Company registration in Nepal is your gateway to a fast-growing market. The decision between a private limited and a public limited shapes cost, control, and compliance. This guide helps foreign companies choose the right structure. It uses plain language. It also cites Nepal’s core company and investment rules. You will learn practical steps, timelines, and mistakes to avoid.
Nepal recognizes multiple business forms. Foreign investors mostly pick one of two forms.
Private limited company (PLC).
Public limited company (PLC-Public).
Both create a separate legal entity. Both limit owner liability. They differ on capital raising, governance, and disclosure. Your growth plan should guide the choice.
What it is. A limited liability company that does not invite the public to invest.
Who uses it. Most foreign subsidiaries and JV vehicles.
Shareholders. Minimum one. Maximum one hundred and one.
Directors. Minimum one.
Capital. No universal minimum under company law. Sector rules may set floors.
Share transfers. Restricted by the Articles. Pre-emptive rights are common.
Fund-raising. Private placements only. No public offer or listing.
Compliance load. Moderate. Annual filings and audit apply.
Pros
Fast to incorporate and operate.
High control and privacy.
Flexible shareholder agreements.
Cons
Cannot raise capital from the public.
Transfer restrictions reduce liquidity.
Harder to signal scale to institutional investors.
What it is. A limited liability company that may invite public investment.
Who uses it. Banks, insurers, large manufacturers, and scale-ups.
Shareholders. Minimum seven promoters at formation.
Directors. Minimum three directors.
Capital. Often higher due to sector norms. Some sectors mandate floors.
Share transfers. Freer transfer unless restricted by law or listing rules.
Fund-raising. May issue shares, debentures, and list securities.
Compliance load. High. Prospectus, governance, and disclosure obligations apply.
Pros
Access to public capital markets.
Improved brand and governance signal.
Wider investor base and liquidity.
Cons
Longer setup and higher costs.
Stricter disclosure and audits.
Board and committee requirements.
| Dimension | Private Limited | Public Limited | Why it matters |
|---|---|---|---|
| Investors | 1–101 shareholders | 7+ promoters; unlimited shareholders | Defines capital strategy and cap table design |
| Public offer | Not allowed | Allowed with approved prospectus | Impacts speed to raise large capital |
| Listing option | Not allowed | Possible (if eligible) | Improves liquidity and valuation discovery |
| Board size | ≥1 director | ≥3 directors | Affects governance and decision speed |
| Company Secretary | Not mandatory by law for all | Mandatory for public companies | Adds governance cost and rigor |
| Share transfer | Restricted by Articles | Freer transferability | Influences exit options and ESOP design |
| Audit | Annual audit required | Annual audit plus higher oversight | Raises compliance time and fees |
| AGM | Required annually | Required with stricter timing rules | Drives investor relations cadence |
| Disclosure | Limited public disclosure | Broader disclosure to investors and regulators | Impacts confidentiality and brand trust |
| Time-to-market | Faster | Longer (offers, approvals, listing) | Affects launch date and hiring plan |
| Best for | Wholly-owned subsidiaries, JVs, SME ops | Capital-intensive sectors and scale-ups | Aligns with funding and sector realities |
| Dilution risk | Lower in early stages | Higher with public issuance | Affects control and founder economics |
| Compliance intensity | Moderate | High | Determines internal legal resources |
Note: Sector regulators may override baseline rules. Always check sector-specific directives.
You will see these names across the process. These are the core sources practitioners use daily.
Companies Act, 2063 (2006) and amendments.
Foreign Investment and Technology Transfer Act, 2019 (FITTA) and directives.
Industrial Enterprises Act for sector incentives and classifications.
Inland Revenue laws: Income Tax Act and VAT Act for PAN/VAT.
Labour Act, 2017 and Social Security Act for HR compliance.
Securities laws and SEBON regulations for public offers.
Nepal Rastra Bank foreign exchange directives for equity inflows and repatriation.
Office of the Company Registrar (OCR) for incorporation and filings.
Department of Industry (DOI) / Investment Board Nepal (IBN) for FDI approvals.
Why this matters. These frameworks set eligibility, filings, timelines, and penalties. They also define what “good standing” means in Nepal.
Follow this sequence to avoid rework and penalties.
Decide private vs public at the strategy level. Map headcount, revenue, and funding for 24–36 months. Align sector licenses early.
Reserve a compliant name with OCR. Draft the Memorandum and Articles. Bake in FDI, share classes, and transfer rules. Align founder and investor rights.
Apply to DOI or IBN based on threshold and sector. Provide the investment plan, ownership chart, and KYC. Approval precedes capital inflow and registration.
File charter documents and approvals. Appoint directors and a registered office. Obtain the certificate of incorporation.
Secure PAN and VAT (if required). Enroll for TDS withholding. Set up e-filing. Map your HS codes if importing goods.
Open a foreign currency account. Remit capital as equity, not as a loan, unless approved. Maintain bank advice and FDI evidence for repatriation.
Adopt board resolutions and registers. Appoint the auditor. Issue share certificates. File beneficial ownership if applicable. Prepare HR policies and payroll setup.
Consider a private limited if these statements are true:
You need speed and confidentiality.
You will fund operations through the parent or a small JV.
You prefer tight transfer controls and founder rights.
You do not plan a public capital raise in the near term.
Your sector does not push you toward public status.
