Private vs public company in Nepal is one of the first strategic decisions foreign investors face when entering the Nepali market. The choice affects ownership, capital raising, compliance, and long-term growth. This guide explains both structures clearly, walks you through company registration in Nepal, and lists key steps and documents required so you can move forward with confidence.
Nepal offers a stable legal framework, improving digital registration, and strong incentives for foreign investment. Choosing the right structure at the start saves time, cost, and regulatory friction later.
Company registration in Nepal is governed primarily by the Companies Act 2006 and administered by the Office of the Company Registrar. Foreign companies may register a private limited company or public limited company, subject to sectoral approvals and foreign investment rules.
Foreign companies typically register when they want to:
Hire local employees.
Open a Nepali bank account.
Sign contracts locally.
Invest capital or assets in Nepal.
Build long-term operations.
Understanding private vs public company in Nepal starts with legal capacity, ownership, and disclosure requirements.
A private company is the most common structure for foreign investors.
Key features
Minimum shareholders: 1
Maximum shareholders: 50
No public share offering
Lower compliance burden
This structure suits subsidiaries, outsourcing centers, and service companies.
A public company is designed for larger investments and public fundraising.
Key features
Minimum shareholders: 7
No maximum limit
Can issue shares to the public
Higher regulatory oversight
This structure fits infrastructure, banking, and large-scale manufacturing.
| Criteria | Private Company | Public Company |
|---|---|---|
| Minimum shareholders | 1 | 7 |
| Public share offering | Not allowed | Allowed |
| Compliance level | Moderate | High |
| Typical setup time | 15–25 days | 30–60 days |
| Best for | Subsidiaries, SMEs | Large investments |
| Board structure | Flexible | Mandatory governance |
| Capital raising | Private | Public and private |
Regardless of structure, the registration process follows a defined path.
Name reservation with the Office of the Company Registrar.
Preparation of incorporation documents.
Foreign investment approval if applicable.
Company registration certificate issuance.
Tax registration and local compliance setup.
Each step must align with sector-specific and foreign investment regulations.
Foreign investors must prepare precise documentation.
Passport copies of shareholders and directors.
Board resolution approving Nepal investment.
Proposed Memorandum of Association.
Articles of Association.
Registered office address in Nepal.
Power of attorney for local representative.
Certificate of incorporation from the parent company.
Notarized constitutional documents.
Investment approval letters.
Bank reference letters.
Missing or inconsistent documents cause delays.
Registering a company is only the beginning.
Annual returns filing.
Financial statement submission.
Tax filings and audits.
Shareholding updates.
Regulatory reporting.
Public companies face stricter disclosure and audit standards.
When evaluating private vs public company in Nepal, foreign companies should consider:
Investment size and growth plan.
Regulatory tolerance.
Capital raising needs.
Exit strategy.
Industry-specific rules.
For most foreign entrants, a private company offers speed and flexibility.
Choosing a public company without capital needs.
Underestimating compliance timelines.
Ignoring sector restrictions.
Using generic documents not aligned with Nepali law.
Delaying tax and regulatory registration.
Professional guidance reduces risk.
Nepal offers:
Competitive labor costs.
Strategic access to South Asia.
Improving digital governance.
Growing consumer market.
Clear foreign investment pathways.
With the right structure, Nepal can be a scalable base for regional growth.
For most foreign investors, a private company is better due to lower compliance, faster setup, and full ownership control.
Private companies usually take 15–25 working days. Public companies can take 30–60 days depending on approvals.
Yes, 100 percent foreign ownership is allowed in most permitted sectors, subject to approval.
Minimum capital depends on the industry and foreign investment regulations rather than company type alone.
Yes, a private company can convert into a public company by meeting legal and regulatory requirements.
Choosing between a private vs public company in Nepal defines how efficiently your business operates and grows. For most foreign companies, private limited companies offer the best balance of control, compliance, and scalability. With proper planning and professional support, company registration in Nepal can be smooth and predictable.