The Twin Otter was found crashed at Masine Lek in Arghakhanchi district.
"We have found the aircraft crashed in the site, but it is yet to be confirmed, whether the passengers and crew members survived or not," Nepal Police spokesman Ganesh KC said.
According to media reports, no one is believed to have survived in the crash.
Security personnel located the crash site after tracking the mobile phone carried by Captain Shanker Shrestha.
The aircraft from the state-run carrier was travelling to the town of Jumla.
Heavy rain hampered yesterday's efforts to locate the plane with two helicopters forced to turn back because of bad weather.
One of the passengers was from Denmark and the rest were from Nepal, said airline spokesman Ram Hari Sharma.
