NGO Registration in Nepal (Two Methods: CDO and OCR)

Non-Governmental Organizations (NGOs) play a vital role in Nepal’s social, environmental, and humanitarian development. Whether addressing education, healthcare, or community welfare, NGOs fill critical gaps in service delivery. To operate legally in Nepal, NGOs must be registered with the appropriate authorities. There are two primary ways to register an NGO: (1) as a non-profit organization at the District Administration Office (जिल्ला प्रशासन कार्यालय) under the Associations Registration Act, 2034, or (2) as a Not-For-Profit (NPO) company at the Office of Company Registrar (कम्पनी रजिष्ट्रारको कार्यालय) under the Companies Act, 2063. Additionally, NGOs must affiliate with the Social Welfare Council (समाज कल्याण परिषद्) and obtain tax exemption from the Inland Revenue Department (आन्तरिक राजस्व विभाग). This article provides a detailed, step-by-step guide to both registration processes, including tips, suggestions, and key Nepali terms, to help aspiring NGO founders navigate the system.

Understanding NGOs in Nepal

An NGO in Nepal is a non-profit entity that operates independently of the government to promote social, humanitarian, or environmental causes. NGOs cannot distribute profits or dividends to members; any surplus must be reinvested into the organization’s mission. Registering an NGO provides legal recognition, access to funding, and tax exemptions, enabling it to function effectively.

Why Register an NGO?

  • Legal Recognition: Allows the NGO to sign contracts, open bank accounts, and operate legally.
  • Access to Funding: Registered NGOs can receive domestic and international grants.
  • Tax Benefits: Eligible for income tax exemptions.
  • Credibility: Enhances trust among donors, partners, and communities.

Option 1: Registering an NGO at the District Administration Office (जिल्ला प्रशासन कार्यालय)

NGOs can be registered at the District Administration Office (DAO) in any of Nepal’s 77 districts under the Associations Registration Act, 2034. This is the most common method for local NGOs focusing on community-based work.

Steps for DAO Registration

  1. Form a Founding Committee (संस्थापक समिति)
    • Gather at least seven Nepali citizens to serve as board members, including a President, Vice-President, Secretary, Treasurer, and others.
    • Collect notarized copies of citizenship certificates, passport-sized photos, and character reports from the Nepal Police for each member.
  2. Obtain a Ward Recommendation Letter (वडा सिफारिस पत्र)
    • Submit an application to the ward office where the NGO’s office is located, including:
      • A request letter detailing the NGO’s proposed activities.
      • Copies of board members’ citizenship certificates.
      • A rent agreement with the office landlord and the landlord’s citizenship copy.
    • The ward president signs and stamps the recommendation letter.
  3. Get a District Coordination Committee (DCC) Recommendation (जिल्ला समन्वय समिति सिफारिस)
    • Submit the ward recommendation letter, NGO constitution (विधान), and board members’ documents to the DCC.
    • The DCC ensures the NGO’s objectives align with district goals.
  4. Register at the District Administration Office (जिल्ला प्रशासन कार्यालय)
    • Submit the following documents to the DAO:
      • Application form (five copies).
      • NGO constitution (विधान) signed by all board members.
      • Ward and DCC recommendation letters.
      • Copies of board members’ citizenship certificates, photos, and police reports.
      • Rent agreement and landlord’s documents.
      • Minutes of the founding meeting.
    • The DAO issues a Certificate of Registration (दर्ता प्रमाणपत्र) after review.
    • Fee: Approximately NPR 6,000, varying by district.
  5. Affiliate with the Social Welfare Council (समाज कल्याण परिषद्)
    • Within three months of DAO registration, apply for SWC affiliation to operate legally and access foreign funding.
    • Submit:
      • DAO registration certificate.
      • NGO constitution and board members’ details.
      • Ward and DCC recommendation letters.
      • Application form and project proposals (if applicable).
    • Fee: NPR 3,000.
    • Renewal is required every three years.
  6. Register for a Permanent Account Number (PAN) at the Inland Revenue Department (आन्तरिक राजस्व विभाग)
    • Apply for a PAN to open a bank account and ensure tax compliance.
    • Submit:
      • DAO registration certificate.
      • SWC affiliation certificate.
      • Minutes specifying the board member authorized to sign.
      • Citizenship copy and photos of the authorized signatory.
      • Office location map and rent agreement.
    • A temporary PAN certificate, valid for three months, is issued initially
  7. Apply for Tax Exemption at the IRD
    • Submit an application for a Tax Exemption Certificate (कर छुट प्रमाणपत्र), including:
      • MOA, AOA (if applicable), or constitution.
      • PAN certificate.
      • Audit report (if available).
      • Tax Deducted at Source (TDS) payment certificates.
    • The certificate is valid for one year and must be renewed annually

Time and Cost

  • Duration: 1–2 months, depending on document preparation and approval.
  • Total Cost: NPR 6,000–10,000, including DAO, SWC, and ward fees.

Option 2: Registering a Not-For-Profit Company at the Office of Company Registrar (कम्पनी रजिष्ट्रारको कार्यालय)

Alternatively, an NGO can be registered as a Not-For-Profit (NPO) company at the Office of Company Registrar (OCR) under the Companies Act, 2063. This method suits organizations with broader objectives or those seeking a corporate structure.

