A sole proprietorship in Nepal is registered as a private firm (प्राइभेट फर्म) under the Private Firm Registration Act, 2014 BS. Trading and commerce firms register with the Department of Commerce, Supplies and Consumer Protection or its offices; after that you get a PAN from the Inland Revenue Department, register for VAT if required and pay your municipality's business tax.
Once your firm is registered, keep its accounts in KhataIN Business — or start with the free invoice generator.
What is a private firm in Nepal?
A private firm is a business owned by one person. The firm and the owner are legally the same: the owner keeps all the profit and is personally responsible for all the debts.
Two or more owners form a partnership firm, which has its own rules.
Where do you register a private firm?
The office depends on what the business does:
| Type of business | Where to ask |
|---|---|
| Trading, shops, import and export, commerce | Department of Commerce, Supplies and Consumer Protection or its office for your area |
| Manufacturing or cottage industry | The industry office that covers your area |
| Small local shops and services | Many municipalities register these through the ward office or municipality |
The Department of Commerce, Supplies and Consumer Protection runs an online service for firm registration, renewal and changes, and publishes a service checklist for private firms on its website. The split differs by business type and place, so ask your ward office or the department which office handles your business first.
What documents do you need?
Check the office's current checklist before you go. Commonly asked for:
- the registration application and an undertaking (कबुलियतनामा) on the office's form,
- a copy of the owner's Nepali citizenship certificate,
- recent passport-size photos,
- the proposed firm name, business objectives and capital,
- proof of the business address — such as a rental agreement or land ownership papers,
- a recommendation from the ward office, where the office asks for one.
Step by step
Fees change, so ask the office for the current amount.
Getting a PAN and registering for VAT
After registration, apply for a business PAN through the Inland Revenue Department's taxpayer portal and complete verification at the tax office for your area. See PAN in Nepal.
You must register for VAT once your turnover crosses the legal threshold, and some businesses must register regardless of turnover. Others can register voluntarily. Read VAT in Nepal and check the current threshold with the IRD.
What is municipality business tax?
Local governments in Nepal charge a business tax (व्यवसाय कर) on businesses in their area. The rates are set in each municipality's own annual finance act, so they differ from place to place. Ask your ward office or municipality how to register and when payment is due each year.
Do you need to renew a private firm?
Yes. A private firm must be renewed regularly, and the registering office can cancel a firm that is not renewed in time. Note the renewal date on your certificate and confirm the period and fee with the office.
Private firm or private limited company?
| Private firm | Private limited company | |
|---|---|---|
| Owners | One person | One or more shareholders |
| Registered with | Department of Commerce or the relevant office | Office of Company Registrar |
| Legal person | No — owner and firm are the same | Yes — separate from its owners |
| Owner's liability | Unlimited | Limited to share capital |
| Paperwork | Simpler | More: company records, audit, annual filings |
A company suits a business that will bring in investors or wants limited liability; a private firm suits a small owner-run business.
Frequently asked questions
Can I register a private firm online?
The Department of Commerce, Supplies and Consumer Protection offers an online service for firm registration, renewal and changes. You may still need to visit the office to verify documents.
Do I need a PAN after registering my firm?
Yes. A registered business needs a PAN from the Inland Revenue Department to file tax returns, issue proper bills and register for VAT. You apply after you have the firm registration certificate.
Sources
- Department of Commerce, Supplies and Consumer Protection, doc.gov.np — firm registration online service and private firm checklist.
- Office of Company Registrar, ocr.gov.np.
- Inland Revenue Department, ird.gov.np.
Last checked: 13 November 2026. Offices, documents and fees change — confirm with the registering office and your ward office before you apply.