Company Registration in Nepal: Insights into the Office of Company Registrar

Choosing between a private vs public company in Nepal is one of the first strategic decisions foreign investors must make. This choice affects ownership control, compliance exposure, fundraising flexibility, and long-term scalability.

Nepal welcomes foreign investment. But its company law framework is formal and regulator-driven. Understanding how the Office of Company Registrar operates, and how company types are treated under law, is critical before entering the market.

This guide explains private vs public company in Nepal in practical terms. It is written specifically for foreign companies, founders, and boards evaluating Nepal as an expansion destination.

Nepal’s Corporate Regulatory Framework at a Glance

Company incorporation and oversight in Nepal fall under the authority of the Office of Company Registrar.

The OCR operates under the Companies Act, 2006, which governs:

• Company formation

• Capital structure

• Shareholding limits

• Ongoing compliance

• Director and shareholder obligations

Foreign investors must comply with both company law and foreign investment regulations. The company type selected determines the complexity of both.

What Is a Private Company in Nepal?

A private company in Nepal is the most commonly used structure for foreign-owned businesses.

Key Legal Characteristics

Under Nepal’s Companies Act:

• Shareholders: 1 to 101

• Share transfer: Restricted

• Public invitation to subscribe shares: Not allowed

• Name suffix: Private Limited (Pvt. Ltd.)

Why Foreign Companies Prefer Private Companies

Private companies offer:

• Strong control over ownership

• Lower disclosure requirements

• Faster registration with OCR

• Easier regulatory compliance

For most foreign investors, the private company structure aligns with operational reality in Nepal.

What Is a Public Company in Nepal?

A public company in Nepal is designed for large-scale capital mobilization.

Key Legal Characteristics

• Minimum shareholders: 7

• No upper limit on shareholders

• Public share issuance allowed

• Higher paid-up capital thresholds

• Mandatory governance and disclosures

• Name suffix: Limited (Ltd.)

Public companies are subject to heightened scrutiny from:

• Office of Company Registrar

• Securities regulators (if listed)

• Auditors and shareholders

Private vs Public Company in Nepal: Core Differences

1. Ownership and Control

Private companies allow founders and parent companies to retain tight ownership control.
Public companies dilute control due to open shareholding.

2. Capital Raising

Public companies can raise capital from the public.
Private companies rely on promoters, parent companies, or strategic investors.

3. Compliance Burden

Public companies face significantly higher:

• Reporting obligations

• Audit intensity

• Governance standards

Comparison Table: Private vs Public Company in Nepal

Original insight:
Over 90% of foreign-owned companies registered in Nepal choose the private company model due to compliance efficiency and control advantages.

Role of the Office of Company Registrar in Company Registration

The Office of Company Registrar is not just a filing authority. It actively reviews:

• Constitutional documents

• Capital structure

• Shareholding composition

• Foreign ownership disclosures

OCR approval is mandatory before any company can legally operate in Nepal.

OCR Responsibilities Include:

• Name reservation

• Incorporation approval

• Amendment filings

• Annual compliance monitoring

• Company strike-off for non-compliance

Company Registration Process in Nepal (Step-by-Step)

Foreign investors registering either a private or public company must follow a structured process.

1. Name Reservation

OCR verifies name availability and legal compliance.

2. Document Preparation

Includes:

• Memorandum of Association

• Articles of Association

• Shareholder and director details

3. OCR Filing and Review

OCR reviews submissions and may request clarifications.

4. Certificate of Incorporation

Issued upon approval.

Compliance Obligations: Private vs Public Company in Nepal

Ongoing Requirements for Private Companies

• Annual return filing

• Financial statements submission

• Board and shareholder records

Additional Requirements for Public Companies

• Enhanced audits

• Shareholder disclosures

• Governance reporting

• Regulatory filings if listed

Foreign companies often underestimate public company compliance costs in Nepal.

Tax and Regulatory Exposure Considerations

Company type affects regulatory exposure more than tax rates.

• Corporate tax rates are uniform.

• Compliance risk differs significantly.

• Public companies attract closer scrutiny from multiple regulators.

Private companies allow foreign investors to control exposure during early-stage operations.

When Does a Public Company Make Sense in Nepal?

A public company structure may be appropriate when:

1. Large-scale domestic fundraising is required.

2. Long-term listing on Nepal’s stock exchange is planned.

3. The business has significant local ownership.

For most foreign companies, these conditions are rare at market entry.

Common Mistakes Foreign Companies Make

Foreign investors often:

• Choose public companies prematurely

• Underestimate OCR scrutiny

• Ignore long-term compliance costs

• Misalign structure with actual operations

Strategic structuring at incorporation avoids costly restructuring later.

Practical Recommendation for Foreign Investors

For foreign companies entering Nepal, the optimal approach is usually:

• Start with a private company

• Maintain ownership control

• Limit compliance complexity

• Reassess structure as operations scale

Public company conversion can be considered later if needed.

Conclusion: Private vs Public Company in Nepal

The decision between private vs public company in Nepal is not about ambition. It is about regulatory fit, control, and risk management.

For foreign investors, private companies provide:

• Faster OCR approvals

• Lower compliance burden

• Stronger ownership protection

• Greater operational flexibility

Understanding the OCR’s role and Nepal’s legal framework ensures a smoother market entry and sustainable growth.

Frequently Asked Questions 

Is a private company better than a public company in Nepal?

For most foreign investors, yes. Private companies offer lower compliance, faster registration, and stronger ownership control.

Can a foreigner own 100% of a private company in Nepal?

Yes. Subject to foreign investment approval requirements, full foreign ownership is permitted.

What is the minimum capital for a public company in Nepal?

Public companies are subject to higher minimum capital thresholds set by law and regulators.

Can a private company convert into a public company later?

Yes. Conversion is allowed but requires OCR approval and additional compliance.

Which company type is easier to manage in Nepal?

Private companies are significantly easier to manage, especially for foreign-owned businesses.