Everything Businesses Need to Know About Nepal’s New Company Act Draft
Summary
Nepal is drafting a new Company Act to modernize business regulation with higher capital requirements for public companies, a 1% share transfer tax under review, centralized CSR fund contributions, and stricter beneficial ownership disclosures to align with global standards and support the digital economy.
Key Points
- The new Company Act introduces tiered minimum capital requirements: Rs 50 million for unlisted public companies and Rs 250 million for listed companies, replacing the uniform Rs 10 million threshold.
- A controversial 1% share transfer tax on transactions above Rs 2.5 million has been proposed but is facing government revision due to market opposition.
- Companies with annual turnover over Rs 250 million must contribute at least 1% of net profit to a centralized CSR fund managed by a government-appointed committee, replacing discretionary social spending.
- The act mandates disclosure of beneficial ownership with heavy penalties for concealment, aiming to prevent money laundering and asset concealment prevalent under previous laws.
