If you’re a foreign startup looking at Nepal as your next growth market, your first real decision isn’t about office space or hiring it’s about private vs public company structure.
This choice shapes your registration process, capital requirements, reporting obligations, foreign direct investment (FDI) approval, and even how banks and regulators view you. I’ve seen foreign founders delay market entry by months simply because they chose the wrong structure at the beginning.
This guide is designed specifically for foreign companies and startups entering Nepal. In this post, we’ll explain what private vs public company means under Nepali law, outline the step-by-step company registration process, clarify FDI considerations, and share practical insights to help you avoid costly delays.
By the end, you’ll know exactly how to move forward with confidence.
Under Nepal’s Companies Act, 2063 (2006), companies are broadly categorized into:
A privately held entity with restrictions on:
Most foreign startups choose this structure.
A company that:
Choosing between a private vs public company affects:
For example:
If you're an Australian tech startup opening a Nepal development center, a private company is usually ideal.
If you're planning large-scale capital raising in Nepal’s market, a public structure may make sense.
Most early-stage foreign businesses do not need a public company.
Let’s break the process down clearly.
Before filing anything, determine:
For 90% of foreign startups, a private limited company is the right structure.
If there is foreign investment involved, approval is required from:
You will need:
This step is critical. Many founders underestimate compliance here.
Submit proposed company name online.
Tips:
Approval typically takes a few days.
This includes:
For foreign companies, drafting must align with FDI approval documents.
Misalignment causes rejection.
Submit:
Once approved, you receive:
Register with Inland Revenue Department for:
Corporate Income Tax currently stands at 25% for most sectors.
After registration:
Without this step, repatriation later becomes complicated.
You must also:
Nepal compliance is straightforward — but strict.
Let’s say a Sydney-based SaaS company wants to open a Nepal engineering unit.
Recommended structure:
✔ Private Limited Company
✔ 100% foreign ownership
✔ FDI approval through DOI
✔ Capital injected through bank channel
Why not public company?
Because there is no need for public fundraising or local share offering.
Keep it simple. Scale later.
I’ve seen companies fix structural mistakes years later at significant cost. Getting it right on day one saves time and money.
These delays affect banking, hiring, and operations.
A private company limits shareholders (maximum 101) and cannot offer shares publicly. A public company can issue shares to the public and requires at least 7 shareholders with stricter compliance obligations.
Yes, in most sectors. However, FDI approval from the Department of Industry is required before registration.
With proper documentation, private company registration typically takes 2–4 weeks, including FDI approval.
Minimum FDI threshold generally starts from NPR 20 million (subject to sector regulations).
Yes. A private company can be converted into a public company by meeting shareholder and compliance requirements under the Companies Act.
Understanding private vs public company structure is the foundation of a successful Nepal market entry.
For foreign startups, the right structure reduces regulatory friction, accelerates bank approvals, simplifies compliance, and protects long-term growth plans.
Nepal offers tremendous opportunity — but only if your foundation is built correctly.
If you’re a foreign startup planning to register a company in Nepal, don’t navigate the process alone.
Book a consultation with our Nepal market-entry specialists.
We’ll guide you through:
Start strong. Expand confidently.