Private vs public company in Nepal is often the first comparison foreign investors make when exploring market entry. But structure alone is not the real gatekeeper. Sector eligibility is. Nepal allows foreign investment only in specific industries, regardless of whether you form a private or public company. This guide clarifies which sectors are off-limits, why those restrictions exist, and how foreign companies can still enter Nepal strategically and compliantly.
If you are planning FDI, this article helps you avoid dead ends before capital is committed.
Foreign investors often assume that choosing the right company type unlocks the market. In Nepal, the industry you choose matters more than the structure you choose.
Both private and public companies can receive foreign investment. But only if the underlying activity is permitted.
Key reality:
Nepal regulates what foreigners can do, not just how they incorporate.
Before diving into restricted sectors, let’s anchor the basics.
A private company in Nepal is the most common FDI vehicle.
Typical characteristics:
Most foreign-owned Nepali companies are private companies.
A public company is designed for scale and capital markets.
Typical characteristics:
Foreign investment is allowed in public companies, subject to sector rules.
Nepal maintains a Negative List of industries where foreign investment is prohibited or restricted. This list applies equally to private and public companies.
No structure can bypass it.
The following sectors are closed to foreign investors under Nepal’s foreign investment framework.
Industries reserved for local entrepreneurship include:
These are protected to preserve local livelihoods.
Foreigners cannot engage in:
Large wholesale or export-oriented trading may qualify, but retail does not.
The following are restricted:
These are considered local employment sectors.
Foreign investment is restricted in:
Commercial agribusiness for export may be evaluated separately.
Foreigners cannot invest in:
This protects cultural sovereignty.
Some sectors are not banned, but heavily regulated.
These require cabinet-level approvals and are rarely granted.
| Aspect | Private Company | Public Company |
|---|---|---|
| Foreign ownership allowed | Yes | Yes |
| Subject to restricted sector list | Yes | Yes |
| Typical foreign use | Subsidiary, back-office | Infrastructure, energy |
| Compliance burden | Moderate | High |
| Public fundraising | Not allowed |
Insight:
A public company does not override sector restrictions. It only changes capital-raising mechanics.
Nepal’s policy objectives are clear.
Primary goals include:
These principles shape the negative list.
Many foreign investors fail in Nepal before incorporation.
Typical errors include:
These mistakes cause sunk costs and regulatory rejection.
A restricted sector does not always mean “no entry.”
Smart alternatives exist.
Best for:
No revenue generation is allowed.
Foreign companies can:
This is common in IT and back-office operations.
In rare cases:
This requires careful structuring.
Foreign investors commonly succeed in these areas:
Sector eligibility always comes first.
Foreign investment approval typically involves:
Each authority reviews sector eligibility independently.
Nepal’s foreign investment framework is anchored in:
These are publicly issued and consistently enforced.
A disciplined approach saves months.
Recommended process:
This sequence matters.
For foreign companies, private vs public company in Nepal is not the strategic starting point. Sector eligibility is.
If your industry is restricted, no structure will work. If your sector is permitted, the right structure amplifies success.
Smart investors validate the sector first, then optimize the vehicle.
Foreigners cannot operate small or local retail businesses. Large wholesale or export-oriented trading may be permitted with approval.
Traditional agriculture for domestic markets is restricted. Commercial, export-focused agribusiness may qualify case by case.
No. Public companies follow the same sector restrictions as private companies.
Using nominees or informal partners is illegal and risky. Regulators actively screen beneficial ownership.
A private company in a permitted sector is the most common and efficient FDI structure.