sector tend to get wrong by copying a generic template: which entity type actually fits a small tech team, how to word the business-objective clause in your founding documents so it matches what you actually do, and how VAT applies to a software business specifically — which, notably, isn't the standard threshold-based rule most other businesses follow. This guide walks through all three, plus the standard registration steps themselves.

What's in this guide

• Choosing the right entity for a small tech team
• The business-objective clause: get this specific
• VAT treatment for software and IT businesses
• The registration process, step by step
• Documents checklist
• Realistic timeline
• Costs to expect
• Practical registration-office guidance
• Common mistakes specific to IT/software filings
• Frequently asked questions

Choosing the right entity for a small tech team

The underlying entity options in Nepal don't change because your business is software rather than retail or services — you're still choosing primarily between Sole Proprietorship and Private Limited, the same decision any founder makes. What differs is how the factors behind that decision tend to line up for a typical small tech team.

A solo developer or freelance consultant with a handful of individual clients, minimal contractual risk, and no near-term plan to hire can reasonably start as a Sole Proprietorship — it's faster to register, through your local Ward office and PAN rather than a full OCR filing, and carries a meaningfully lighter ongoing compliance load. But the moment any of the following applies, a Private Limited structure is usually the better foundation: you're a team of two or more co-founders splitting ownership, you're signing client contracts with meaningful liability exposure (data handling, service-level commitments, indemnification clauses), you plan to hire employees, or you expect to raise outside investment at any point. Software and services businesses commonly carry exactly this kind of contractual exposure — a data breach clause or an uptime guarantee in a client contract is a real liability, and a Sole Proprietorship offers no separation between that liability and your personal assets.

A Private Limited company can have between 1 and 101 shareholders, which comfortably covers the vast majority of small tech teams and early co-founder groups without needing to consider a Public Limited structure. If you're still weighing the two structures generally, our Sole Proprietorship vs Private Limited comparison covers the liability, tax, and compliance tradeoffs in full detail — the logic there applies to a tech business exactly as it does to any other.

One tech-specific wrinkle worth flagging early: if you already know you'll be billing foreign clients — a common pattern for software teams doing outsourced development or building a SaaS product with an international customer base — that doesn't change which entity type you should choose, but it does make the VAT section below relevant from day one rather than something to revisit later.

The business-objective clause: get this specific

Every Private Limited company's Memorandum of Association (MOA) and Articles of Association (AOA) need to state the company's business objectives — and this is where generic templates cause real problems for tech founders specifically. A software company's actual work often spans several distinct activities: custom software development, IT consulting or staff augmentation, a SaaS product sold on subscription, outsourced development services for foreign clients, or some mix of these. A vague objectives clause — something like "IT services" with no further detail — or one copied from an unrelated template is a common cause of OCR queries, since inconsistencies between stated objectives and the rest of the application draw scrutiny rather than speeding the filing through.

Beyond avoiding a query at registration, there's a practical reason to get this right: your MOA's objectives clause is effectively the boundary of what your registered company is understood to do. If you invoice for an activity your MOA doesn't clearly cover — say, you registered as a software development company and later start selling a hardware product line, or begin operating a training academy alongside your development work — that's the kind of mismatch that can create friction later, whether in a bank's due diligence, a tender application, or simply your own tax filings. The fix isn't complicated: describe your actual planned activities specifically and broadly enough to cover where you realistically expect the business to go in the near term, rather than narrowly describing only what you're doing on day one.

In practice, a reasonably drafted objectives clause for a small software company might cover software development and IT consulting services together, or explicitly separate a SaaS product line from custom development work, depending on how distinct those revenue streams actually are. There's no universal template that fits every tech business — which is exactly why a generic, copy-pasted MOA is one of the more common sources of avoidable delay for this category of filing. See our documents-required guide for the complete OCR checklist and the specific errors that most often trigger a query.

VAT treatment for software and IT businesses

This is the single most important tech-specific fact in this entire guide, and it's easy to miss if you're used to thinking about VAT purely in terms of turnover thresholds: software companies are among the specific sectors required to register for VAT from their very first sale, regardless of turnover. The standard rule most businesses follow — VAT registration becomes mandatory once rolling 12-month turnover crosses NPR 50 lakh for goods or NPR 30 lakh for services — simply doesn't apply to you. If you're operating a software company, VAT registration belongs in your very first week of operations, alongside PAN, not something to revisit once revenue grows. See our full VAT registration threshold guide for the complete list of mandatory sectors and how the standard thresholds work for comparison.

Once registered, the standard VAT rate is a flat 13% on taxable supplies, which applies broadly across registered businesses — there's no separate, lower software-specific VAT rate published anywhere we could verify, so don't assume one exists without confirming directly with the IRD or a tax advisor. What we can say with confidence: your invoicing, from your very first sale, needs to correctly reflect your VAT-registered status, and your monthly VAT return — generally due by the 25th of the following month — needs to reconcile output VAT collected against input VAT paid on your own business purchases.

