Essential Steps for Registering Your Company in Nepal

If you’re a foreign company planning to enter Nepal, one of your first strategic decisions will be private vs public company structure. It may look like a legal checkbox. In reality, it shapes your capital requirements, FDI approval process, reporting obligations, and long-term growth flexibility.

I’ve worked with Australian, Indian, and Chinese investors entering Nepal. The biggest delays rarely come from paperwork. They come from choosing the wrong structure at the start.

This guide is built specifically for foreign companies. In this post, we’ll explain what “private vs public company” means in Nepal, why it matters for foreign investors, and walk you through the exact steps to register your company. You’ll also get practical compliance insights to help you avoid costly mistakes.

What Is Private vs Public Company, and Why Does It Matter?

Before registering your company, you must choose a structure under Nepal’s Companies Act, 2063 (2006).

Private Company in Nepal

A private company:

• Limits shareholders (1–101)
• Restricts share transfers
• Cannot invite the public to subscribe to shares
• Is easier to manage operationally

This is the most common structure for foreign investors entering Nepal through FDI.

Public Company in Nepal

A public company:

• Requires a minimum of 7 shareholders
• Can invite public share subscriptions
• Faces stricter disclosure and reporting requirements
• Is regulated more closely

This structure suits larger capital-intensive projects or companies planning public listings.

Why This Decision Matters for Foreign Companies

Choosing between private vs public company affects:

• FDI approval pathway
• Minimum capital structure
• Board composition
• Compliance cost
• Investor flexibility
• Exit strategy

For most foreign companies entering Nepal for the first time, a private limited company is the practical choice. But if you are entering infrastructure, hydropower, banking, or large-scale manufacturing, a public structure may be strategic.

Essential Steps for Registering Your Company in Nepal

Below is a practical, step-by-step breakdown designed specifically for foreign investors.

Step 1: Decide Private vs Public Company Structure

This is the foundation.

Ask yourself:

1. How many shareholders will we have?
2. Will we seek public investment in Nepal?
3. What industry are we entering?
4. What level of reporting can we handle?

Example:
An Australian tech company setting up a back-office support unit in Kathmandu typically chooses a private company.
A large hydropower consortium may opt for a public company structure.

Step 2: Obtain FDI Approval (If Applicable)

If foreign ownership is involved, you must obtain FDI approval under Nepal’s Foreign Investment framework.

Approval authorities include:

• Department of Industry (DOI)
• Investment Board Nepal (for large projects)

Key documents required:

• Board resolution from parent company
• Notarized constitutional documents
• Financial credibility documents
• Project proposal

FDI approval must be secured before company registration is finalized.

Step 3: Name Reservation with the Office of Company Registrar (OCR)

You must reserve your company name through Nepal’s Office of Company Registrar (OCR).

Tips:

• Ensure the name is unique.
• Avoid restricted industry words without approval.
• Prepare backup name options.

Approval usually takes a few working days.

Step 4: Draft Memorandum & Articles of Association

This step defines:

• Shareholding structure
• Business objectives
• Capital structure
• Director powers
• Governance framework

Foreign investors often underestimate this stage. Your objectives clause must align with your FDI approval. Any mismatch can cause compliance issues later.

Step 5: Company Registration with OCR

Submit:

• Approved name
• Memorandum & Articles
• FDI approval letter
• Shareholder documents
• Director details
• Registration fees

Once approved, you receive:

• Certificate of Incorporation
• Company registration number

This legally establishes your company in Nepal.

Step 6: PAN & Tax Registration

After incorporation:

• Register for Permanent Account Number (PAN)
• Register for VAT (if applicable)
• Open a corporate bank account

Corporate income tax in Nepal is generally 25%, though sector-specific rates may apply.

Step 7: Capital Injection Through Banking Channel

Foreign capital must be injected through official banking channels and reported to Nepal Rastra Bank (NRB).

Improper remittance structuring is one of the most common mistakes foreign investors make.

Step 8: Post-Registration Compliance

After registration, you must:

• Register employees under Social Security Fund (SSF)
• Maintain statutory registers
• File annual returns
• Conduct annual audit
• Hold board meetings as required

Compliance discipline is critical. Nepal’s regulatory framework is improving and becoming stricter.

Tips and Reminders for Private vs Public Company Registration

• Choose structure based on long-term strategy, not short-term simplicity.
• Align FDI approval with your company objectives.
• Draft clear shareholder agreements.
• Budget for compliance costs.
• Engage local legal and tax advisors early.

Common Mistakes Foreign Companies Make

• Registering first, seeking FDI approval later
• Choosing public structure without capital planning
• Underestimating tax compliance
• Improper capital remittance
• Weak governance documentation

Avoid these and your setup becomes significantly smoother.

FAQ: Private vs Public Company in Nepal

1. Which is better for foreign investors: private or public company in Nepal?

For most foreign investors, a private company is more practical. It has fewer compliance burdens and is easier to manage. Public companies are suitable for large-scale projects or public capital raising.

2. Is FDI approval mandatory before company registration?

Yes. If there is foreign ownership, FDI approval must be obtained before completing company registration. This is a critical compliance step.

3. What is the minimum capital required?

There is no universal minimum capital for most private companies. However, sector-specific regulations may apply. Public companies often require higher capital thresholds.

4. How long does company registration take in Nepal?

With proper documentation, the process can take 3–6 weeks. FDI approval timelines vary depending on project complexity.

5. Can a foreign company own 100% of a Nepal company?

Yes, in most sectors, 100% foreign ownership is allowed unless the sector is restricted under Nepal’s negative list.

Final Verdict: Private V.s Public Company

Understanding private vs public company structure is the foundation of successful company registration in Nepal. It impacts your FDI approval, governance model, compliance obligations, and long-term growth flexibility.

Nepal offers strong opportunities in technology, manufacturing, hydropower, outsourcing, and services. But structure and compliance discipline determine whether your entry is smooth or stressful.

Choosing wisely at the beginning saves years of regulatory friction.