If you are evaluating Private vs public company in Nepal, your first structural decision will shape taxation, compliance, control, and capital strategy. For foreign companies entering Nepal, choosing the right company form is not just procedural. It is strategic.
Nepal’s legal framework is governed primarily by the Companies Act 2006, the Foreign Investment and Technology Transfer Act 2019 (FITTA), and the Income Tax Act 2002. These laws determine how foreign investors structure operations, repatriate profits, and manage regulatory exposure.
This guide breaks down everything foreign companies need to know. We compare private and public companies, explain incorporation steps, outline compliance obligations, and highlight risk considerations.
If your goal is market entry, scalability, and capital protection, this is your roadmap.
Nepal’s corporate environment is centralized under the Office of the Company Registrar (OCR). All companies must register here.
Foreign investment approvals are handled by the Department of Industry or the Investment Board Nepal, depending on sector and size.
These statutes define ownership limits, director requirements, shareholder rules, compliance reporting, and tax rates.
For foreign companies, structure determines regulatory friction. That is why the Private vs public company in Nepal question matters early.
A private company is the most common structure for foreign investors.
Core features:
This structure is flexible. It is ideal for FDI-backed subsidiaries and joint ventures.
A public company is more regulated.
Core features:
Public companies are used for large-scale enterprises or capital markets access.
| Criteria | Private Limited Company | Public Limited Company |
|---|---|---|
| Minimum Shareholders | 1 | 7 |
| Maximum Shareholders | 101 | Unlimited |
| Public Share Offering | Not allowed | Allowed |
| Listing Eligibility | No | Yes |
| Regulatory Oversight | Moderate | High |
| Suitable for Foreign Subsidiary | Highly suitable | Rarely preferred |
| Compliance Burden | Lower | Higher |
| Governance Structure | Flexible | Formal board governance |
Insight:
For 90% of foreign entrants, a private company offers better control, lower compliance cost, and faster setup.
Foreign companies entering Nepal usually prioritize:
A private limited company aligns with these goals.
Public companies make sense only if:
Here is the standard incorporation roadmap:
Submit proposed name to OCR.
Approval typically takes 1–3 working days.
Prepare:
Under FITTA 2019:
Submit to OCR:
Register for:
Under the Income Tax Act 2002, corporate tax is generally 25%, unless sector-specific incentives apply.
Inject approved foreign capital through formal banking channels to ensure repatriation eligibility.
Public companies face more regulatory scrutiny.
Under the Income Tax Act 2002:
Repatriation is permitted under FITTA 2019, subject to documentation and tax clearance.
Foreign investors must ensure:
Private companies allow:
Public companies require:
For strategic FDI structures, governance flexibility is often critical.
Your company type affects:
Structure decisions are hard to reverse.
That is why expert planning matters.
Consider public structure if:
Otherwise, private remains optimal.
Each mistake creates downstream friction.
For most foreign investors, private limited companies are better. They offer flexibility, lower compliance burden, and easier management control.
Yes, subject to sectoral restrictions under FITTA 2019. Many sectors permit full foreign ownership.
Nepal does not impose a universal minimum capital. However, FDI thresholds apply for foreign investors.
Yes. Conversion is allowed under the Companies Act 2006. Additional compliance requirements must be met.
Typically 7–15 working days, depending on FDI approval complexity.
Choosing between a Private vs public company in Nepal is not merely administrative. It defines governance, taxation, control, and scalability.
For most foreign companies entering Nepal, a private limited structure provides:
However, capital-intensive projects may require public structuring.
If you are planning to register a company in Nepal, get the structure right from day one.