NGO and INGO Registration in Nepal - Law Kendra

Comprehensive Guide to NGO and INGO Registration in Nepal

Establishing a Non-Governmental Organization (NGO) or an International Non-Governmental Organization (INGO) in Nepal involves several legal procedures and compliance measures.

Whether your objective is social welfare, humanitarian aid, or developmental initiatives, understanding the registration process is vital. This guide outlines the entire process, ensuring clarity and compliance with Nepalese law.

Understanding NGO and INGO Registration in Nepal

NGOs and INGOs operate under different regulatory frameworks in Nepal. NGOs are locally registered entities focusing on social and developmental work, whereas INGOs are international organizations that collaborate with Nepalese authorities for project implementation.

Key Legal Frameworks Governing NGOs and INGOs in Nepal

1. The Association Registration Act, 2034 (1977) – Regulates NGO formation.
2. The Social Welfare Act, 2049 (1992) – Establishes guidelines for social organizations.
3. The Companies Act, 2063 (2006) – Provides an alternative registration route for non-profit entities.
4. Foreign Aid Policy, 2071 (2014) – Governs the operations of INGOs in Nepal.

Step-by-Step Guide to NGO Registration in Nepal

Step 1: Establishing the Organization and Preparing Documents

• Form a board comprising at least seven Nepali citizens, including a President, Vice-President, Secretary, Treasurer, and additional members.
• Obtain notarized copies of citizenship certificates, passport-sized photographs, and police-issued character verification reports for all board members.
• Draft a Constitution (Bidhan) outlining the NGO’s mission, governance structure, and objectives.
• Prepare the Memorandum and Articles of Association.
• Document the minutes of the initial board meeting, assigning roles and responsibilities.
• Secure an office location and prepare a rental agreement along with official stamps featuring the NGO’s logo.

Step 2: Application for Ward Office Recommendation

• Submit an application to the ward office, attaching:
  • The Constitution signed by all members
  • Meeting minutes of the ad hoc committee
  • Notarized copies of citizenship certificates
  • Rental agreement and land tax receipt
  • House owner’s notarized citizenship copy
• Ensure the application bears the President’s signature and official stamp.

Step 3: Obtaining District Coordination Committee (DCC) Approval

• Present the ward office’s recommendation letter and all relevant documents to the DCC.
• Submit an application signed by all board members to receive a formal recommendation letter from the DCC.

Step 4: Registration with the District Administration Office (DAO)

• Submit the complete registration application, including:
  • The Constitution (four signed copies)
  • All recommendation letters
  • Rental agreement and police clearance reports
• Upon verification, the DAO grants the registration certificate.

Step 5: Affiliation with the Social Welfare Council (SWC)

• File an application with the SWC, including:
  • The SWC application form
  • DAO-issued registration certificate
  • DCC recommendation letter
  • Additional supporting documents
• SWC affiliation formalizes the NGO’s legal status.

Step 6: Obtaining a Permanent Account Number (PAN)

• Register with the Inland Revenue Department (IRD) to acquire a PAN for taxation and financial transactions.
• Submit required documents such as the registration certificate, board meeting minutes, and signatory identification.
• A temporary PAN is issued initially, followed by a permanent PAN certificate within three months.

Learn more about NGO registration here.

Step-by-Step Guide to INGO Registration in Nepal

Step 1: Initial Application Submission to the Social Welfare Council (SWC)

• Submit an application to the SWC detailing the organization’s mission, scope, and financial commitments.
• Provide key documents including:
  • Registration certificate from the INGO’s home country
  • Constitution or bylaws of the organization
  • Additional supporting paperwork
• The SWC assesses whether the INGO’s objectives align with Nepal’s national priorities.

Step 2: Drafting and Submitting the General Agreement

• Once the application is reviewed, the INGO must submit a General Agreement outlining its operational framework, including financial contributions and project details.
• The SWC consults relevant ministries to review the agreement and may request modifications or clarifications.
• The agreement must pass through an SWC evaluation committee before approval.

Step 3: Finalizing the General Agreement

• The INGO and SWC negotiate the final terms of engagement, covering financial contributions, areas of operation, and commitments.
• Upon agreement, both parties sign the document, granting the INGO legal authorization to function in Nepal.

Step 4: Registration with Relevant Government Ministries

• The INGO must register with specific ministries based on its project focus (e.g., the Ministry of Education for education-based initiatives).
• The INGO must appoint a Country Director, subject to SWC and ministerial approval.

