Essential Steps for Company Registration at Nepal's OCR

If you are a foreign investor planning to enter Nepal, choosing between a private vs public company in Nepal is one of the most critical early decisions. This choice affects ownership control, capital raising, compliance burden, and long-term scalability. It also determines how smoothly your company registration proceeds at Nepal’s regulator.

In this guide, we break down the essential steps for company registration at Nepal’s OCR, while clearly explaining how private and public companies differ. You will gain legal clarity, practical insight, and decision-ready guidance designed specifically for foreign companies.

Understanding the Company Registration Authority in Nepal

All companies in Nepal are registered with the Office of the Company Registrar (OCR). It operates under the Companies Act 2006, which governs incorporation, management, compliance, and dissolution.

For foreign companies, OCR registration is the legal birth of your Nepal entity. Banking, tax registration, employment, and regulatory approvals all depend on it.

Private vs Public Company in Nepal: The Core Legal Difference

At a high level, the distinction between a private and a public company in Nepal is about ownership structure and capital access.

Private Company in Nepal

A private company is the most common structure for foreign investors.

Key characteristics

• 1 to 101 shareholders

• No public share offering

• Share transfer restricted

• Faster incorporation and lower compliance

Public Company in Nepal

A public company is designed for large-scale capital raising.

Key characteristics

• Minimum 7 shareholders

• Can issue shares to the public

• Heavily regulated

• Suitable for IPOs and large infrastructure projects

Why the Private vs Public Company Choice Matters for Foreign Companies

Choosing the wrong structure can slow approvals, raise compliance costs, and limit operational flexibility.

Foreign companies usually prioritize:

• Control over ownership

• Predictable compliance

• Ease of capital structuring

• Faster time to market

For these reasons, over 90% of foreign investors in Nepal register private companies according to OCR filings and FDI approval trends.

Essential Steps for Company Registration at Nepal's OCR

Whether private or public, the OCR registration process follows a structured path.

Step 1: Name Reservation

You must reserve a unique company name with the OCR.

Key rules

• Name must not resemble existing entities

• English or Nepali allowed

• Certain regulated words require approval

Step 2: Decide the Company Type

This is where private vs public company in Nepal becomes legally binding.

You must declare:

• Company category

• Authorized capital

• Shareholding structure

Step 3: Draft Constitutional Documents

You must submit:

• Memorandum of Association (MOA)

• Articles of Association (AOA)

These define:

• Business objectives

• Share rights

• Governance rules

Step 4: Submit Incorporation Application

Applications are filed digitally with OCR.

Required documents include:

• Shareholder details

• Director identification

• Registered office address

• Capital structure

Step 5: Obtain Certificate of Incorporation

Once approved, OCR issues a Certificate of Incorporation, making your company legally operational.

Private vs Public Company in Nepal: Compliance Comparison

Insight: For foreign companies not planning an IPO, a public company structure often creates unnecessary regulatory exposure.

Capital Requirements and Foreign Investment Rules

Nepal allows foreign ownership under the Foreign Investment and Technology Transfer Act 2019 (FITTA).

Key capital points

• Minimum foreign investment threshold applies

• Capital must be remitted through approved banking channels

• OCR registration precedes FDI approval execution

Private companies provide greater flexibility in structuring foreign equity participation.

Tax and Regulatory Exposure Differences

Both private and public companies must register with the Inland Revenue Department (IRD) after OCR incorporation.

However:

• Public companies face stricter disclosure rules

• Audit and reporting obligations are heavier

• Regulatory scrutiny is higher

For foreign companies focused on operational efficiency, this matters significantly.

Employment and Operational Readiness

After OCR registration, companies must:

• Register for tax (PAN)

• Register with the Social Security Fund

• Comply with the Labour Act 2017

Private companies typically reach hiring readiness faster.

When Does a Public Company Make Sense in Nepal?

A public company may be appropriate if:

• You plan a Nepal IPO

• You require mass public fundraising

• You operate in regulated infrastructure sectors

For most foreign companies, these conditions do not apply at entry stage.

Practical Recommendation for Foreign Companies

If your goal is:

• Market entry

• Back-office operations

• Technology development

• Regional support services

A private company in Nepal is almost always the optimal structure.

You can later convert to a public company if business needs evolve.

Conclusion: Private vs Public Company in Nepal

The private vs public company in Nepal decision is not theoretical. It directly impacts cost, speed, compliance, and control.

For foreign companies, private companies deliver:

• Faster OCR approval

• Lower regulatory burden

• Greater ownership control

• Easier compliance management

Public companies serve a narrower purpose and are best reserved for advanced capital strategies.

If you want a compliant, scalable, and foreign-friendly entry into Nepal, start private and structure smart.

Frequently Asked Questions 

Is a private or public company better for foreign investors in Nepal?

A private company is usually better. It offers faster registration, lower compliance costs, and greater control for foreign shareholders.

How long does OCR registration take in Nepal?

Private company registration typically takes 7–15 working days if documents are complete and compliant.

Can a foreigner own 100% of a Nepal company?

Yes, subject to sector eligibility and FDI approval under FITTA 2019.

What is the minimum capital for a company in Nepal?

There is no fixed minimum for domestic companies. Foreign investment thresholds apply for FDI-based companies.

Can a private company convert into a public company later?

Yes. The Companies Act 2006 allows conversion with regulatory approval and compliance restructuring.