Choosing between a private vs public company in Nepal is one of the most strategic decisions a foreign investor will make. It shapes control, compliance, capital raising, and exit options. Nepal welcomes foreign direct investment, but its corporate framework is precise. Understanding how private and public companies differ helps you avoid delays, regulatory friction, and unnecessary costs.
This guide is written for foreign companies planning market entry, back-office operations, or long-term expansion in Nepal. It breaks down the legal structure, compliance burden, governance, and real-world use cases so you can decide with confidence.
Nepal’s company law is primarily governed by the Companies Act, 2006, supported by foreign investment rules under FITTA 2019 and sector-specific regulations. Companies are registered with the Office of the Company Registrar.
For foreign companies, the most common incorporation routes are:
Both are separate legal entities. Both allow foreign shareholding, subject to sector approval. Their practical implications, however, differ significantly.
A private company in Nepal is designed for closely held ownership. It is the most popular structure for foreign investors entering Nepal.
Private companies are ideal for foreign subsidiaries, joint ventures, and back-office operations.
Foreign companies usually choose a private company when:
A public company in Nepal is designed for large-scale operations with broader ownership and public capital participation.
Public companies are often used by banks, insurance firms, hydropower projects, and large infrastructure ventures.
A public company structure fits when:
Private companies offer concentrated ownership. Public companies dilute control but enable scale.
Public companies face heavier reporting, audits, and regulator oversight.
Private companies rely on internal funding. Public companies can raise capital from the public.
| Aspect | Private Company in Nepal | Public Company in Nepal |
|---|---|---|
| Minimum shareholders | 1 | 7 |
| Maximum shareholders | 101 | Unlimited |
| Public share issue | Not allowed | Allowed |
| Foreign ownership | Allowed (sector-based) | Allowed (sector-based) |
| Paid-up capital | Flexible | Higher statutory minimum |
| Compliance burden | Moderate | High |
| Audit requirements | Annual audit | Enhanced audits and disclosures |
| Best for foreign companies | Subsidiaries, JVs, back-office | Infrastructure, finance, large projects |
Foreign investors follow a structured registration path. While the steps apply to both private and public companies, approvals and timelines differ.
Foreign investors require approval under foreign investment rules.
Key documents include:
Both private and public companies are subject to:
Public companies face additional disclosure and reporting obligations.
Foreign investors often underestimate compliance intensity. Avoid these pitfalls:
Strategic structuring at entry prevents future restructuring costs.
Use this practical checklist:
For most foreign companies, a private company is the right starting point.
Many successful foreign investors adopt a phased approach:
This reduces risk while preserving flexibility.
Nepal offers:
When paired with the right company structure, Nepal becomes a sustainable expansion base.
Choosing between a private vs public company in Nepal is not a legal formality. It is a strategic investment decision. Private companies offer speed, control, and flexibility. Public companies offer scale, visibility, and capital access.
For most foreign companies entering Nepal, a private company is the optimal launchpad. With proper planning, it can evolve into a public entity when growth demands.
Ready to structure your Nepal entry the right way? Speak with an expert before you incorporate and avoid costly restructuring later.
For most foreign companies, yes. Private companies offer lower compliance, faster setup, and better control.
Yes, in permitted sectors, foreign investors can own up to 100 percent.
There is no fixed minimum. Capital depends on the approved investment proposal.
Yes. Conversion is permitted under Nepal company law, subject to conditions.
Typically 4–8 weeks, depending on approvals and documentation readiness.