Step 5: Office Setup and Project Implementation

• The INGO establishes its office and secures necessary operational permits, including visas for foreign staff.
• It must collaborate with local NGOs for project execution.
• Within three months of signing the General Agreement, the INGO submits project proposals to the SWC for approval.
• Upon approval, individual Project Agreements define the specific operational plans.

Explore INGO registration compliance details.

For expert legal guidance, contact Law Kendra. Our legal professionals streamline NGO/INGO registration and ensure full compliance with Nepalese regulations.

Compliance Requirements for NGOs

NGOs and INGOs must adhere to the following compliance guidelines:

• Annual financial reporting to SWC and the relevant government authorities.
• Submission of audit reports within six months of the fiscal year-end.
• Renewing registration every five years.

Discover more about compliance management.

 Compliance & Requirements for INGOs in Nepal

To operate in Nepal, INGOs must adhere to strict regulatory guidelines to maintain good standing. These requirements ensure transparency and efficiency in their operations.

Financial Transparency

• INGOs must submit audited financial statements annually to the Social Welfare Council (SWC) and relevant authorities.
• Expenditure records should clearly demonstrate that funds are allocated as per project agreements.

Activity Progress Reports

• Regular updates on project activities, accomplishments, and challenges must be submitted to the SWC and respective ministries.

Collaborative Local Engagement

• INGOs must work alongside local NGOs for project execution.
• Capacity-building initiatives should be undertaken to empower local organizations and eventually transfer project management responsibilities to them.

Hiring Policies

• INGOs should prioritize hiring Nepali citizens for roles whenever possible.
• Foreign staff appointments should be limited to specialized positions where local expertise is unavailable.

Visa and Work Permit Regulations

• Foreign personnel must acquire the necessary visas and work permits, with coordination from the SWC.

Tax Responsibilities

• Although INGOs may be eligible for income tax exemptions, they must comply with other applicable tax regulations, such as withholding taxes on employee salaries.

Adherence to Project Agreements

• All operations must align with the terms outlined in approved Project Agreements.
• Any major modifications in project scope or funding allocations require prior approval from the SWC.

Coordination with Local Authorities

• INGOs should engage with local government bodies and participate in district-level meetings to ensure alignment with national and regional strategies.

Alignment with National Development Goals

• INGO activities should align with Nepal’s national development policies and support the country’s long-term growth plans.

Ethical Standards

• INGOs must uphold the Basic Operating Guidelines (BOGs) established by Nepal’s donor community, which emphasize ethical conduct, transparency, and neutrality.

Challenges and Solutions in NGO/INGO Registration

Common Challenges:

• Lengthy approval process
• Changing regulatory policies
• Compliance with financial laws

Solutions:

• Engage legal professionals to navigate bureaucracy.
• Maintain transparency in financial transactions.
• Regularly update compliance documentation.

Additional Legal Services for NGOs/INGOs

At Law Kendra, we provide a range of legal services to support NGOs and INGOs in Nepal, including:

• Law Reform and Policy Development (Learn More)
• Company Registration (Explore Here)
• Tax Compliance and Dispute Resolution (Discover More)
• Intellectual Property Protection (See Details)

For expert legal assistance, contact Law Kendra. Our dedicated legal professionals ensure seamless NGO/INGO registration and compliance management in Nepal.

Frequently Asked Questions

Can an NGO or INGO be registered in Nepal without local Nepali board members?

No, NGOs must have at least seven Nepali citizens on the board, and INGOs must comply with specific local governance requirements. Foreign individuals can be part of the board, but local representation is mandatory.

What happens if an NGO or INGO fails to meet the compliance requirements in Nepal?

Failure to comply with the legal requirements, such as financial reporting or project implementation, can result in penalties, suspension, or even the cancellation of registration.

Can an NGO or INGO operate in multiple districts in Nepal?

Yes, NGOs and INGOs can operate in multiple districts in Nepal, but they must ensure that their activities comply with local regulations and align with national development goals.

Are there any restrictions on the types of projects INGOs can undertake in Nepal?

INGOs must ensure that their projects align with Nepal's national priorities. Some sectors may have specific restrictions, and the SWC reviews projects to ensure they meet the country's needs.

Can INGOs receive funding from foreign sources without government approval?

No, INGOs must submit their funding sources for approval as part of the registration and project agreement process. Foreign donations are monitored to ensure compliance with Nepalese financial regulations.