Nepal - Hybrid (Common law and Hindu law)
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Nepal taxes

If you want to start a business in Nepal, this article explains the tax laws for a LLC, which is the most common company type in Nepal.

Nepal's resident companies are liable to tax on their worldwide income. The usual tax rate for offshore income, from our research, and these things do change, is 25%. The country may not have exemptions to bring in foreign earned profits. Corporate Income Tax standard rate is 25%. Income from certain activities may be taxed at different rates, as manufacturing (20%) or financial, petroleum and tobacco (30%). Nepal ranks 103rd when compared to corporate tax rate worldwide.

The valued added tax rate is 13.00%, that ranks Nepal as 73rd overall in terms of value added tax rate worldwide. The overall complexity of the tax system is medium. This is measured by average time to comply with a country's labor tax requirements is as it is 84hours. Contributing to this is the number of yearly labor tax payments, which is 11 in NP.

Thin capitalization mandates are enacted. Thin capitalisation refers to any sort of requirements on given company with respect todebt-to-asset ratios. Distribution of dividends by a resident company is taxed on source at a withholding tax of 5%, which is a final tax. Dividends received from a foreign entity may be subject to corporate income tax. Dividends are distributions of earnings of the business, decided by the board, to shareholders. Dividends can be issued as shares of stock, cash payments, or other property. Capital Gains are included in corporate income tax base. A capital gains tax is levied on the profits that a corporation or natural person realizes when he or she sells sells a capital asset for a price that is higher than the purchase price.

Dividends paid to non-resident companies are subject to a withholding tax of 5%. Payments on royalties and interests to non residents are subject to a withholding tax rate of 15%.

There is no known tax on wealth in Nepal. There are real property and inheritance taxes in Nepal. There are popular and well known research and development tax relief in this country.

The above is not tax or legal advice for your specific situation. We can to refer you to a lawyer in Nepal who can answer all your questions. Ready to get started? Click incorporate now if you are in a hurry, or press the free consultation button above.

It takes approximately 120 hours to file and prepare documents for a Nepal Hybrid (Common law and Hindu law).
The corporate tax is approximately 25% which is 103 in the world.

Owners of a company in Nepal are allowed to carry back a loss and may be allowed to carry forward a loss for 7 years.

The vat rate in Nepal is 13% which ranks 72 in the world.

Patent box
RND credit
Wealth tax
Estate tax
Transfer taxes
Asset taxes
Capital duties
8Tax treaties
25%Offshore Tax
25%Corp rate
N/ALoss carryback years
120Corporate time
13%VAT rate
25%Capital gains
NoAEOI planned

Read this to learn about incorporating a company in

We can help you form a company in Nepal. Click the button above for a no-obligation quote. We will provide you with all the necessary documents to open a bank account as well as a registered office in Nepal, which is required by law.

Nepal Tax Treaties

CountryTypeDate signed
South Korea
DTC 2001-10-05
DTC 1996-05-13
DTC 2001-05-14
DTC 2000-12-15
DTC 2001-01-25
DTC 2007-10-15
DTC 2011-11-27
DTC 1999-08-03

Country Info

National Flag of
नेपाल संघीय लोकतान्त्रिक गणतन्त्र (nep)
Area Code
Southern Asia
Native Languages