Are you looking to start your trading business in Nepal but need to learn the legal registration procedures? A trading business can be registered as a company, sole proprietor, or partnership firm. If you are willing to register your trading business as a company, then you can read this blog "Company Registration Process in Nepal" for more information.

In Nepal, sole proprietorships are referred to as private firms. A sole Proprietorship is a business owned and operated by a single individual. If you want to register your trading business (Private firm) in Nepal and seek guidance with the registration procedure. In that case, this blog will provide a comprehensive guide through the registration process. Before diving into registration, it is essential to understand the concept of trading business, the type of trading business, and governing laws for the registration of trading business.

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What is Trading Business?

Trading Business refers to buying and selling of goods to make a profit. For Example, ABC Private Firm purchases electronic gadgets and resells them to individuals or businesses. Then, it is referred to as a trading business.

It can be in various forms, they are Business to Business (B to B), Business to Customer (B to C), and Direct to Consumer (D to C).

Business to Business (B2B)

Refers to the type of business transaction that takes place between one business and another. For Example, Wholesalers sell products in bulk to retailers.

Business to Customer (B2C)

Refers to the business selling products or services directly to the individual as the end customer. For Example, ABC Retail Store sells goods to the customer.

Direct to Consumer (D2C)

Refers to the business where manufacturers or producers sell their products directly to the consumer. For Example, XYZ Clothing manufacturing company sells their product directly to the customers.

Type of Trading Business

Import/ Export Trading Business

Involves buying goods from the foreign market (Importing) and selling them domestically, or vice versa (Exporting). For Example, ACD Private Firm imports electronic devices and distributes them within the Nepalese market for sale.

Local Trading Business

Purchasing and selling products domestically. For example, XYZ, a Private Firm, purchases goods manufactured in Nepal and distributes them within the Nepalese market.

Categories of trading business

Distributor (वितरक)

The distributor buys products from the manufacturer or producer and resells them to wholesalers, retailers, or the end customer. They act as intermediaries between the producer, wholesaler, retailers, or the end customer.

Wholesaler (थोक)

Wholesalers buy goods in bulk from producers or distributors and sell them to the retailer or the end customer.

Retailer (खुद्रा)

The retailer purchases goods from a wholesaler and sells them to customers. They may be operated in various formats such as physical stores, and online shops.

Also read: A Comprehensive Guide to Securing Startup Funding in Nepal

Governing Authority

Register Business related to import, export or Import/ export

Department of Commerce, Supply and Consumer Protection (वाणिज्य, आपूर्ति तथा उपभोक्ता संरक्षण विभाग) (Babarmahal, Kathmandu) for Bagmati and Gandaki Province.
Office of Commerce, Supply and Consumer Protection (वाणिज्य आपूर्ति तथा उपभोक्ता संरक्षण कार्यालय) (Biratnagar) for Koshi Province.
Office of Commerce, Supply and Consumer Protection (वाणिज्य आपूर्ति तथा उपभोक्ता संरक्षण कार्यालय) (Birgunj) for Madhesh Pradesh
Office of Commerce, Supply and Consumer Protection (वाणिज्य आपूर्ति तथा उपभोक्ता संरक्षण कार्यालय) (Bhairahawa and Nepalgunj)for Lumbini Province
Office of Commerce, Supply and Consumer Protection (वाणिज्य आपूर्ति तथा उपभोक्ता संरक्षण कार्यालय) (Nepalgunj) for Karnali Province
Office of Commerce, Supply and Consumer Protection (वाणिज्य आपूर्ति तथा उपभोक्ता संरक्षण कार्यालय) (Dhangadi) for Sudurpaschim province

Local Trading

Small and Cottage Industries in the concerned district: Register local trading businesses.

The name of the office may vary depending on the province. In Bagmati province, it is named as उद्योग तथा वाणिज्य कार्यलाय।

Local government: If the capital is less than 5 lakhs for local Trading Business. It depends upon the provisional law.

Governing Law

Private Firm Registration Act, 2014 B.S.
Private Firm Registration Regulation, 2034 B.S.
Provisional Law (For Local Trading Business)

Capital Requirement

The minimum capital requirement for registering the Import and Export trading business (Private Firm) is Rs. 10 Lakhs. However, capital requirements for registering the trading business depend upon the nature of the business. To learn more about the capital requirements, please view the file.

Capital Requirement

View

Also read: Franchise Agreement: 15 Essentials You Need to Know

Step to register the Trading (Private Firm) in Nepal

Step 1: Create Account

You must create an account before filling out or uploading the document. Visit this link: https://online.doc.gov.np/onlineuser/Login to register your user’s name. You will view the following page:

Make Sure you use the phone number you are using. Once you use one phone number you cannot use the same number next time to create another account. Once you fill in the details, a 4-digit code will be sent to your number.

