How to Register an Industry in Nepal: Step-by-Step (DoI vs DCSI vs Provincial)

Since Nepal became a federal state under the 2015 Constitution (2072 Bikram Sambat), industry registration authority is split across three tiers. The first task in any udyog darta (industry registration) is to identify the correct office, because filing at the wrong one wastes weeks. The Industrial Enterprises Act, 2076 (2020 AD) and the federal structure together decide who does what.

The federal Department of Industry (DoI), under the Ministry of Industry, Commerce and Supplies, registers industries that are national in scope. These include any industry with foreign direct investment (FDI), industries relating to matters on Schedule 5 of the Constitution (such as atomic energy and uranium), industries that will operate across two or more provinces, and academic or consultancy services touching diplomatic affairs. Industries that need prior permission (those listed in Schedule 1 of the Act, like defence-related or hazardous units) also route through the DoI.

The Department of Cottage and Small Industries (DCSI) and its district-level Offices of Cottage and Small Industries (OCSI) register micro, cottage and small industries. This is the office most first-time Nepali entrepreneurs deal with, and it is where gharelu udyog (cottage industry) registration happens. Everything that is not reserved for the DoI and is not micro, cottage or small falls to the provincial government's ministry of industry. In practice, because several provinces are still finalising their own laws, the DoI has in transition handled some registrations that constitutionally belong to provinces.

Nepal classifies industries in two ways: by size (fixed capital) and by nature (what the industry does). Section 17 of the Industrial Enterprises Act, 2076 sets the size bands, and these bands determine both which office registers you and, indirectly, whether an environmental study is needed. Fixed capital means investment in fixed assets and excludes the value of the entrepreneur's own house and land.

A micro-industry has fixed capital not exceeding Rs 2 million (20 lakh), with the entrepreneur involved in management, a maximum of nine workers, annual turnover under Rs 10 million, and electrical load of 20 kilowatts or less. A cottage industry is labour-oriented and based on traditional skills, local raw materials, technology, art or culture, using electrical energy up to 50 kilowatts, and is listed in Schedule 2 of the Act. A small industry is any industry, other than micro and cottage, with fixed capital up to Rs 150 million (15 crore).

A medium industry has fixed capital above Rs 150 million but not exceeding Rs 500 million (50 crore), and a large industry has fixed capital above Rs 500 million. Separately, the Act groups industries by nature into categories such as energy, manufacturing, agriculture and forest-based, mineral, infrastructure, tourism, information-and-communication-technology and service industries, each set out in its own schedule. Correctly stating your classification on the application form is essential because it is copied onto your registration certificate.

The Department of Industry runs an online single-window system through its Industry Management Information System (IMIS) portal at imis.doind.gov.np. The goal is to let an applicant submit the application and scanned documents electronically, track status in real time, and reduce physical visits. For industries with foreign investment, the foreign-investment approval must be secured first, after which the industry is expected to be registered within the timeframe fixed by the department.

The practical flow is to create an account on the portal, fill in the online application with full details of the industry, upload the required documents, and pay the registration fee. Details entered include the full name and nature of the industry, its classification (micro, cottage, small, medium or large), proposed location, machinery, raw materials, any chemicals used, packaging, capacity, and the promoters' identity details. After online submission, applicants are typically asked to present the original documents to the concerned office within a short window for verification.

Once the office reviews the file for completeness and compliance, and conducts a site inspection where the nature of the industry requires it, the registration certificate (industry registration / udyog darta certificate) is issued. Because portals and forms are periodically updated, always download the current form and fee schedule from the official site rather than relying on older templates.

For micro, cottage and small units, registration is done at the Department of Cottage and Small Industries or at the district Office of Cottage and Small Industries covering the business location. The DCSI, established in 1974 (2031 Bikram Sambat), exists specifically to promote and register these smaller enterprises, and it too has moved much of its intake to an online portal alongside traditional paper filing at district offices.

This is the route most local businesses take, from tailoring, handicraft, food processing and printing units to small workshops. The process mirrors the DoI flow but is lighter: complete the application, attach citizenship and the required documents, submit to the relevant DCSI or OCSI office, undergo a completeness check and, for some categories, a site inspection, and receive the certificate. Cottage industries based on traditional skills and local resources are the ones listed in Schedule 2 of the Industrial Enterprises Act.

After registration, cottage and small industries generally still need to complete tax registration (obtaining a Permanent Account Number, and VAT registration if turnover or the nature of goods requires it) and any sector-specific licences. Note that industry registration is distinct from company or firm registration: many small operators register as a sole proprietorship or partnership firm with the local ward or the relevant registrar and then register the industry with DCSI.

The core of every industry registration file is the prescribed application form and a project report. The application is made in the format of Schedule 1 (the 'क' / Anusuchi form) of the Industrial Enterprises Rules, and it is accompanied by a project report or scheme prepared broadly along the lines set out in the Act's schedules for a project proposal. The project report typically describes the product or service, market, capacity, machinery, raw materials, capital structure and employment.

Alongside these, an applicant submits identity and entity documents. For a proprietorship or partnership, this means citizenship certificates of the owner or partners (and a partnership deed where applicable). For a company, it means the certificate of incorporation and certified copies of the memorandum and articles of association, plus citizenship of shareholders. Foreign investors additionally attach the foreign-investment approval, any joint-venture agreement, the financial project proposal, a bank credibility letter, and a passport copy in place of citizenship.

Environmental documentation is required where the size or nature of the industry crosses the thresholds in Nepal's environmental law. Smaller or lower-impact projects may need an Initial Environmental Examination (IEE), while larger or higher-impact projects require a full Environmental Impact Assessment (EIA); certain categories are exempt. Because environmental thresholds and schedules are updated by regulation, confirm the current requirement for your specific industry before filing, and budget time for the study, which can be the longest single step.

Timelines depend on the office, the classification and how complete your file is. In practice, straightforward micro, cottage and small registrations are often processed within about one to four weeks, while larger industries, foreign-investment cases and any file needing an IEE or EIA take considerably longer because of the environmental study and additional approvals. Foreign-investment industries in particular must first obtain investment approval and then register within the timeframe the department sets.

Registration fees are graduated by fixed capital and firm type rather than a flat rate. For domestic industries at the Department of Industry, initial registration fees are reported to range from a small nominal amount up to the low tens of thousands of rupees for the largest units, with renewal fees also scaled to size. Cottage and small industry fees at the DCSI are modest and vary with capital and category. Because these fee bands are set by regulation and revised periodically, treat any specific figure as indicative and confirm the current schedule on the official portal before paying.

A registration certificate is not the finish line. After udyog darta, an industry must obtain a Permanent Account Number (PAN) and register for VAT where applicable with the Inland Revenue Department, secure any sector-specific licences (for food, pharmaceuticals, hydropower and similar regulated sectors), and comply with labour, environmental and local-level requirements. Many industries must also renew or update their registration when they expand capacity, change classification, or add products, so keep the registering office informed of material changes.