How long does it take to obtain a contractor licence in Nepal?

The process typically takes three to six weeks after company incorporation, provided all documents are complete and no additional site inspections are required by the Department of Industry.

Do foreign investors need a local partner to get a contractor licence?

Under the Foreign Investment and Technology Transfer Act, a foreign investor may hold up to 49 % of the share capital without a local partner; exceeding this limit requires approval from the Investment Board Nepal.

Which government body issues the contractor licence?

The Department of Industry (DoI) issues contractor licences after reviewing the industry registration and compliance documents.

Can an existing construction company apply for a licence without re‑incorporating?

Yes. An existing company can apply by updating its objectives in the memorandum of association and obtaining a new Industry Registration Certificate from the DoI.

What tax registrations are required before applying for the licence?

A PAN (Permanent Account Number) from the Inland Revenue Department and VAT registration are mandatory; they enable the company to remit taxes on construction services and imported materials.

What happens if the licence application is rejected?

The DoI provides a written reason; the applicant can correct the deficiencies, submit a revised application, or appeal the decision before the appropriate administrative tribunal.

Are there specific safety standards that must be met?

The Labour Act 2074 mandates compliance with occupational safety and health standards; the DoI may also request a safety audit report as part of the licence assessment.

Is it possible to expedite the licence process?

Expedited processing is not formally available, but submitting a complete, correctly notarised dossier and responding promptly to any clarification notices can significantly reduce delays.

Contractor License Nepal – Construction Contractor Licensing

TL;DR:
A contractor licence in Nepal is the government‑issued authority that permits a firm to legally execute construction works. Our lawyers conduct the full due‑diligence, prepare and file all required documents, and liaise with the Department of Industry and Labour to secure the licence efficiently.

Construction and contractor licensing in Nepal is a statutory permission issued by the Department of Industry that authorises a company or individual to undertake building projects, both public and private, after satisfying corporate, safety and labour requirements set out in the Company Act 2063, Labour Act 2074 and related regulations.

What does construction and contractor licensing cover in Nepal?

The licence allows the holder to bid for and execute construction contracts, import construction materials, and employ workers under Nepali labour law. It is contingent on an approved industry registration, compliance with occupational safety standards, and proper tax registration with the Inland Revenue Department (IRD).

When is a contractor licence required in Nepal?

New construction firms that have not yet obtained an industry registration.
Existing companies expanding into building works without a current licence.
Foreign investors whose shareholding exceeds the 49 % cap and need formal approval from the Investment Board Nepal.

How to obtain a contractor licence in Nepal

Pre‑registration due diligence – Verify land titles, shareholder structure and foreign equity limits.
Company incorporation – Submit the Memorandum and Articles of Association to the Office of Company Registrar (OCR); obtain a tax identification number from the IRD.
Industry registration – File the incorporation documents, project description and safety plan with the Department of Industry (DoI) to receive an Industry Registration Certificate.
Labour compliance filing – Register with the Department of Labour (DoLOS) and provide occupational safety policies required by the Labour Act 2074.
Licence application – Attach the industry certificate, labour registration proof and technical specifications to the DoI licence form.
Tax and customs clearance – Secure VAT registration and settle import duties with the Department of Customs.
Final issuance and post‑licence compliance – Receive the contractor licence and maintain periodic reporting to DoI and DoLOS.

[INTERNAL LINK: company registration in Nepal → /corporate/company-registration]

How our lawyers streamline the licensing process

We audit land titles, corporate structures and foreign investment ratios to pre‑empt regulator objections. Our team drafts incorporation and industry registration documents that meet OCR notarisation standards, and we arrange Nepali translations where required. During DoI review, we respond to clarification notices and coordinate any additional engineering reports within statutory deadlines. If the Labour Department raises safety‑policy issues, we prepare amendments and represent you before the Labour Court.

Cost and expected timeline for obtaining a contractor licence

Legal fees depend on corporate complexity, number of foreign shareholders and completeness of documentation. Typical expenses cover incorporation filing, industry registration preparation and licence‑application drafting.

Timeline: 6–12 weeks from due‑diligence to licence issuance, assuming no extra site inspections.
Common delays:
Missing Nepali notarisation (10‑day delay).
Additional engineering report requested by DoI (up to 4 weeks).
IRD postponement of PAN/VAT due to incomplete tax forms.

We provide a transparent estimate after the initial review.

Typical pitfalls that delay contractor licence approval

Incorrect company objective: Listing “general trading” instead of “construction” leads to DoI rejection.
Incomplete labour filings: Omitted safety policies trigger DoLOS objections and fines.
Exceeding foreign‑investment caps: Over 49 % foreign equity requires Investment Board Nepal approval.
Late tax registration: Without a PAN/VAT number, the IRD may block the licence application.
Failure to update OCR: Shareholding changes must be filed within thirty days; otherwise the licence can be deemed invalid.

Deliverables you receive after we secure your contractor licence

Fully incorporated company with OCR registration certificate.
Industry Registration Certificate from the Department of Industry.
Labour registration confirmation and safety‑policy documentation.
Completed contractor licence application and all annexures.
Final contractor licence certificate and a compliance checklist for ongoing reporting obligations.

Construction & Contractor Licensing