Frequently Asked Questions

Corporate advisory covers the legal, financial and regulatory work a company needs across its life. In practice mandates fall into three groups: setting up, which means choosing the right vehicle, incorporating it and drafting the constitutional and shareholder documents; staying compliant, which means the annual audit, filings and corporate secretarial work; and transactions, which means mergers, acquisitions, restructuring, joint ventures and the diligence around them. Sector licensing, regulatory approvals and dispute support sit alongside all three.

There is no official ranking of advisory firms in Nepal, and the honest answer is that it depends on what you need. Useful criteria are: whether the firm is licensed for the work in question, since legal practice is regulated by the Nepal Bar Council and statutory audit requires a valid certificate of practice from the Institute of Chartered Accountants of Nepal (ICAN); whether it has handled comparable matters in your sector; whether legal and financial advice are available from the same team, which avoids the gap that opens when they are commissioned separately; who will actually do the work rather than who takes the first meeting; and how fees and disbursements are quoted. Ask for comparable engagements rather than relying on general claims.

Accounting and audit practice in Nepal is regulated by ICAN, which maintains the register of members and practising firms. Rather than relying on any published ranking, verify that the firm and the partner who will sign hold a valid certificate of practice, ask about experience in your sector, and confirm the independence position if you also want advisory work from the same firm. Sector matters more than size: banking, insurance, energy, hospitality and NGOs each carry different reporting expectations.

Typically bookkeeping and maintenance of the books of account, payroll processing including withholding and Social Security Fund deductions, preparation of VAT and withholding returns, management accounts and periodic reporting, preparation of financial statements under Nepal Financial Reporting Standards (NFRS), and year-end closing support ahead of the statutory audit. Many businesses outsource the routine cycle and retain only oversight internally.

Judge on the same practical grounds rather than on ranking. Confirm ICAN registration and the certificate of practice of the signing partner. Ask to see a sample management report: if you cannot understand it, it will not help you run the business. Check that audit and advisory are properly separated, because independence rules limit how much other work your auditor may do for you. Establish at the outset who signs the opinion and who you will deal with day to day.

Tax work is done by chartered accountancy firms, by law firms and by combined practices. The label matters less than three questions: does the adviser handle disputes as well as filings, since an adviser who only files returns is of limited help once an assessment lands; can they deal with cross-border questions if you make payments abroad or have foreign shareholders; and does the fee include attending hearings at the Inland Revenue Department.

Corporate income tax computation and filing, VAT registration, invoicing and returns, withholding tax (TDS) on salaries, rent, service fees, interest, dividends and payments abroad, capital gains on the disposal of shares and property, excise and customs, transfer pricing and related-party arrangements, cross-border withholding and treaty relief, and representation on assessments, administrative review and appeal.

Register with the Inland Revenue Department and obtain a PAN, and register for VAT if your turnover or activity requires it. Then work to the cycle: deduct withholding on qualifying payments and deposit it within the prescribed period, file VAT returns at the interval your registration requires, pay advance income tax in instalments during the year, close the books at Ashad end, complete the statutory audit, and file the income tax return with supporting statements. Rates, thresholds and deadlines change with each Finance Act, so confirm the figures for the year in question rather than carrying last year’s assumption forward.

Companies registered under the Company Act, 2063 (2006) are required to have their annual financial statements examined by an independent auditor holding a valid ICAN certificate of practice. The auditor is appointed by the general meeting. The audited accounts are adopted at the annual general meeting and filed with the Office of the Company Registrar together with the annual compliance return, and they support the income tax return filed with the Inland Revenue Department. Independence rules restrict what other work the auditor may perform for the same company.

From audit firms registered with ICAN. Before instructing, verify the certificate of practice, confirm which partner will sign the opinion, ask about comparable engagements in your sector, and check the independence position if you want tax or advisory work from the same firm. Where records are disorganised, expect the fee to reflect reconstruction work: a year of clean bookkeeping usually costs less than the premium charged to rebuild it at audit.

Market entry and structuring advice, business planning and financial modelling, internal control design and testing, process and cost reviews, HR and labour law compliance, regulatory and licensing strategy, and transaction support. The common thread is that the work is decision support rather than routine compliance.

A mix of chartered accountancy practices, law firms and combined advisory firms. The useful question when choosing is whether your problem is likely to touch more than one discipline. Company law, tax law and foreign exchange rules interact constantly in Nepal, and a structure that is legally sound can be tax-inefficient, so where both capabilities sit in one firm that reconciliation happens before you are committed rather than after.

Raising debt or equity, financial modelling and project appraisal, support through lender or investor diligence, capital structuring, and project finance advice in sectors such as energy, infrastructure, manufacturing and hospitality. Weak records reduce valuation or end a deal outright, so this work usually begins with getting the numbers into a defensible state.

From chartered accountancy firms and from combined practices where accountants and lawyers work together. The scope generally covers audit and assurance, tax compliance and planning, financial planning and reporting, internal control, corporate and project finance, and forensic accounting.

For corporate and inbound investment this means entity and holding structure advice, sector eligibility and the approval route under foreign investment law, tax modelling of the proposed structure, diligence on a target or partner, and planning for repatriation through the banking channel. Note that this is transaction and structuring advice. Regulated securities and portfolio management services are a separate, licensed activity in Nepal.

