Different Types of Companies You Can Register in Nepal

If you are a foreign investor exploring South Asia, understanding the types of companies in Nepal is one of the first strategic decisions you must make. Nepal offers multiple legal structures for foreign companies, each with different compliance, investment, tax, and operational implications.

Choosing the wrong structure can delay approvals, restrict profit repatriation, or increase regulatory risk. Choosing the right one can unlock fast market entry, talent access, and long-term scalability.

This guide explains every major company type available in Nepal, with a clear foreign-investor lens. It is written for founders, CFOs, legal heads, and expansion teams evaluating Nepal for outsourcing, market entry, or regional operations.

Legal Framework Governing Company Types in Nepal

All company structures in Nepal operate under a defined legal and regulatory framework. The most relevant instruments for foreign companies include:

• Companies Act 2006

• Foreign Investment and Technology Transfer Act 2019

• Office of the Company Registrar

• Nepal Rastra Bank

• Industrial Enterprises Act 2020

These laws define who can invest, what structures are allowed, capital thresholds, reporting obligations, and repatriation rules.

High-Level Overview: Types of Companies in Nepal

Foreign companies can choose from the following structures:

1. Private Limited Company

2. Public Limited Company

3. Branch Office

4. Liaison (Representative) Office

5. Joint Venture Company

6. Non-Profit / Not-for-Profit Company

7. Sole Proprietorship and Partnership (limited foreign use)

Each option serves a different business objective. The sections below explain them in detail.

Private Limited Company in Nepal (Most Popular Option)

What Is a Private Limited Company?

A Private Limited Company is the most commonly used structure by foreign investors. It is a separate legal entity registered in Nepal, capable of conducting full commercial operations.

Key Features

• Separate legal personality

• Limited liability for shareholders

• Can be 100 percent foreign-owned (subject to sector approval)

• Eligible for profit repatriation

Capital Requirements

There is no universal minimum capital. However, under FITTA, foreign investment approvals often start from NPR 20 million, depending on sector and activity.

Best For

• Outsourcing and captive centers

• Tech, IT, and service companies

• Manufacturing and trading businesses

• Long-term Nepal operations

Advantages

• Full operational freedom

• Ability to hire local and foreign staff

• Eligible for tax incentives

• Easier banking and contracts

Limitations

• Higher compliance than representative offices

• Annual audits and filings mandatory

Public Limited Company in Nepal

What Is a Public Limited Company?

A Public Limited Company can raise capital from the public and must meet stricter governance requirements.

Key Features

• Minimum seven shareholders

• Higher disclosure and audit requirements

• Suitable for large-scale enterprises

Capital Threshold

The minimum paid-up capital is significantly higher than a private company and depends on sector regulations.

Best For

• Large infrastructure projects

• Banking, insurance, and hydropower

• Businesses planning public fundraising

Foreign Investor Insight

Most foreign SMEs do not require this structure. It is relevant only for capital-intensive ventures.

Branch Office in Nepal

What Is a Branch Office?

A Branch Office is an extension of a foreign parent company, not a separate legal entity.

Permitted Activities

• Revenue-generating operations

• Execution of parent company contracts

• Project-based work

Regulatory Approval

Branch Offices require approval from the relevant ministry and Nepal Rastra Bank.

Best For

• Engineering and construction projects

• Consulting firms with defined contracts

• Companies testing Nepal before incorporation

Key Limitation

• Parent company bears full liability

• Cannot engage in activities beyond approved scope

Liaison (Representative) Office in Nepal

What Is a Liaison Office?

A Liaison Office acts only as a communication and coordination arm of a foreign company.

Permitted Activities

• Market research

• Promotion and branding

• Relationship management

What It Cannot Do

• No revenue generation

• No commercial contracts

• No invoicing in Nepal

Best For

• Early-stage market exploration

• Regulatory presence

• Brand establishment

Joint Venture Company in Nepal

What Is a Joint Venture?

A Joint Venture combines foreign and Nepali ownership into a single company.

Ownership Structure

• Foreign partner plus local partner

• Shareholding defined by JV agreement

Why Choose a JV?

• Local market expertise

• Access to restricted sectors

• Faster regulatory navigation

Risks to Manage

• Partner alignment

• Exit provisions

• Governance control

Non-Profit Company in Nepal

Overview

Non-Profit Companies are registered for social, educational, or charitable purposes.

Key Restrictions

• No dividend distribution

• Funds must be reinvested in objectives

Best For

• NGOs and INGOs

• Research and educational institutions

Sole Proprietorship and Partnership

These structures exist under Nepali law but are rarely suitable for foreign companies due to liability and foreign ownership restrictions.

Comparison Table: Types of Companies in Nepal

How to Choose the Right Company Type in Nepal

Consider the following before deciding:

• Business activity and sector

• Revenue plans in Nepal

• Time horizon

• Compliance tolerance

• Repatriation needs

Simple Rule of Thumb

• Want to operate and earn? Choose a Private Limited Company

• Testing the market? Choose a Liaison Office

• Executing contracts? Choose a Branch Office

Tax and Compliance Snapshot

Most operating companies in Nepal must comply with:

• Corporate income tax

• VAT registration (if applicable)

• Social Security Fund contributions

• Annual audit and filings

Tax rates vary by sector and incentives.

Common Mistakes Foreign Companies Make

• Choosing a liaison office when revenue is planned

• Underestimating approval timelines

• Ignoring repatriation structuring

• Not aligning entity choice with hiring plans

Avoiding these mistakes saves months of delay.

Why Nepal Is Gaining Popularity with Foreign Companies

Nepal offers:

• Competitive talent costs

• English-speaking workforce

• Strategic access to India and China

• Growing digital and service sectors

These advantages make choosing the right company structure even more critical.

Call to Action: Get Expert Help Choosing Your Company Type

Choosing among the types of companies in Nepal is not just a legal decision. It is a strategic one.

If you want clarity on the best structure for your business, book a consultation with our Nepal expansion specialists. We help foreign companies incorporate, invest, hire, and operate compliantly in Nepal.

Conclusion

Understanding the types of companies in Nepal empowers foreign investors to enter the market with confidence. From private limited companies to branch and liaison offices, Nepal provides flexible structures for different business goals.

The right structure reduces risk, accelerates approvals, and supports long-term growth. Make the choice deliberately and with expert guidance.

Frequently Asked Questions (People Also Ask)

What is the best company type in Nepal for foreign investors?

A private limited company is the most common choice for foreign investors planning revenue-generating operations and long-term presence.

Can foreigners own 100 percent of a Nepali company?

Yes, foreigners can own 100 percent of a private limited company in most permitted sectors under FITTA 2019.

What is the difference between a branch office and a liaison office?

A branch office can earn revenue and execute contracts. A liaison office cannot generate income and is limited to coordination activities.

Is minimum capital required to register a company in Nepal?

There is no fixed minimum under company law, but foreign investment approvals often require sector-based thresholds.

How long does company registration take in Nepal?

Typically 2–4 weeks for incorporation, excluding foreign investment and banking approvals.