Choosing between a private vs public company in Nepal is one of the first strategic decisions foreign companies must make when entering the Nepali market. The choice affects registration cost, timeline, compliance burden, capital flexibility, and long-term scalability.
Nepal welcomes foreign investment, but its corporate framework is precise. Understanding fees and procedures upfront helps you avoid delays, rework, and unnecessary regulatory exposure. This guide breaks down the real costs, step-by-step procedures, and practical trade-offs so you can register the right entity the first time.
Nepal’s corporate framework is governed primarily by the Companies Act, which recognises two main company structures relevant to foreign investors.
A private limited company is the most common structure for foreign-owned businesses entering Nepal.
Key characteristics include restricted share transfers, a limited number of shareholders, and lower disclosure requirements.
A public limited company is designed for large-scale operations that intend to raise capital from the public or list securities in the future.
This structure carries higher capital thresholds, enhanced governance, and stricter regulatory oversight.
Understanding the legal distinction helps align your entity with business objectives.
Private company
Minimum shareholders: 1
Maximum shareholders: 101
Share transfers restricted
Public company
Minimum shareholders: 7
No maximum limit
Shares freely transferable
Private company
No statutory minimum paid-up capital under general law
Sector-specific thresholds may apply for foreign investment
Public company
Mandatory minimum paid-up capital
Higher capital required for regulated industries
This is where most foreign companies feel the impact.
Registration fees are calculated based on authorised capital and company type.
| Capital Slab (NPR) | Private Company Fee | Public Company Fee |
|---|---|---|
| Up to 100,000 | Lower tier fee | Not applicable |
| 100,001–1,000,000 | Moderate | Higher |
| Above 10 million | Incremental | Significantly higher |
Public companies pay materially higher registration and filing fees due to statutory scrutiny.
Private company
Memorandum of Association
Articles of Association
Shareholder and director details
Registered office lease
Public company
All private company documents
Prospectus or capital disclosure statements
Enhanced governance policies
Name reservation with the Office of Company Registrar
Preparation of incorporation documents
Capital declaration and fee payment
Certificate of incorporation issuance
Tax registration and local authority enrolment
The process is straightforward when documentation is prepared correctly.
Name reservation
Detailed constitutional drafting
Capital verification
Regulatory filings
Incorporation approval
Post-registration disclosures
Public company registration involves more checkpoints and longer review cycles.
Private company
Typical timeline: 2–4 weeks
Faster approvals
Fewer regulator touchpoints
Public company
Typical timeline: 6–10 weeks
Multi-layer review
Higher risk of clarification requests
Delays often arise from incomplete filings or misaligned capital structures.
Annual return filing
Financial statements
Tax compliance
Limited audit exposure
Statutory audits
Board and shareholder disclosures
Periodic regulator reporting
Higher professional fees
Over time, compliance costs for public companies can be several multiples higher.
For most foreign investors, private companies are significantly more cost-efficient.
They offer:
Lower setup fees
Faster market entry
Flexible ownership structures
Reduced disclosure obligations
Public companies are justified only when capital raising or large-scale public participation is planned.
Some industries impose additional rules regardless of company type.
These include:
Banking and financial services
Energy and hydropower
Telecommunications
Infrastructure projects
In such cases, capital thresholds and approval requirements override general company law.
Test the Nepali market
Operate a subsidiary or captive unit
Provide services or technology solutions
Maintain operational control
Raise capital locally
Invite public shareholders
Scale nationally at speed
Prepare for future listings
Avoid these costly errors.
Over-structuring too early
Choosing public status without capital needs
Underestimating compliance costs
Ignoring sector-specific approvals
Early advisory support prevents restructuring later.
| Factor | Private Company | Public Company |
|---|---|---|
| Setup cost | Lower | Higher |
| Time to register | Faster | Slower |
| Compliance burden | Moderate | Heavy |
| Capital flexibility | High | Structured |
| Best for | Market entry | Capital raising |
Nepalese authorities prioritise substance over form. Companies must demonstrate:
Genuine operations
Clear capital sources
Proper governance
Ongoing compliance
Foreign investors benefit from local regulatory navigation expertise.
For most foreign investors, yes. Private companies are cheaper, faster, and easier to manage while meeting legal requirements.
Yes, subject to sector eligibility and foreign investment approval thresholds.
Public companies require higher statutory paid-up capital, varying by industry and regulatory authority.
Yes. Conversion is permitted but requires regulatory approval and restructuring.
Foreign subsidiaries overwhelmingly choose private limited companies for efficiency and control.
The private vs public company in Nepal decision shapes your cost base, risk profile, and growth path. For most foreign companies, private limited registration delivers the best balance of speed, compliance, and control.
Choosing the right structure at entry saves time, capital, and regulatory friction later.