On billing foreign clients specifically: a meaningful share of small Nepali software businesses invoice clients outside Nepal, whether through outsourced development contracts or a SaaS product with international subscribers. Nepal's VAT framework does treat certain cross-border and export transactions differently from purely domestic sales, but we haven't been able to verify a specific, current, citable rate or export-of-service mechanism to state here with confidence — and this is exactly the kind of detail worth getting precisely right rather than approximately right, since it affects real invoices. If a meaningful share of your revenue comes from foreign clients, treat your export-billing VAT treatment as a specific question to raise directly with a tax advisor as part of registration, not an assumption to carry forward untested. Our tax advisory service can review your specific billing structure and confirm the correct treatment before you send your first foreign invoice.

What we deliberately aren't covering here: sector-specific tax holidays, export incentive percentages, or Software Technology Park-style benefits sometimes discussed in connection with Nepal's IT sector. We looked for a verifiable, current figure to cite and couldn't confirm one with confidence, so rather than repeat a number that might be outdated, generalized from a different context, or simply incorrect, we're flagging this as a question for a tax advisor rather than stating a specific incentive here. If such a scheme applies to your business, confirming eligibility directly with the Inland Revenue Department is the safer path than relying on secondhand figures.

The registration process, step by step

With entity choice, the objectives clause, and VAT timing settled, the mechanical steps are the standard Private Limited registration process — nothing about them is software-specific.

1. Reserve your company name with OCR, in English and Nepali, with two or three backup options in case your first choice is already taken.
2. Draft your MOA and AOA, with the objectives clause specifically describing your actual planned software/IT activities as covered above — not a generic template borrowed from an unrelated filing.
3. Gather shareholder and director documentation — citizenship certificates or passports, passport-size photos, and National ID numbers for everyone involved.
4. Submit through CAMIS, OCR's online portal, uploading the application, MOA, AOA, and supporting documents together.
5. Wait for OCR examination — typically 5 to 15 working days on a clean filing with no inconsistencies to query.
6. Receive your certificate of incorporation — the company now legally exists as a separate entity.
7. Register for PAN with the Inland Revenue Department immediately afterward — mandatory before you can invoice, file, or open a business bank account.
8. Register for VAT in the same push, not later — since software companies are a mandatory-from-day-one VAT sector, this should happen alongside PAN rather than being deferred until revenue justifies it.

If you'd rather have someone handle the filing, the MOA drafting, and the VAT registration together as one coordinated process, our company registration service covers the full sequence end to end.

Documents checklist

Document	Notes
Citizenship certificate or passport	For every shareholder and director
Passport-size photos	For every shareholder and director
National ID numbers	For every shareholder and director
Proposed company name (English and Nepali)	With two or three backups
Registered office address details	Can be a home address if properly documented
Signed MOA and AOA	Objectives clause specific to your actual IT/software activities
Foreign investment documentation	Only if any shareholder is a foreign national

This is the same core document set every OCR applicant needs — see our complete documents-required guide for the full checklist, including what changes if you have foreign shareholders, which is common for tech startups with an overseas co-founder or early investor.

Realistic timeline

If you register as a Private Limited company, expect the same timeline as any standard filing: typically 5 to 15 working days for OCR examination on a clean application, followed by PAN and VAT registration afterward — VAT in the same push given the mandatory-sector rule above, not as a separate later step. A Sole Proprietorship route for a solo freelancer is considerably faster, typically a matter of days through Ward and PAN registration, though VAT registration still applies from the first sale if you're operating as a registered software business rather than casual freelance work. See our dedicated Sole Proprietorship registration walkthrough if that route fits your situation better than a full company filing.

Costs to expect

A standard Private Limited filing at a modest authorized capital tier — commonly around NPR 1,00,000 — typically totals NPR 15,000 to 25,000 in government fees, stamp duty, and notarization combined, before any professional service fee. None of this scales differently because your business is software rather than another sector; OCR's fee structure is tied to authorized capital, not business type. What's worth budgeting time (not necessarily money) for specifically is getting the MOA objectives clause right the first time — a query triggered by a vague or generic clause adds processing delay, and in some cases means redoing notarization on corrected paperwork, effectively paying part of that cost twice.

Practical registration-office guidance

As of 2026, OCR registration runs entirely through CAMIS, its online portal — there's no separate physical queue specific to tech companies, and no dedicated "IT desk" at OCR that handles software filings differently from any other Private Limited application. The practical guidance that actually matters for a tech founder is less about which office to visit and more about how to prepare before you submit: have your MOA/AOA objectives clause drafted with real specificity before you start the CAMIS submission, not as something to sort out mid-filing, since going back to revise a founding document after submission is slower than getting it right upfront. If any shareholder is a foreign national — common for startups with an overseas co-founder — build in extra time for the additional foreign investment documentation and Nepal Rastra Bank recording described in our foreign investment registration guide, since that's consistently the single biggest source of delay for startup filings with international ownership.