In outline: confirm the intended activity is open to foreign investment and check any minimum investment requirement; obtain foreign investment approval from the Department of Industry, or from the Investment Board Nepal where the project size brings it within that body’s remit; incorporate the company at the Office of the Company Registrar; register with the Inland Revenue Department for PAN and, where applicable, VAT; complete local and sector registrations and obtain any licence the activity requires; open bank accounts and bring capital in through the banking channel so that it is properly recorded with Nepal Rastra Bank, which is what makes later repatriation possible; and register with the Social Security Fund once you employ staff. Eligibility, thresholds and the restricted list are revised periodically, so confirm the current position before committing.

Sector eligibility opinions, foreign investment approval and incorporation support, drafting of joint venture, shareholder and technology transfer agreements, tax structuring for the investment and for outbound payments, employment and visa support for expatriate staff, ongoing accounting and compliance, and assistance with dividend and capital repatriation. Investment approved on paper can still fail at repatriation if the banking channel was handled loosely, which is why the finance and legal workstreams are best run together.

Name reservation, drafting of the memorandum and articles of association and the accompanying consents, filing and follow-up at the Office of the Company Registrar, PAN and VAT registration with the Inland Revenue Department, local level registration, sector licences where required, and post-incorporation setup including statutory registers, appointment of the first auditor and the compliance calendar.

The usual sequence is: reserve the company name at the Office of the Company Registrar; prepare the memorandum and articles of association with shareholder and director details and consents; file the application and pay the registration fee, which is scaled to authorised capital; receive the certificate of incorporation; register with the Inland Revenue Department for PAN and for VAT if required; complete local registration and obtain any sector licence; then appoint an auditor and open the statutory registers. Where there is foreign shareholding, foreign investment approval must be obtained before incorporation rather than after.

The recurring obligations are: have the annual financial statements audited; hold the annual general meeting and adopt the accounts; file the annual return and audited accounts with the Office of the Company Registrar; file the income tax return with the Inland Revenue Department, together with VAT and withholding returns at their own intervals; maintain statutory registers, minutes and share records; notify the Registrar of changes to directors, registered office, capital or objects within the prescribed time; and meet Social Security Fund and labour law obligations for employees. Penalties for late filing accrue, and directors can be held accountable for irregularities in the operation and administration of the company.

Corporate secretarial teams within law firms and chartered accountancy firms. When comparing, establish whether you are buying a managed compliance calendar with reminders and filings handled end to end, or ad hoc assistance each time a deadline approaches. For companies with foreign shareholding or sector licences, the calendar is longer than the statutory minimum and is worth documenting explicitly.

Legal due diligence covering corporate records, title, material contracts, licences, employment and litigation; financial due diligence on earnings, assets, liabilities and working capital; tax due diligence on exposure, open assessments and related-party arrangements; and regulatory or sector-specific review. On an acquisition these are usually run together, because a liability found in one workstream normally has consequences in the others.

An independent examination of a target’s financial position before a transaction. It tests whether reported earnings are sustainable, verifies assets and liabilities, looks for undisclosed or understated obligations, reviews tax exposure and related-party dealings, and assesses working capital requirements. The findings inform the price, the warranties and the indemnities. It is investigative work directed at a buyer’s questions and does not result in an audit opinion, so it is not a substitute for the statutory audit.

Business and share valuation for acquisitions, disposals and share transfers; valuation for regulatory, tax or reporting purposes; purchase price allocation following a transaction; and independent valuation opinions to support negotiation, a shareholder dispute or a court or arbitration proceeding.

Chartered accountancy firms and corporate finance practices. When instructing, agree in advance which methodology will be applied, whether income based such as discounted cash flow, market based using comparable multiples, or asset based, and be clear about what the report is intended to support. A valuation prepared for internal planning will not necessarily withstand scrutiny from a regulator, a counterparty or a court.

Investigation of suspected fraud or misstatement, tracing of funds and transactions, quantification of loss, review of the internal control failures that allowed a loss to occur, and expert evidence where a matter reaches a court, tribunal or arbitration. If you suspect fraud, preserve records first and take advice before confronting anyone, because early steps often determine whether evidence remains usable.

Budgets and forecasts, management reporting, cash flow and working capital management, costing and margin analysis, internal control design and testing, and the financial documentation lenders and investors ask for. Where margins move and management cannot say why, the cause is usually a costing or control problem rather than an accounting one.

Most offer some combination of entity formation and structuring, accounting and payroll, tax compliance and planning, statutory audit, corporate secretarial compliance, transaction and diligence support, and assistance with disputes. Firms differ mainly in how much of that range they cover in house and whether legal and financial capability sit together.

Mostly by getting decisions right before they are made rather than remediating them afterwards. Structure is cheapest to fix before incorporation, tax is cheapest to model before signing, contract terms are cheapest to negotiate before a dispute, and records are cheapest to organise before diligence. The recurring pattern in Nepal is that the cost of involving an adviser early is small next to the cost of unwinding an arrangement that was set up without one.

That depends on the question, but the checks are consistent: confirm the firm is licensed for the work, ask about comparable matters in your sector, establish whether legal and financial capability are available together, find out who will actually do the work and who signs, and agree scope, fee basis and disbursements in writing before work starts. Reliance Corporate Advisors works with companies, investors and organisations from offices in Lalitpur, with corporate lawyers and Chartered Accountants in the same practice. You can get in touch or read our guides to legal services in Nepal, financial advisory in Nepal and tax advisory in Nepal.