Nepal has a rich tradition of community-based organizations and voluntary action, and over the years, this has led to the growth of Non-Governmental Organizations (NGOs) and International Non-Governmental Organizations (INGOs). These entities are key players in social development and humanitarian work, filling gaps in education, healthcare, environmental conservation, and poverty alleviation. However, establishing an NGO or INGO in Nepal requires following specific legal protocols to ensure compliance with national laws. This article outlines the registration process for NGOs and INGOs in Nepal, along with the legal requirements involved.

1.Understanding the Difference Between NGOs and INGOs

• NGO: An NGO is a legally constituted organization created by private individuals or groups, operating independently of the government, and primarily focused on providing services to society. NGOs in Nepal are usually engaged in sectors like education, health, human rights, women’s rights, and community development.
• INGO: An INGO is an international version of an NGO, often based abroad but working in Nepal through local partnerships. INGOs focus on the same areas as NGOs but on a larger scale, with international donors or funding agencies involved.

While the purpose of both types of organizations is similar, INGOs have additional requirements for working in Nepal due to their international presence and funding structure.

2.Legal Framework Governing NGOs and INGOs in Nepal

The following laws and regulations govern the registration and operation of NGOs and INGOs in Nepal:

• Social Welfare Act, 1992: This act provides the legal framework for registering NGOs and outlines the areas where NGOs can work.
• Association Registration Act, 1977: This act regulates the establishment of NGOs and ensures they follow constitutional and legal provisions.
• Social Welfare Council (SWC) Guidelines: The SWC, a governmental body, monitors and regulates both NGOs and INGOs in Nepal.
• National Directive Act, 1961: This act is critical for the operation of INGOs in Nepal, as it sets out the terms and conditions for their registration.

3.Registration Process for NGOs

NGOs in Nepal must register with the District Administration Office (DAO), and the process can be broken down into several key steps:

Step 1: Develop a Constitution/Bylaws

The constitution or bylaws are the foundation of an NGO, outlining the organization’s goals, objectives, structure, and operational procedures. This document must include:

• The name and address of the NGO
• The purpose and objectives of the organization
• Membership criteria, roles, and responsibilities
• The procedure for electing the executive committee
• Provisions for amendments to the bylaws

Note: The bylaws must adhere to the requirements set out in the Association Registration Act, 1977.

Step 2: Register with the District Administration Office (DAO)

After drafting the constitution, the next step is registration with the DAO, where the organization is based. The following documents are typically required for registration:

• Application form: This form must be duly filled and signed by the founding members.
• NGO Constitution/Bylaws: A copy of the NGO’s bylaws.
• Citizenship certificates: Photocopies of the citizenship certificates of all founding members.
• Minutes of the founding meeting: A formal record of the initial meeting of the organization’s founding members, which approves the establishment of the NGO.
• Tax clearance certificate: If any of the founding members are businesspersons, they must present their tax clearance certificates.
• Treasury receipt: Proof of payment of the registration fee to the DAO.

Once all documents are submitted, the DAO will review the application. If everything is in order, the DAO will issue a registration certificate. The NGO must also register with the Inland Revenue Department (IRD) to obtain a Permanent Account Number (PAN) for tax purposes.

Step 3: Register with the Social Welfare Council (SWC)

NGOs that wish to work in social welfare activities must register with the Social Welfare Council. The SWC monitors NGOs to ensure they comply with national policies, are engaged in lawful activities, and adhere to their objectives.

The following documents are required for SWC registration:

• DAO Registration Certificate: Proof that the NGO is registered with the DAO.
• Tax registration certificate: Proof of registration with the IRD.
• Work plan and budget: The NGO must submit a plan of action and an annual budget detailing their proposed activities.
• Affiliation fee: A nominal fee that must be paid to the SWC.

After submission, the SWC will review the documents, and if satisfied, it will issue an affiliation certificate.

Step 4: Register with the Inland Revenue Department (IRD)

The final step for NGOs is registering with the Inland Revenue Department (IRD) to obtain the organization’s PAN. This is essential for tax purposes and is mandatory for operating an NGO in Nepal.

4.Registration Process for INGOs

The process for registering an INGO in Nepal is more rigorous due to the international nature of the organization. INGOs must register with the Social Welfare Council (SWC), which monitors and regulates their activities. The process includes several steps:

Step 1: Memorandum of Understanding (MoU) with the SWC

Before commencing any activities, an INGO must sign a Memorandum of Understanding (MoU) with the SWC. The MoU outlines the organization’s goals, objectives, areas of work, and funding sources. This document must include:

• The INGO’s objectives and the sectors in which it plans to work.
• Details of any local partnerships with Nepali NGOs or government agencies.
• A detailed financial plan, including the source and use of funds.

Note: INGOs must demonstrate that their activities align with national priorities and development goals.

Step 2: Submit Documents to the SWC

The INGO must submit the following documents to the SWC for review:

• Articles of association: The INGO’s founding document outlining its objectives, structure, and operational guidelines.
• Registration certificate from the home country: A certificate of registration from the INGO’s country of origin, demonstrating that it is a legally constituted entity.
• Detailed project proposal: A comprehensive proposal for the work the INGO intends to carry out in Nepal, including budgets and timelines.
• Partnership agreements: Copies of any partnership agreements with local NGOs or government entities in Nepal.
• Board resolution: A resolution from the INGO’s board of directors approving its operations in Nepal.

Upon submission, the SWC will review the application to ensure that the proposed activities align with Nepal’s social development goals.

Step 3: Obtain SWC Approval

The SWC will thoroughly review the INGO’s application and may request additional documentation or clarification if needed. Once the SWC is satisfied, the INGO will receive approval to begin operations. This approval is typically valid for one to three years, after which it must be renewed.

Step 4: Tax and Financial Regulations

Like NGOs, INGOs must also register with the Inland Revenue Department (IRD) to obtain a PAN. Additionally, INGOs are required to maintain transparent financial records and submit annual reports to the SWC, detailing their activities and expenditures.

5.Challenges and Compliance Issues

The registration and operation of NGOs and INGOs in Nepal can face several challenges:

• Bureaucratic delays: The registration process can be delayed due to the need for multiple approvals from various government agencies.
• Regulatory oversight: Both NGOs and INGOs must ensure strict compliance with national laws and SWC guidelines. Failure to comply may lead to penalties or cancellation of registration.
• Monitoring and reporting: INGOs, in particular, are subject to stringent monitoring by the SWC and other governmental bodies to ensure their activities align with national development goals.
• Funding and financial transparency: NGOs and INGOs are required to demonstrate transparent accounting practices, and failure to do so can result in investigations by the SWC or tax authorities.

6.Conclusion

Establishing an NGO or INGO in Nepal requires a thorough understanding of the legal frameworks and adherence to multiple regulatory processes. From drafting the constitution to obtaining approvals from the Social Welfare Council, every step must be carefully managed to ensure compliance. For INGOs, additional steps such as signing an MoU with the SWC and aligning projects with national priorities add complexity to the process. However, once registered, these organizations can play a significant role in addressing Nepal’s socio-economic challenges and contribute meaningfully to the country’s development.

Please note that this guide is published for information purposes only and should not be considered as legal advice. You are requested to seek legal advice for specific factual situations. If you need further information on this matter, please Contact us at Legal Access Nepal Pvt. Ltd. 

Advocate: Yogeshwar Bhandari and Sushma Dahal

Contact no. 9851249077/ 9851346722