Once your OCR certificate is in hand, PAN and VAT registration both run through the Inland Revenue Department, and — separately from either — most software companies with a physical office also need Ward-level local registration, the same as any other business with a registered premises. It's easy to assume a software company "based in the cloud" doesn't need this, but Ward registration is tied to your registered office address, not to whether your product itself is physical — if you have a lease or an office address on file, plan for it.

Common mistakes specific to IT/software filings

• Registering VAT late, or not at all, because turnover looks too low to matter. Software companies are a mandatory-from-day-one VAT sector — the turnover threshold that applies to most businesses simply doesn't apply here, and this is the single most common tech-specific compliance gap we see.
• Using a generic or copy-pasted MOA objectives clause instead of one that specifically describes your actual software/IT activities — a common cause of OCR queries and a source of friction later if your invoicing doesn't clearly match your stated objectives.
• Assuming a specific tax incentive applies without confirming it directly with the IRD. Sector-specific incentive schemes are discussed in Nepal's broader IT policy conversation, but eligibility and figures aren't something to assume from secondhand sources — confirm before you build a financial plan around one.
• Choosing Sole Proprietorship purely for speed when the business already has real contractual liability exposure — client contracts with data-handling or service-level clauses are exactly the kind of exposure a Private Limited structure's liability protection is designed to address.
• Assuming a cloud-based or remote business doesn't need Ward registration. If you have a registered physical office address, Ward-level registration applies the same way it does for any other business type.
• Not confirming export/foreign-billing VAT treatment before invoicing foreign clients. If a meaningful share of revenue comes from outside Nepal, this is worth a direct conversation with a tax advisor rather than an assumption carried forward from a generic online source.

Frequently asked questions

Is there a special registration process for IT or software companies in Nepal?

No. There's no separate registration track for IT or software businesses — you go through the same OCR/CAMIS process as any other Private Limited company, or Ward and PAN registration if you're operating as a Sole Proprietorship. What differs is how you should approach entity choice, the MOA business-objective clause, and VAT, not the registration mechanics themselves.

Do software companies have to register for VAT even with low revenue?

Yes. Software companies are among the specific sectors required to register for VAT from their very first sale, regardless of turnover — the standard NPR 30 lakh services threshold that applies to most businesses doesn't apply here.

Should a freelance developer register as a Sole Proprietorship or a Private Limited company?

It depends on liability exposure and growth plans, not on being in tech specifically. A solo freelancer with minimal contractual risk can reasonably start as a Sole Proprietorship; a small team taking on client contracts, hiring staff, or planning to raise investment is usually better served starting as a Private Limited company rather than converting under pressure later.

What should the MOA business objective clause say for a software company?

It should describe your actual planned activities specifically — software development, IT consulting, SaaS products, outsourced development services, or whichever combination applies — rather than a generic template. A vague or mismatched objectives clause is a common cause of OCR queries and can also create friction later if you invoice for an activity your MOA doesn't clearly cover.

Are there special tax incentives for IT or software companies in Nepal?

We don't publish specific incentive figures here because we haven't been able to verify a current, citable rate — sector-specific incentive schemes do get discussed in Nepal's IT policy conversation from time to time, but the details and eligibility criteria change and are easy to misstate. Confirm directly with the Inland Revenue Department or a tax advisor before assuming any specific incentive applies to your business.

Does billing foreign clients change how a Nepali software company registers?

Registration itself doesn't change based on your client's location — you still register the same entity through the same OCR/PAN/VAT process. What can differ is how specific cross-border invoices are treated for VAT purposes, which is worth confirming directly with a tax advisor for your specific billing structure rather than assuming a blanket rule.

How many shareholders can a small software company have?

A Private Limited company can have between 1 and 101 shareholders, which comfortably covers the vast majority of small tech teams, co-founder groups, and early-stage startups without needing a Public Limited structure.

Do I need an office address to register a software company, or can I register from home?

OCR registration requires a registered office address, which can be a home address in many cases, provided you can document it — a lease agreement or ownership document. Many small software teams start this way before moving to a dedicated office once the business justifies it.

Bottom line

Registering an IT or software company in Nepal doesn't require learning a different process — it requires applying the standard OCR or Ward/PAN process carefully, with three sector-specific details in mind: choose the entity that matches your team's actual liability exposure and growth plans, write an MOA objectives clause that specifically describes what you do, and treat VAT registration as a day-one requirement rather than something tied to revenue. Get those three right, and the rest of the filing is procedural. If you'd rather have the entity choice, the MOA drafting, and the VAT registration handled together by people who do this regularly, our registration team can take the whole process from here.