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.
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.
Foreign companies can choose from the following structures:
Private Limited Company
Public Limited Company
Branch Office
Liaison (Representative) Office
Joint Venture Company
Non-Profit / Not-for-Profit Company
Sole Proprietorship and Partnership (limited foreign use)
Each option serves a different business objective. The sections below explain them in detail.
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.
Separate legal personality
Limited liability for shareholders
Can be 100 percent foreign-owned (subject to sector approval)
Eligible for profit repatriation
There is no universal minimum capital. However, under FITTA, foreign investment approvals often start from NPR 20 million, depending on sector and activity.
Outsourcing and captive centers
Tech, IT, and service companies
Manufacturing and trading businesses
Long-term Nepal operations
Full operational freedom
Ability to hire local and foreign staff
Eligible for tax incentives
Easier banking and contracts
Higher compliance than representative offices
Annual audits and filings mandatory
A Public Limited Company can raise capital from the public and must meet stricter governance requirements.
Minimum seven shareholders
Higher disclosure and audit requirements
Suitable for large-scale enterprises
The minimum paid-up capital is significantly higher than a private company and depends on sector regulations.
Large infrastructure projects
Banking, insurance, and hydropower
Businesses planning public fundraising
Most foreign SMEs do not require this structure. It is relevant only for capital-intensive ventures.
A Branch Office is an extension of a foreign parent company, not a separate legal entity.
Revenue-generating operations
Execution of parent company contracts
Project-based work
Branch Offices require approval from the relevant ministry and Nepal Rastra Bank.
Engineering and construction projects
Consulting firms with defined contracts
Companies testing Nepal before incorporation
Parent company bears full liability
Cannot engage in activities beyond approved scope
A Liaison Office acts only as a communication and coordination arm of a foreign company.
Market research
Promotion and branding
Relationship management
No revenue generation
No commercial contracts
No invoicing in Nepal
Early-stage market exploration
Regulatory presence
Brand establishment
A Joint Venture combines foreign and Nepali ownership into a single company.
Foreign partner plus local partner
Shareholding defined by JV agreement
Local market expertise
Access to restricted sectors
Faster regulatory navigation
Partner alignment
Exit provisions
Governance control
Non-Profit Companies are registered for social, educational, or charitable purposes.
No dividend distribution
Funds must be reinvested in objectives
NGOs and INGOs
Research and educational institutions
These structures exist under Nepali law but are rarely suitable for foreign companies due to liability and foreign ownership restrictions.
| Structure | Separate Legal Entity | Can Earn Revenue | Foreign Ownership | Best Use Case |
|---|---|---|---|---|
| Private Limited | Yes | Yes | Up to 100% | Long-term operations |
| Public Limited | Yes | Yes | Allowed | Large projects |
| Branch Office | No | Yes | 100% parent | Contract execution |
| Liaison Office | No | No | 100% parent | Market entry |
| Joint Venture | Yes | Yes | Shared | Restricted sectors |
| Non-Profit | Yes | Limited | Allowed | Social impact |
Consider the following before deciding:
Business activity and sector
Revenue plans in Nepal
Time horizon
Compliance tolerance
Repatriation needs
Want to operate and earn? Choose a Private Limited Company
Testing the market? Choose a Liaison Office
Executing contracts? Choose a Branch Office
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.
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.
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.
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.
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.
A private limited company is the most common choice for foreign investors planning revenue-generating operations and long-term presence.
Yes, foreigners can own 100 percent of a private limited company in most permitted sectors under FITTA 2019.
A branch office can earn revenue and execute contracts. A liaison office cannot generate income and is limited to coordination activities.
There is no fixed minimum under company law, but foreign investment approvals often require sector-based thresholds.
Typically 2–4 weeks for incorporation, excluding foreign investment and banking approvals.