Understanding the private vs public company in Nepal decision is one of the most critical steps for foreign companies entering the market.
Nepal has quietly modernized its company registration systems, simplified approvals, and clarified foreign investment rules.
Today, foreign founders can register companies faster, submit documents digitally, and manage compliance with fewer physical visits. This makes choosing the right structure at the outset even more important.
This guide explains how private and public companies differ in Nepal, how digital registration works, and which structure best fits your expansion strategy.
Nepal’s business registration process is overseen by the Office of the Company Registrar (OCR).
Over the last decade, OCR has digitized key workflows:
Online name reservation
Electronic document filing
Digital certificate issuance
Centralized company records
Foreign companies now experience fewer bureaucratic delays compared to the past.
Online incorporation filings
PAN registration through tax portals
Electronic amendments and annual filings
Digital record verification for banks and regulators
This digital shift directly affects how private and public companies are formed and managed.
A private limited company is the most common structure for foreign investors entering Nepal.
Minimum shareholders: 1
Maximum shareholders: 101
Share transfer restrictions
No public share offering
Lower compliance burden
Private companies are governed by Nepal’s Companies Act 2006.
Private companies offer flexibility, speed, and confidentiality.
They are ideal for:
Market entry
Outsourcing operations
Service centers
Subsidiaries and joint ventures
Most foreign direct investment approvals align more easily with private company structures.
A public company is designed for larger enterprises planning capital market access.
Minimum shareholders: 7
No maximum shareholder limit
Can issue shares to the public
Mandatory board committees
Higher disclosure obligations
Public companies must comply with additional regulations issued by the Securities Board of Nepal (SEBON).
Public companies are suitable for:
Infrastructure projects
Banks and financial institutions
Hydropower and energy projects
Large-scale manufacturing
For most foreign entrants, public companies are a second-stage structure, not an entry vehicle.
| Aspect | Private Company | Public Company |
|---|---|---|
| Minimum shareholders | 1 | 7 |
| Public share issuance | Not allowed | Allowed |
| Compliance intensity | Moderate | High |
| Capital flexibility | High | Regulated |
| Ideal for foreigners | Yes | Rare initially |
This comparison highlights why private companies dominate foreign investment inflows.
Online name reservation at OCR
Digital submission of incorporation documents
Electronic certificate issuance
PAN registration for tax purposes
Bank account opening
Most steps can now be completed without repeated in-person visits.
Memorandum of Association
Articles of Association
Shareholder and director details
Passport copies for foreign nationals
Board resolutions
Digital submission significantly reduces turnaround time.
Foreign investment is regulated under Nepal’s Foreign Investment and Technology Transfer Act 2019 (FITTA).
Most FDI approvals favor private companies
Public companies face sector-specific caps
Capital repatriation is clearer under private structures
Exit is simpler with private share transfers
Foreign companies should align structure selection with FITTA compliance.
Annual filings via OCR portal
Digital tax submissions
Fewer board formalities
Simplified audit requirements
Mandatory disclosures to regulators
Shareholder meeting notices
Prospectus filings
Ongoing SEBON reporting
Digitization reduces paperwork, but public companies still face heavier scrutiny.
Both private and public companies are taxed under Nepal’s Income Tax Act 2002.
Corporate tax rates are similar
Public companies may face additional withholding obligations
Dividend declarations require stricter approvals in public companies
From a tax efficiency perspective, structure choice matters less than operational design.
Digital tools now support:
Electronic board resolutions
Online compliance calendars
Centralized statutory records
Remote audit coordination
These tools particularly benefit foreign shareholders managing operations remotely.
Are entering Nepal for the first time
Want faster setup and lower compliance
Need operational control
Plan to scale gradually
Need public capital
Operate in regulated sectors
Plan IPO or large infrastructure funding
For most foreign investors, the answer is clear.
Choosing public structure too early
Underestimating compliance costs
Ignoring digital filing timelines
Misaligning FDI approvals with structure
Avoiding these mistakes saves months of delays.
Foreign companies benefit from advisory partners who understand both law and digital systems.
DCV supports:
Structure selection strategy
End-to-end digital incorporation
FDI approval coordination
Ongoing compliance management
This reduces regulatory risk while accelerating market entry.
The private vs public company in Nepal decision shapes compliance, cost, and control.
With digital registration systems now firmly in place, private companies remain the most efficient entry vehicle for foreign businesses.
Choosing the right structure early prevents regulatory friction and supports long-term growth.