Understanding the types of companies in Nepal is the first critical decision foreign startups must make before entering the Nepali market. Your company structure affects ownership, liability, taxation, compliance, profit repatriation, and long-term scalability.
Nepal has modernised its investment framework through the Companies Act 2006 and Foreign Investment and Technology Transfer Act (FITTA) 2019, making it increasingly attractive for foreign founders, tech startups, and service companies.
This guide provides a practical, founder-focused breakdown of company types in Nepal. It explains which structure fits which business goal and why.
Before diving into startups, it helps to understand how Nepal broadly classifies businesses.
Sole Proprietorship
Partnership Firm
Private Limited Company
Public Limited Company
Branch Office of a Foreign Company
Liaison (Representative) Office
Among these, foreign startups almost always choose company-based structures, not personal or partnership models.
Choosing the wrong company type can delay approvals or restrict growth.
Key impacts include:
Eligibility for foreign direct investment (FDI)
Ability to repatriate profits
Hiring local staff
Opening bank accounts
Compliance cost and timelines
Exit flexibility
For foreign founders, Private Limited Company, Branch Office, or Liaison Office are usually the only viable options.
A Private Limited Company (Pvt. Ltd.) is a separate legal entity registered with the Office of the Company Registrar under the Companies Act 2006.
It is the default choice for foreign startups.
Minimum shareholders: 1
Maximum shareholders: 101
100 percent foreign ownership allowed (sector-permitting)
Limited liability protection
Separate legal identity
Fully compliant with FITTA 2019
Enables profit repatriation
Suitable for scaling operations
Accepted by banks and regulators
Allows local and foreign directors
SaaS and tech startups
Outsourcing and IT services
Fintech and consulting firms
EdTech, HealthTech, and BPOs
A Public Limited Company (PLC) can raise capital from the public and has stricter governance rules.
Minimum shareholders: 7
No upper limit on shareholders
Mandatory compliance with SEBON for public issues
Higher paid-up capital requirements
For most foreign startups, no.
This structure suits:
Infrastructure projects
Banks and insurance companies
Large manufacturing ventures
A branch office is not a separate legal entity. It is an extension of the foreign parent company registered in Nepal.
100 percent foreign owned
Cannot issue shares locally
Activities limited to parent’s scope
Governed by parent company law
Contract-based projects
Engineering or EPC firms
Short- to medium-term operations
Restricted business activities
Higher scrutiny from regulators
Limited flexibility compared to Pvt. Ltd.
A liaison office acts only as a representative presence in Nepal.
Market research
Promotion and branding
Communication and coordination
Revenue generation
Issuing invoices
Signing commercial contracts
Early-stage startups testing the market
Companies exploring partnerships
Firms preparing for FDI later
Although legally recognised, these structures are not suitable for foreign startups.
Foreign ownership restrictions
Unlimited liability
No FITTA protection
Poor scalability
These models are mainly for small, local businesses.
| Criteria | Private Limited | Branch Office | Liaison Office |
|---|---|---|---|
| Foreign Ownership | Up to 100% | 100% | 100% |
| Separate Legal Entity | Yes | No | No |
| Revenue Allowed | Yes | Yes (limited) | No |
| Profit Repatriation | Yes | Yes | No |
| Startup Friendly | ⭐⭐⭐⭐⭐ | ⭐⭐⭐ | ⭐⭐ |
| Best For | Scaling startups | Project work | Market entry |
Private Limited Company is ideal. It supports IP ownership and local hiring.
Private Limited or Branch Office depending on contract structure.
Private Limited with FDI approval and industry-specific licenses.
Foreign startups should be aware of ongoing obligations:
Annual returns to OCR
Tax filings under the Income Tax Act 2002
Audit requirements
Labour Act and Social Security Fund compliance
NRB reporting for foreign remittances
FDI in Nepal is governed by the Foreign Investment and Technology Transfer Act 2019.
NPR 20 million (approx.) for most sectors
Legal protection for investors
Guaranteed profit repatriation
Access to dispute resolution mechanisms
Choosing a liaison office when revenue is planned
Underestimating compliance costs
Delaying FDI approval
Structuring shareholding incorrectly
Avoiding these mistakes saves months.
Ask yourself:
Will we generate revenue in Nepal?
Do we need local employees?
Is profit repatriation important?
Are we testing or scaling?
If the answer is “yes” to most, Private Limited Company is the best fit.
Foreign startups usually choose Private Limited Companies, Branch Offices, or Liaison Offices. Private Limited Companies are the most flexible.
Yes. Nepal allows 100 percent foreign ownership in many sectors under FITTA 2019.
For FDI, the minimum investment is typically NPR 20 million, subject to sector rules.
A branch office suits project-based work. Private Limited Companies are better for startups and scaling.
With proper documentation, registration usually takes 2–4 weeks, excluding FDI approval timelines.
Selecting the right types of companies in Nepal determines how smoothly your startup enters, operates, and scales. For most foreign founders, a Private Limited Company with FDI approval offers the best balance of control, compliance, and growth.
Nepal’s regulatory framework is investor-friendly when navigated correctly. The key is choosing the right structure from day one.
Planning to register a company or invest in Nepal?
👉 Book a free consultation to get a personalised structure recommendation, compliance roadmap, and FDI timeline tailored to your startup.