This path suits foreign subsidiaries, service centers, and pilot manufacturing. It keeps the cap table simple. It reduces governance overhead.
Consider a public limited if these apply:
You plan to raise from the public or list in Nepal.
Your sector expects public status or higher transparency.
You want a broader shareholder base and liquidity.
You accept heavier governance and disclosure.
This path suits banks, insurers, and capital-intensive growth plays. It can also fit local champions seeking brand lift and employee liquidity.
Private limited companies have flexible boards. Many run with one or two directors. Committees are optional unless sector rules require them.
Public limited companies must seat at least three directors. A Company Secretary is mandatory. Committees like Audit are expected. Listed entities add more layers. Expect formal minutes, calendars, and disclosures.
Private companies raise capital from existing owners or selected persons. They cannot invite the public to subscribe. Debenture issuance is limited and must follow company law.
Public companies can issue shares and debentures to the public. They must file a prospectus and comply with SEBON rules. Listing brings ongoing reporting and insider trading controls.
Private companies restrict transfers via the Articles. They often include rights of first refusal and drag-along clauses. These protect control and alignment.
Public companies offer simpler exits. Transfers are easier. Liquidity improves if listed. Insider rules and blackout windows may apply.
PAN is mandatory for all companies.
VAT applies above the statutory turnover threshold or by sector.
Withholding tax applies to salaries, services, rent, and certain payments.
Audit is required for all companies each fiscal year.
Transfer pricing rules apply to related-party cross-border transactions.
Permanent establishment concepts matter for the parent.
Repatriation of dividends requires tax clearance and FDI evidence.
Plan your chart of accounts before go-live. Align intercompany services and royalty policies with Nepal tax law.
Written employment contracts are standard.
Working hours, leave, and overtime follow the Labour Act.
Social Security Fund registration is required for covered employers.
Payroll taxes and contributions must be deposited on time.
Maintain grievance and safety policies.
Public companies usually adopt more formal HR governance. Private companies should still document policies early.
These are practical ranges from recent projects. Your sector and approvals can shift timelines.
Private limited: 3–6 weeks from FDI approval to go-live.
Public limited: 10–16 weeks for incorporation; more for public offer and listing.
Major cost drivers: legal drafting, translation, paid-up capital norms, sector approvals, audit, and governance staffing.
Note: Investment thresholds and regulator processing times can change. Always confirm current thresholds and calendars before filing.
Define structure and shareholding.
Map sector approvals and incentives.
Reserve the name with OCR.
Draft MoA/AoA and shareholders’ agreement.
Obtain FDI approval from DOI or IBN.
Incorporate the company at OCR.
Open bank accounts and remit equity.
Register for PAN and VAT.
Appoint auditor and adopt statutory registers.
Hire staff and enroll with Social Security.
Start operations with compliant invoicing.
File annual returns and financial statements.
Using a private limited but planning an early public raise.
Remitting funds as a loan without prior approval.
Missing VAT registration despite sector triggers.
Delaying auditor appointment and registers.
Copy-pasting Articles without FDI clauses and transfer rules.
Ignoring transfer pricing and intercompany pricing files.
Overlooking labour and Social Security onboarding.
Companies Act, 2063 (2006) defines private and public companies. It sets board minimums, AGMs, audits, and disclosure duties.
FITTA, 2019 governs foreign investment approvals. It covers equity inflows, technology transfer, and repatriation.
SEBON Regulations govern public offers, prospectus content, and investor protection.
Nepal Rastra Bank directives regulate foreign exchange, capital remittance, and dividend repatriation.
Income Tax and VAT laws set PAN/VAT rules, withholding, and filings.
Labour and Social Security laws define contracts, benefits, and employer duties.
Use the latest consolidated versions and any ministerial notices. Thresholds and forms may update year to year.
Ask these questions and score “Yes” or “No.”
Do you need public capital within 12–24 months?
Does your sector nudge you to public status?
Will broader investor liquidity lift valuation?
Can you support a Company Secretary and committees?
Do you want a signaling effect with customers and banks?
Mostly “Yes”? Consider a public limited.
Mostly “No”? A private limited likely fits.
Global SaaS vendor opening a Nepal dev center.
Private limited wins. Speed and control matter more than public capital.
Consumer bank entering Nepal.
Public limited is common. Sector rules and deposit taking require public status.
Industrial JV with gradual expansion.
Start as private limited. Convert to public when raising at scale.
A private limited can convert to a public limited. You must amend the charter and expand shareholders and board. Prospectus and SEBON rules apply before any public offer. Plan conversion milestones early to avoid downtime.
1) What is the minimum capital to register a company in Nepal?
There is no universal minimum in the Companies Act. Sector regulators may set floors. Foreign investment thresholds also apply under FITTA and directives.
2) Can a foreigner own 100% of a private limited in Nepal?
Yes, unless the sector is restricted. You need FDI approval and compliant equity remittance through a Nepal bank.
3) How long does private company registration take?
Typical projects complete in three to six weeks after FDI approval. Sector approvals and documentation quality affect timing.
4) When should I choose a public limited structure?
Choose public limited if you plan a public offer or listing. It also suits sectors that expect higher governance standards.
5) Are audits mandatory in Nepal?
Yes. All companies require annual statutory audits. Public companies face additional oversight and disclosure.