Choosing between a private vs public company in Nepal is one of the first strategic decisions foreign companies must make.
This choice affects ownership control, capital structure, compliance burden, and long-term scalability.
Nepal welcomes foreign investment, but its corporate framework is rule-driven and document-heavy.
Understanding how private and public companies differ under Nepalese law helps investors avoid costly restructuring later.
This guide breaks it all down in plain English.
It is written specifically for foreign founders, CFOs, and expansion teams planning Nepal market entry.
Company registration in Nepal is governed primarily by the Companies Act 2006.
Foreign investment overlays are guided by the Foreign Investment and Technology Transfer Act 2019.
Key regulators include:
These laws define what a private company and a public company can and cannot do.
A private company in Nepal is the most common structure used by foreign investors.
Private companies are designed for closely held ownership and operational control.
Private companies are faster to register and easier to manage.
They are ideal for:
For most foreign firms, a private company is the default and safest entry structure.
A public company in Nepal is structured for capital raising and wider ownership.
Public companies are governed by stricter disclosure and governance rules.
For foreign companies, public companies are rarely used at entry stage.
| Criteria | Private Company in Nepal | Public Company in Nepal |
|---|---|---|
| Minimum shareholders | 1 | 7 |
| Maximum shareholders | 101 | Unlimited |
| Foreign ownership | Allowed (sector-based) | Allowed (regulated sectors) |
| Public share issuance | Not allowed | Allowed |
| Compliance burden | Moderate | High |
| Audit & disclosures | Standard | Extensive |
| Typical foreign use | Market entry, operations | Capital-intensive projects |
Insight:
Over 90% of foreign-owned companies in Nepal register as private companies due to simplicity and control.
Nepal does not impose a fixed minimum capital for all sectors.
However, foreign investment thresholds apply.
Capital must be:
Private and public companies follow the same capital inflow compliance, but public companies face more scrutiny.
Foreign founders usually prefer lean governance, making private companies more practical.
Both company types must comply with:
However, public companies must also:
This adds cost and administrative overhead.
From an income tax perspective:
The difference lies in compliance complexity, not tax rates.
Bottom line:
For most foreign companies, private vs public company in Nepal is not a real debate.
Private companies win on speed, control, and cost.
Avoiding these mistakes saves months of rework.
This process typically takes 4–8 weeks with proper documentation.
The private vs public company in Nepal decision shapes your entire investment journey.
For foreign companies, private companies offer speed, flexibility, and control.
Public companies serve a purpose, but only for specific, capital-intensive strategies.
If your goal is efficient Nepal market entry, start private and scale deliberately.
For most foreign investors, yes. Private companies are easier to manage and faster to register.
Yes, subject to sector-specific foreign investment rules and approvals.
There is no universal minimum, but regulated sectors impose higher thresholds.
Yes. Conversion is allowed but involves regulatory approvals and restructuring.
A private company is the preferred structure for initial entry and operations.