Step 2: Fill the detail

Once you register your user’s name, you will see the following page:

Make sure you choose a private firm. You need to fill in the details about your private firm and upload the document. The list of documents required to upload are:

Citizenship
Signature photograph taken on a white sheet
Approval Certificates (for pharmaceuticals, security, financial related business)
Rent Agreement
Copy of Land Ownership Certificate
Self-Declaration Letter (स्वघोषणा पत्र)
Bank Statement (If capital is more than 10 Lakh)
Proof of Payment made through the bank

Also read: Buying a Franchise vs. Independent Business

Step 3: Fill the application

The first step is filling out the application form on the Department of Commerce, Supply and Consumer Protection website. Visit this link: https://doc.gov.np/Downloads to download the form. Details you need to fill in the form are:

Name of the Firm
Address of the Firm
Capital
Objective
Name of the Proprietor
Witness (Name, Address, Citizenship Number, District)

Step 4: Submission of Physical Copy of Document at Concern Department/ Office

After you complete the online form and upload all documents, you will receive the message. Screenshot the message, print it, and visit the Department of Commerce, Supply and Consumer Protection or the concerned office designated by the government. Along with the application, you need to pay Rs. 100 as an application fee. The following document should be submitted:

Application From
Citizenship
Photo’s
Recommendation Letter from the concerned authority
Self-Declaration Letter (स्वघोषणा पत्र)
Bank Statement (स्रोत पुष्टि हुने कागजात) (If capital is more than 10 Lakh)
Proof of Payment made through the bank
Recommendation/ Approval according to Law

Step 5: Examination of Submitted Documents

After submitting the documents, the Department/ office will examine them. If everything is in order, the registration will be approved, and the Department will issue a certificate of incorporation. If the Register detects an error in the document, the Department will direct you to rectify or amend the mistake. After the correction is made, the department will issue a registration certificate.

Step 6: Pay Registration Fee

After submitting the document, you need to pay the registration fee along with the application fee of Rs. 100. Registration fees vary according to the capital of your private firm.

The fee required to register for an Import and Export Trading Business registration are:

Capital (NRP)	Fee (NRP)
Up to 10 lakhs	1000
10 Lakh to 50 Lakh	5,000
50 Lakh to 1 crore	10,000
1 Crore to 10 Crore	50,000
Above 10 Crore	75, 000

Women, Dalit community members, and those from underprivileged backgrounds are eligible for a 50% discount on the registration fee when registering a firm.

Registration fees for local trading depend on the provisional law of the particular province.

After the payment, the concerned department officer will issue a registration certificate.

Step 7: Register of Business in Ward

Once you obtain the incorporation certificate, you must register the company at the local level, typically at the ward office. The documents required for the Registration are:

Registration Form- Available at the ward office
Rent Agreement
Citizenship Land Owner
Copies of Land-Owning Certificate
Property Tax paid Receipt
Passport- Size photographs
Copies of land-owning certificate.
Photo
Copies of citizenship of proprietor and house owner
Certificate of Registration
Any additional documents or forms as required by the ward office or regulatory authorities

Step 8: Register on PAN

The next step is to register the firm with tax authorities. You must apply through the IRD website. You can visit this link: (https://ird.gov.np/) to visit the IRD website. After you fill out the online application, you need to visit the IRD office you have chosen. The documents required for the PAN Registration Process in Nepal are:

PAN Application Form
Copies of Citizenship
Rent Agreement
Business Seal
Business Registration Certificate at the local level.

Sample Document regarding Registering Trading Business

घर, जग्गा भाडा सम्झौता	View
स्वघोषणा फाराम	View
प्राईभेट फर्म रजिस्टेसन गर्ने दर्खास्त फाराम	View
प्राइभेट फर्म खारेजीको निवेदन	View

Frequently Asked Question

Is the trading business a sole proprietorship?

In Nepal, trading businesses can be registered under various legal forms, including proprietorship, partnership, or company. The choice of business structure depends on your preference.

If you own and operate the trading business by yourself then it is a sole proprietorship.

Is the proprietor required to be physically present during the registration of the Private Firm?

Yes, the physical presence of the proprietor is necessary during the registration process.

What are the documents required for the renewal to Trading Business (Private firm)?

Required Documents are:

Application
Original firm registration certificate
Tax Clearance Certificate
Audit Report (If capital is more than 50 Lakh)
You need to upload all these documents online in

What is the renewal fee of a Trading Business (Private Firm)?

The renewal fees vary according to capital and time of Duration. The fee structure for renewing import, export trading business are:

Capital (RS)	Renewal fee up to 1 Months (RS)	Renewal fee up to 3 Months	Renewal fee up to 1 year
Up to 10 Lakh	100	200	300
10 Lakh to 50 Lakh	500	100	1500
50 Lakh to 1 crore	1000	2000	3000
1 Crore to 10 Crore	5000	10,000	15,000
Above 10 Crore	7,500	15,000	22,500

Renew Fees for trading businesses (Private firms) registered in Cottage and Small Industries, or the Local government, depend upon the laws of the related provincial government.

Can I Change the objective of my trading business (Private firm)?

Yes, you can change your objective of the firm by paying the prescribed fee in the concerned department.

Can a registered sole trading business (private firm) be terminated?

Yes, you can terminate your trading business (private Firm) by giving an application and paying the required fees in the concerned department.

What's the duration for registering a sole trading business in Nepal?

The duration for registering a Sole Trading Business in Nepal depends on factors like document completeness and office workload. Typically, it can take around five days.

Can private firm ownership be changed from one person to another?

According to the law, Private firms related to trading business can be changed from one person to another. However, the Department of Commerce, Supply and Consumer Protection states that ownership of private firms cannot be changed.

Disclaimer: The information provided here is for informational purposes only and should not be considered as legal advice. Please consult with a qualified legal expert for professional legal opinions. You can also consult with our professionals for further assistance.

Also read: Advantage of Buying Registered Business in Nepal

How to register a Trading Business (Private Firm) in Nepal?

FAQs

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