Choosing between a private vs public company in Nepal is one of the first strategic decisions foreign investors must make. The structure you select affects registration costs, regulatory burden, capital flexibility, and long-term scalability.
This beginner-friendly yet authoritative guide explains company formation expenses in Nepal, compares private and public companies, and highlights what foreign founders need to budget for from day one. If you want clarity before committing capital, you are in the right place.
Nepal is increasingly attractive for foreign companies due to competitive labor costs, strategic access to South Asia, and improving digital company registration systems. Regulatory clarity has also improved under the Companies Act framework.
Foreign investors typically choose between:
Private Limited Company
Public Limited Company
Understanding the cost and compliance differences is essential before incorporation.
Company registration in Nepal is primarily governed by:
Companies Act, 2063 (2006)
Foreign Investment and Technology Transfer regulations
Tax and labor laws administered by relevant authorities
Company incorporation is overseen by the Office of Company Registrar, which maintains the official register of companies.
A private limited company in Nepal is the most common structure for foreign-owned businesses.
Minimum 1 shareholder
Maximum 50 shareholders
Shares are not publicly traded
Lower compliance and disclosure requirements
This structure is ideal for subsidiaries, joint ventures, and back-office operations.
A public limited company is designed for large enterprises seeking public investment.
Minimum 7 shareholders
No upper limit on shareholders
Can issue shares to the public
Higher regulatory and reporting obligations
Public companies are typically used for banks, insurance companies, and large infrastructure projects.
| Factor | Private Company | Public Company |
|---|---|---|
| Minimum shareholders | 1 | 7 |
| Maximum shareholders | 50 | Unlimited |
| Share transfer | Restricted | Freely transferable |
| Public share issue | Not allowed | Allowed |
| Compliance cost | Lower | Significantly higher |
| Suitable for foreign SMEs | Yes | Rarely |
This comparison alone explains why most foreign investors choose private companies.
Understanding company formation expenses in Nepal requires separating government fees from professional and compliance costs.
Registration fees are based on authorized capital.
Indicative OCR registration fees:
NPR 1 million capital: approx. NPR 1,000
NPR 10 million capital: approx. NPR 9,500
NPR 100 million capital: scaled progressively
Public companies incur higher registration and approval fees due to capital thresholds.
Foreign investors usually incur additional costs for:
Legal structuring
Document drafting
Certified translations
Regulatory coordination
These costs vary based on complexity but are unavoidable for compliant setup.
There is no minimum paid-up capital for most sectors, but:
Sector-specific rules may apply
Bank account setup and inward remittance documentation are required
Public companies typically need substantially higher capital commitments.
Annual return filing
Basic financial statements
Tax filings
Statutory registers
Annual audited financials
General shareholder meetings
Enhanced disclosures
Regulatory reporting
Compliance costs for public companies can be 3–5× higher annually than private companies.
Foreign companies often underestimate recurring costs.
Typical annual expenses include:
Accounting and bookkeeping
Tax compliance
Audit fees
Labor and social security compliance
Company secretarial filings
Private companies enjoy simplified annual compliance, making them cost-efficient.
Despite higher costs, public companies may be suitable when:
You plan to raise capital from the Nepali public
Regulatory licensing requires public status
Long-term IPO is a strategic objective
For most foreign SMEs, these conditions do not apply.
Faster registration
Predictable costs
Easier exit
Full operational control
Large infrastructure projects
Financial institutions
Capital-intensive ventures
This reinforces the dominance of private companies in FDI structures.
Many first-time investors:
Overestimate the need for a public company
Underbudget compliance expenses
Ignore post-registration obligations
Choosing the wrong structure increases costs without adding value.
Here is a simplified overview:
Name reservation
Document preparation
OCR registration
PAN and tax registration
Bank account setup
Sectoral approvals (if required)
Private companies typically complete this process faster.
The private vs public company in Nepal decision is not just legal. It is financial, operational, and strategic.
For most foreign companies, a private limited company offers lower formation expenses, simpler compliance, and faster market entry. Public companies are best reserved for large-scale ventures with clear capital-raising needs.
If you want a cost-efficient and compliant entry into Nepal, structure matters.
A private company restricts share transfers and has fewer shareholders. A public company can raise funds from the public and has higher compliance obligations.
Yes, subject to sector eligibility and foreign investment approvals.
Most sectors have no fixed minimum capital, but regulated sectors may impose thresholds.
No. Large investments can still operate as private companies unless public fundraising is required.
Private companies are significantly cheaper due to reduced audit and reporting requirements.