Non-profit organizations (including NGOs, INGOs, and charitable foundations) play a pivotal role in Nepal’s socio-economic development. They operate across a spectrum of fields such as disaster relief, education, healthcare, environment, gender empowerment, and cultural preservation, often supplementing or partnering with government efforts in these domains. Nepal, as a developing country, has been a hub for international NGOs and receives significant overseas development assistance funneled through non-profits. As a result, the regulatory environment for non-profits is robust. All non-profit organizations must navigate registration and oversight by the Social Welfare Council (SWC) if they receive foreign aid, in addition to registering as an NGO or non-profit company at the local or central level. They also need to sign general agreements and project agreements with SWC for foreign-funded projects, comply with reporting requirements, and adhere to conditions on the use of funds (to ensure transparency and that funds are used for intended charitable purposes). Non-profits enjoy certain tax exemptions (for example, on donations, and customs duty exemptions on imported relief materials), but to maintain these benefits they must strictly follow the regulatory framework. Failing to comply – whether in governance, financial reporting, or operational scope – can lead to deregistration, penalties, or expulsion of foreign staff.

Gandhi & Associates offers specialized legal support tailored to the unique needs of non-profit organizations operating in Nepal. We assist both local NGOs and foreign NGOs/aid agencies in establishing a legal presence in Nepal – advising on whether to register as an Association or a Company Not Distributing Profits and carrying out the registration process accordingly. For foreign NGOs (INGOs), we provide guidance on obtaining approval from the Social Welfare Council, by entering into the General Agreement that outlines the broad areas of work in Nepal, and Project Agreements for specific projects, ensuring they meet SWC’s requirements and Nepal’s development priorities. Our firm advises on regulatory compliance during operations: this involves everything from labor law compliance for NGO employees and consultants, to meeting financial reporting and audit requirements set by donors and Nepali regulators, to complying with immigration rules for expatriate staff (work visas, terms of involvement, etc.). We also advise on interactions with government bodies, such as securing approvals from relevant ministries for projects in certain sectors (for instance, a health project might need Ministry of Health sign-off). Given the sensitivity of non-profit operations, we help in risk management, reviewing programs for any legal issues (for example, ensuring community agreements are in place for local projects, or that data collection by an NGO complies with privacy norms) and advising on liability issues (like if an NGO is sponsoring volunteers, we ensure proper waivers and insurance). Additionally, we support non-profits in dealing with any legal disputes or investigations – which might range from employment disputes within the NGO to inquiries by authorities into project activities – aiming to resolve them cooperatively given the public-service nature of our clients’ work. Our overarching goal is to handle the legal complexities so that our non-profit clients can focus on their mission of delivering aid and social services where they are most needed.

Representative Experience:

• In the immediate aftermath of the 2015 Nepal earthquakes, assisted several of the world’s largest foreign non-profit organizations in navigating Nepal’s legal landscape to provide humanitarian aid. This included helping these INGOs swiftly establish a presence by entering into General Agreements with the Social Welfare Council, obtaining emergency approvals for relief projects, and advising on tax and customs exemptions for importing relief materials and funds;
• Advised an international development NGO on the implementation of a USAID-funded rural livelihoods program, including compliance with Nepal’s foreign aid and reporting regulations, registration of project offices, and coordination with relevant line ministries;
• Advised a prominent domestic health foundation – established in memory of a national figure – on its dual structure combining a charitable trust and ownership of a premium hotel in Pokhara, with proceeds from the hospitality business supporting heart health initiatives, and securing annual approvals for temporary licensing of foreign doctors participating in health camps under the Nepal Medical Council framework;
• Advised a global faith-based humanitarian organization on approvals for receiving foreign assistance and the legal processes required to bring in international personnel and aid. Our work has also included labor advisory, including disciplinary actions and terminations in accordance with Nepal’s labor laws;
• Advised an international NGO focused on housing and urban development on structuring its Nepal operations, including partnership agreements with community-based organizations, labor law compliance for field staff, and regulatory procedures for asset handover to municipal and local entities at the conclusion of donor-funded programs; and
• Represented a long-standing faith-based NGO that has been active in Nepal since the 1980s, with unique ownership of real estate used for a community hospital. We are advising on the legal transfer of this property to a locally governed community organization, ensuring compliance with land, health, and non-profit laws.