Entering Nepal’s market starts with one strategic decision: Private vs public company in Nepal.
For foreign companies, this choice shapes taxation, ownership control, capital raising, compliance costs, and exit strategy. It determines whether your Nepal entity becomes a tightly controlled subsidiary or a capital-raising vehicle open to investors.
This comprehensive handbook explains both structures under Nepal’s legal framework, primarily governed by the Companies Act 2006 and the Foreign Investment and Technology Transfer Act 2019 (FITTA).
If you are expanding into South Asia, this guide gives you clarity, compliance confidence, and a structured roadmap.
Choosing between a private and public company is not a formality.
It influences:
Nepal’s regulatory system is structured but formal. The Office of the Company Registrar (OCR) oversees company incorporation. The Department of Industry (DOI) approves foreign direct investment.
Your structure must align with both.
Under the Companies Act 2006, a private company:
It is the most common structure for foreign investors.
In practice, over 90% of FDI entities in Nepal register as private companies.
A public company:
Public companies fall under additional oversight from the Securities Board of Nepal (SEBON) if they issue shares publicly.
They are suitable for:
| Criteria | Private Company | Public Company |
|---|---|---|
| Minimum Shareholders | 1 | 7 |
| Maximum Shareholders | 200 | Unlimited |
| Minimum Directors | 1 | 3 |
| Public Share Offering | Not allowed | Allowed |
| Disclosure Requirements | Moderate | High |
| IPO Eligible | No | Yes |
| Regulatory Oversight | OCR + DOI (if FDI) | OCR + DOI + SEBON |
| Ideal For | Subsidiaries, SMEs, FDI vehicles | Large capital projects |
Insight:
For 95% of foreign market entrants, a private company offers optimal flexibility with controlled compliance exposure.
Foreign companies must comply with:
Each law impacts registration and operations.
Below is the structured registration roadmap.
Submit application to the Office of the Company Registrar.
Name approval usually takes 1–3 working days.
Required:
For FDI entities, board resolutions from the parent company are mandatory.
Foreign investors must obtain approval from the Department of Industry.
Documents include:
Approval timeline: 2–6 weeks.
Upon approval and submission, OCR issues:
Capital must be remitted via banking channels and verified by Nepal Rastra Bank.
Choose a private company if:
It is ideal for tech companies, consulting firms, manufacturing units, and outsourcing operations.
Choose a public company if:
Public structures suit power projects and large manufacturing zones.
Corporate income tax is governed by the Income Tax Act 2002.
Standard corporate tax rate: 25%
Certain industries qualify for reduced rates.
Dividend distribution is subject to withholding tax.
There is no structural tax difference between private and public companies.
However, public companies incur higher compliance costs.
Governance is stricter in public companies.
| Scenario | Best Structure |
|---|---|
| Internal group funding | Private |
| Venture capital | Private |
| IPO strategy | Public |
| Infrastructure financing | Public |
| Controlled FDI expansion | Private |
Foreign companies must consider:
A private company provides easier ring-fencing of risk.
Strategic structuring prevents regulatory friction later.
A private company restricts share transfer and limits shareholders to 200. A public company can offer shares to the public and has unlimited shareholders.
Yes. But it requires minimum seven shareholders and higher compliance. Most FDI investors choose private companies.
There is no fixed minimum capital for most sectors. However, FDI approval often requires a minimum threshold as per FITTA guidelines.
Private company registration typically takes 2–4 weeks including FDI approval.
Yes. Conversion is allowed under the Companies Act 2006 subject to regulatory approval.
If you are entering Nepal for operational expansion, outsourcing, manufacturing, or services, a private company is typically optimal.
If your model includes large-scale capital mobilization or IPO, then public structure makes sense.
Most international firms begin private and convert later.
The decision between Private vs public company in Nepal is strategic, not administrative.
It defines governance complexity, capital flexibility, and compliance exposure.
For most foreign investors, a private company delivers speed, control, and regulatory simplicity.
If you are evaluating Nepal market entry, our advisory team can structure your entity for compliance, tax efficiency, and long-term scalability.
Ready to register your company in Nepal?
Book a consultation today and receive a tailored incorporation roadmap aligned with your sector and investment size.