US LLC from Nepal: Is It Even Allowed? NRB Rules, Tax and Banks

0:00Freelancers in Nepal: the advice nobody finishes

Freelancers in Nepal keep hearing the same advice: get a US company. Here's what almost nobody says next. For most of them, it isn't the right move. And for some, it may not even be allowed. We're BaseAcross. We set up US companies for founders outside America, so we'll be straight with you. Let's climb this one camp at a time, with Prakriti, a developer in Kathmandu.

0:27Do you even need a US company? The 5% final tax

Base camp: do you even need one? Clients abroad pay Prakriti for software work, and her bank in Nepal already handles that. It collects a small tax on that foreign pay, and under the latest Finance Act, that's her final tax on it. A US company wouldn't make that simpler. It would add filings in two countries, every year. So for most freelancers, the honest answer is: you don't need one.

0:55Can a Nepali citizen own a US LLC? The 1964 law and NRB

Camp one is the part most videos skip. A Nepali law from 1964 restricts investing abroad, unless the government publishes an exemption. The central bank says it plainly: Nepali citizens can't invest abroad, and even a foreign bank account counts. A share in a US company is likely to count too. There is a newer route, but it's for companies. A Nepali company registered in the IT industry can invest abroad through its bank, within set limits.

It isn't a route for individuals. So before anything else, Prakriti asks a Nepali lawyer who could own the company, and how.

1:36Forming the LLC and an EIN without an SSN

If the owner can lawfully hold it, the American part is quick. For an IT company setting up a subsidiary, or raising from investors, that's usually a Delaware C-Corp. For a smaller owner-run business, a Wyoming LLC. A registered agent's address for legal papers. State approval, and the company exists. Then the US tax number, the EIN. Without a social security number, it's a paper form to the IRS, and her PAN isn't part of it.

2:09Which US bank works from Nepal?

The bank is harder. The US fintech banks most videos recommend don't serve founders who live in Nepal, and every payment provider decides for itself. So plan the bank before you form, not after, and use the same name, address and description of the business everywhere.

2:29Nepal tax, no US treaty, and Form 5472

Then the calendar. Nepal taxes its residents on income from anywhere. A foreign company a resident holds can be treated as paying out its income every year, and taxed in Nepal. And a company managed effectively from Nepal can be resident there. Have a tax adviser look at that early, not after the first good year. There's no tax treaty between Nepal and the US, so tax withheld on US dividends or royalties stays at the full rate.

Work done in Nepal generally isn't US income, but the company still files a report with the IRS, and the penalty for missing it is large.

3:09Three questions for a Nepali lawyer and tax adviser

So, three questions for a Nepali lawyer and tax adviser, before you order anything. Can I own a US company at all, or should a Nepali IT company own it? Do I need one, given the final tax on my freelance pay? And how would Nepal tax its profit? The full guide, with every source we used, is linked below. And Prakriti? She kept invoicing from Kathmandu.