Steps for OCR Registration

  1. Reserve a Company Name Online
  • Visit the OCR website and reserve a unique name for the NPO company.
  • The name must reflect the non-profit nature, e.g., “Nepal Welfare Foundation.”
  1. Prepare Memorandum and Articles of Association (प्रबन्धपत्र र नियमावली)
  • Draft the Memorandum of Association (प्रबन्धपत्र), outlining the company’s objectives, and the Articles of Association (नियमावली), detailing internal rules.
  • Submit two signed copies of each, along with:
    • Notarized citizenship certificates of at least five promoters.
    • Power of attorney (if applicable).
    • Board resolution if a promoter is a company.
  1. Submit Application to OCR
  • Upload documents via the OCR dashboard after name approval.
  • The OCR reviews documents and issues a Certificate of Registration (दर्ता प्रमाणपत्र).
  • Fee: NPR 15,000 (waived for FY 2080/81).
  1. Register at the Ward Office
  • Apply for business registration at the ward office where the office is located.
  • Fee: NPR 2,000 + 10% of rent as Tax Deducted at Source (TDS).
  1. Obtain a PAN at the Inland Revenue Department
  • Submit the OCR registration certificate, MOA, AOA, and board members’ details to obtain a PAN.
  • No fee is required for PAN registration.
  1. Affiliate with the Social Welfare Council
  • Apply for SWC affiliation, as described in the DAO process, to receive foreign grants.
  • Fee: NPR 3,000.
  1. Apply for Tax Exemption at the IRD
  • Follow the same process as for DAO-registered NGOs to obtain a tax exemption certificate.

Time and Cost

  • Duration: 4–6 weeks, assuming all documents are complete.
  • Total Cost: NPR 5,000–20,000, depending on fees and legal assistance.

Key Differences Between DAO and OCR Registration

AspectDAO RegistrationOCR Registration
Governing LawAssociations Registration Act, 2034Companies Act, 2063
Minimum Members7 Nepali citizens5 promoters (individuals or entities)
Registration AuthorityDistrict Administration OfficeOffice of Company Registrar
StructureMembership-based, less formalCorporate structure, more formal
FeesNPR 6,000–10,000NPR 5,000–20,000 (varies by fiscal year)
SuitabilityLocal, community-focused NGOsBroader objectives, corporate-style NGOs

Post-Registration Obligations

  1. Annual Renewals
    • DAO: Renew registration annually with the DAO, ward office, and IRD by submitting annual reports, audited financial statements, and tax clearance certificates.
    • OCR: No annual renewal fee, but financial reports must be submitted to OCR.
    • SWC: Renew affiliation every three years for NGOs receiving foreign funding.
  2. Financial Reporting
    • Maintain transparent accounting records and conduct annual audits by certified auditors.
    • Submit financial and activity reports to SWC, DAO, and IRD.
  3. Tax Compliance
    • File annual tax returns, even if exempt from income tax.
    • Ensure foreign donations comply with anti-money laundering regulations.
  4. Activity Reporting
    • Submit progress reports on projects to SWC and DAO to demonstrate alignment with objectives.

Tips for Successful NGO Registration

  1. Define Clear Objectives: Ensure the NGO’s mission is specific and aligned with social welfare goals to avoid rejection.
  • Example: Instead of “general welfare,” specify “providing education to underprivileged children.”
  1. Prepare Complete Documents: Double-check all documents for accuracy to prevent delays.
  • Use a checklist to ensure all required items (citizenship copies, rent agreements, etc.) are included.
  1. Engage Legal Experts: Hire a lawyer or consultant familiar with Nepal’s NGO laws to streamline the process.
  • Contact firms like Prime Law Associates or Lawneeti Associates for assistance.
  1. Build a Strong Board: Select committed, credible board members with diverse skills to enhance governance.
  1. Plan for Funding: Register with SWC early if seeking foreign grants, as approval is mandatory.
  1. Maintain Compliance: Set up systems for financial transparency and timely reporting to avoid penalties.

Common Mistakes to Avoid

  1. Incomplete Documentation: Missing documents, like police reports or rent agreements, can delay registration.
  2. Vague Constitution: An unclear mission or objectives may lead to rejection by DAO or SWC.
  3. Skipping SWC Affiliation: NGOs planning to receive foreign funding must affiliate with SWC to avoid legal issues.
  4. Ignoring Renewals: Failure to renew registrations or tax exemptions can result in fines or loss of status.
  5. Non-Compliance with Tax Laws: Even tax-exempt NGOs must file annual returns.

Suggestions for Aspiring NGO Founders

  1. Research Existing NGOs: With over 39,000 NGOs registered in Nepal (1977–2014), ensure your NGO addresses a unique need.
  2. Network with Stakeholders: Build partnerships with local governments, other NGOs, and donors to enhance impact.
  3. Invest in Governance: Establish clear policies for financial management, transparency, and accountability.
  4. Use Technology: Create a website to attract volunteers, donors, and beneficiaries.
  5. Monitor and Evaluate: Implement systems to track program progress and improve effectiveness.

Legal Framework in Nepal

Key laws governing NGO registration include:

  • Associations Registration Act, 2034: Governs DAO-registered NGOs.
  • Companies Act, 2063: Regulates NPO companies at OCR.
  • Social Welfare Act, 2049: Mandates SWC affiliation for NGOs receiving foreign funding.
  • Income Tax Act, 2058: Provides tax exemptions for registered NGOs. Registering an 

NGO in Nepal, whether at the District Administration Office (जिल्ला प्रशासन कार्यालय) or the Office of Company Registrar (कम्पनी रजिष्ट्रारको कार्यालय), is a critical step toward creating a legally recognized, impactful organization. Affiliation with the Social Welfare Council (समाज कल्याण परिषद्) and obtaining a tax exemption from the Inland Revenue Department (आन्तरिक राजस्व विभाग) further enhance an NGO’s ability to operate effectively. By following the outlined steps, preparing thorough documentation, and maintaining compliance, aspiring NGO founders can establish a strong foundation for their mission. With careful planning and commitment, your NGO can contribute meaningfully to Nepal’s development landscape.

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