If you are a foreign investor planning to enter Nepal, one question quietly shapes everything that follows: private vs public company in Nepal.
This decision affects ownership control, capital requirements, regulatory exposure, fundraising flexibility, and even how easily profits can be repatriated later.
Most foreign companies eventually discover that Nepal’s rules strongly favor one structure over the other. But understanding why requires more than surface-level definitions. This guide walks you through the legal, strategic, and practical realities of choosing the right company type in Nepal, step by step, with a clear foreign-investor lens.
For foreign companies, incorporation is not just a compliance step. It is a long-term structural commitment.
Choosing between a private limited company and a public limited company determines:
Many market entries fail not because Nepal is difficult, but because the wrong structure was chosen at the start.
Under Nepal’s Companies Act, foreign investors primarily choose between two structures.
A private company is the most common entry vehicle for foreign investors.
Key features:
A public company is designed for large-scale capital mobilization.
Key features:
Foreign companies must comply with multiple overlapping laws and regulators.
Primary legal instruments include:
Key regulators involved:
Private companies have no fixed statutory minimum capital.
Capital is typically aligned with the approved foreign investment amount.
Public companies must meet higher thresholds:
For foreign investors, this difference alone often decides the outcome.
Private company:
Public company:
Foreign companies rarely need unrestricted shareholder expansion in early-stage market entry.
Public companies face:
Private companies operate with leaner governance.
For foreign operators testing the market, simplicity matters.
This is where public companies shine.
Public companies can:
Private companies cannot invite public investment.
However, foreign investors usually fund Nepal operations through parent-company capital or internal funding.
| Dimension | Private Company | Public Company |
|---|---|---|
| Minimum capital | Flexible | NPR 10 million+ |
| Shareholders | 1–101 | 7+ |
| Share transfer | Restricted | Freely transferable |
| Public fundraising | Not allowed | Allowed |
| Compliance intensity | Moderate | High |
| Ideal for foreigners | Yes | Rarely |
| Exit complexity | Lower | Higher |
Insight:
For foreign companies entering Nepal as a cost center, back office, manufacturing unit, or services hub, private companies provide maximum control with minimum friction.
Foreign investors consistently gravitate toward private companies because they offer:
In practice, over 90 percent of foreign direct investment entities in Nepal are private limited companies, according to DOI approval trends.
A public company is justified only when:
Typical examples include:
For service-based foreign companies, public status usually adds cost without benefit.
Foreign investors must first obtain approval from the Department of Industry or Investment Board Nepal.
This includes:
The Office of Company Registrar handles:
Foreign capital must enter Nepal through approved banking channels.
NRB requires:
After incorporation:
Avoid these costly errors:
Early structural decisions are expensive to reverse later.
Profit repatriation is permitted for both structures, subject to:
However, private companies generally face fewer procedural delays due to simpler ownership and capital histories.
Both private and public companies are taxed identically on paper.
Key points:
The difference lies in compliance effort, not tax rate.
Private companies allow:
Public companies face:
Foreign investors planning optional exits should factor this early.
Ask these questions:
If you answer “yes” to control and flexibility, a private company is almost always the right choice.
For foreign investors, the private vs public company in Nepal decision is not theoretical. It directly affects control, cost, compliance, and exit outcomes.
In most cases, a private limited company offers the cleanest, safest, and most efficient entry into Nepal. Public companies serve a narrow purpose and should be used only when scale and public capital truly justify the complexity.
Choosing the right structure at the start is the quiet decision that determines everything.
Yes. Most foreign investors choose private companies due to lower capital requirements, simpler compliance, and stronger ownership control.
Yes. Full foreign ownership is allowed in most approved sectors, subject to DOI and FITTA compliance.
The general minimum is NPR 10 million, with higher requirements for regulated sectors.
Yes. Conversion is allowed but involves regulatory approvals, capital restructuring, and higher compliance.
Private companies are significantly easier to exit due to simpler governance and ownership structures.