If you are a foreign investor evaluating private vs public company in Nepal, the decision shapes your costs, control, compliance burden, and speed to market. Nepal has opened steadily to international businesses, but its company law has nuances that can surprise first-time entrants. This guide explains, in plain language, how private and public companies differ, how to register each, and which structure best supports your market-entry goals in Nepal.
You will learn procedures, statutory requirements, realistic timelines, and practical pitfalls. By the end, you will know which route delivers the fastest, safest launch for your business.
Nepal’s corporate framework is governed primarily by the Companies Act, 2006, supported by sectoral laws and foreign investment regulations. For foreign companies, two incorporated forms dominate:
Private Limited Company (Pvt. Ltd.)
Public Limited Company (Ltd.)
While both are legal persons with limited liability, they differ sharply in ownership limits, disclosure obligations, and fundraising options.
When clients ask about private vs public company in Nepal, the most important distinction is who can own shares and how capital is raised.
A private company is designed for closely held ownership.
Key features
Minimum shareholders: 1
Maximum shareholders: 50
No public invitation to subscribe shares
Lower compliance and reporting burden
Ideal for foreign subsidiaries, joint ventures, and operating entities
Most foreign companies entering Nepal choose this structure first.
A public company is built for large-scale capital raising.
Key features
Minimum shareholders: 7
No maximum shareholders
Can issue shares to the public
Mandatory higher paid-up capital
Heavier regulatory oversight
Public companies are uncommon for initial foreign market entry.
| Aspect | Private Company | Public Company |
|---|---|---|
| Minimum shareholders | 1 | 7 |
| Maximum shareholders | 50 | Unlimited |
| Public share offering | Not allowed | Allowed |
| Minimum paid-up capital | NPR 100,000 | NPR 10,000,000 |
| Compliance burden | Low | High |
| Ideal for | Foreign subsidiaries, SMEs | Large enterprises, IPO plans |
Insight: Over 85% of foreign-owned incorporated businesses in Nepal start as private companies due to speed and flexibility.
For foreign investors, simplicity matters.
Faster registration
Lower capital lock-in
Easier shareholder control
Predictable compliance costs
Unless you plan a public listing or mass capital raising, a public company rarely adds value at entry stage.
Below is the standard procedure for incorporating either structure.
Name reservation with the Office of Company Registrar
Drafting constitutional documents
Memorandum of Association
Articles of Association
Capital declaration and shareholder details
Submission and approval by the Registrar
PAN registration with tax authorities
Industry-specific licenses, if required
Foreign investment approval, if applicable
Private companies usually complete this faster.
Name approval: 1–2 days
Incorporation approval: 5–10 working days
Total realistic timeframe: 2–3 weeks
Additional scrutiny and capital verification
Total realistic timeframe: 1–2 months
Understanding costs early avoids delays.
Government registration fees
Legal drafting and filing
Translation and notarization
Capital deposit confirmation
Foreign investment approvals
Indicative ranges
Private company: USD 1,000–2,500
Public company: USD 4,000–7,000+
Costs vary by industry and shareholding complexity.
Maintain statutory registers
File annual returns
Submit audited financials annually
Comply with labor and tax laws
Publish audited accounts
Hold statutory general meetings
Comply with securities regulations
Maintain stricter governance standards
For foreign owners, compliance predictability is a decisive factor.
Both private and public companies face the same corporate income tax rate, subject to incentives by sector.
Key taxes include
Corporate income tax
Withholding tax on dividends
VAT, if applicable
Payroll taxes and social security contributions
Tax treatment depends more on activity than company type.
Foreign investment is regulated under Nepal’s investment framework.
Important points
Certain sectors are restricted
Minimum investment thresholds may apply
Capital must be brought through approved banking channels
Repatriation of dividends is permitted, subject to compliance
Private companies handle these processes more smoothly.
Avoid these early missteps.
Choosing a public company without a capital strategy
Underestimating compliance costs
Delaying tax and labor registrations
Ignoring sector-specific approvals
A structured entry plan prevents costly restructuring later.
A public company may be appropriate if you:
Plan an IPO in Nepal
Require broad domestic capital participation
Operate regulated infrastructure sectors
Need enhanced public credibility
For most foreign service and operating businesses, this is a future step, not a starting point.
Choose a private company if you want:
Speed to market
Full shareholder control
Lower compliance burden
Flexible exit options
Choose a public company if you want:
Public fundraising
Large-scale expansion
Institutional investor participation
Long-term capital market access
Choosing private vs public company in Nepal is not just a legal formality. It is a strategic decision that affects cost, risk, and scalability. For most foreign companies, a private limited company delivers faster entry, cleaner governance, and operational freedom. Public companies serve a narrower purpose and are best considered later.
If you are planning to establish your presence in Nepal, the right structure from day one saves time and money.