If you are a foreign entrepreneur exploring South Asia, private vs public company in Nepal is one of the first and most strategic decisions you will face. Nepal has steadily positioned itself as a cost-efficient, regulation-friendly destination for foreign companies seeking market entry, outsourcing, or regional operations.
Yet, many foreign founders underestimate how much the choice of company structure affects approvals, timelines, compliance burden, capital planning, and long-term exit options. This guide is written specifically for foreign companies that want clarity, not legal jargon.
By the end, you will know exactly which structure fits your business goals—and how to move forward confidently.
Nepal’s corporate framework is governed primarily by the Companies Act, 2006, administered through the Office of the Company Registrar (OCR). Foreign investors may enter Nepal through several legal vehicles, but the most common comparison remains private vs public company in Nepal.
Private Limited Company (most common)
Public Limited Company (selective, capital-heavy)
Branch Office
Liaison / Representative Office
Foreign Direct Investment (FDI) company (usually private)
This article focuses on private vs public companies, because these are the only structures that allow full business operations in Nepal.
A private limited company in Nepal is the most widely used structure by foreign entrepreneurs.
Minimum shareholders: 1
Maximum shareholders: 50
Shares are not publicly traded
Capital contribution can be foreign-owned (subject to sector rules)
Suitable for profit-generating operations
Private companies offer speed, flexibility, and lower regulatory exposure. For foreign founders, this structure aligns well with Nepal’s Foreign Investment and Technology Transfer Act (FITTA), 2019.
A public limited company is designed for large-scale enterprises intending to raise capital from the public.
Minimum shareholders: 7
No upper limit on shareholders
Shares may be issued to the public
Mandatory regulatory oversight
Higher minimum capital requirements
Public companies in Nepal are common in banking, insurance, hydropower, telecom, and infrastructure sectors.
Private companies provide tighter ownership control. Public companies require broader governance and disclosure.
Public companies must commit significantly higher paid-up capital, especially in regulated sectors.
Public companies face stricter audits, disclosures, and reporting obligations.
| Factor | Private Company | Public Company |
|---|---|---|
| Minimum shareholders | 1 | 7 |
| Maximum shareholders | 50 | Unlimited |
| Public share issuance | Not allowed | Allowed |
| Regulatory burden | Moderate | High |
| Foreign investor suitability | Excellent | Limited |
| Typical setup timeline | 2–4 weeks | 2–4 months |
| Best for | SMEs, outsourcing, services | Banks, hydropower, large industry |
Insight: Over 85% of foreign-owned operating entities in Nepal choose the private company route, primarily due to speed and flexibility.
A private company is usually ideal if you:
Want full operational control
Plan to employ local staff
Intend to invoice clients
Are entering Nepal for services, IT, consulting, or outsourcing
Want a faster incorporation timeline
IT and software development
Mortgage and financial processing
Shared service centers
Consulting and professional services
Engineering and design offices
A public company may be suitable if you:
Require large-scale local capital
Operate in regulated infrastructure sectors
Plan to list shares or invite mass investors
Need enhanced public credibility
For most foreign entrepreneurs, a public company adds cost without adding value in the early stages.
Name reservation with OCR
Foreign investment approval (if applicable)
Company registration under Companies Act
Tax registration (PAN/VAT)
Bank account opening
Capital injection
Employment and payroll compliance
This streamlined process explains why the private vs public company in Nepal decision heavily favors private structures.
Annual audit
Annual return filing
Income tax compliance
Labor law compliance
Prospectus approval
Public disclosures
Board and committee requirements
Regulatory audits
Corporate tax rate: 25% (standard)
Withholding taxes apply on dividends and services
VAT registration mandatory above threshold
Nepal’s tax framework is transparent but procedural accuracy matters.
Foreign founders often focus on cost but overlook risk exposure.
Private companies reduce risk by:
Limiting shareholder liability
Reducing public scrutiny
Allowing faster restructuring or exit
Choosing public company “for credibility”
Underestimating compliance costs
Ignoring sector-specific restrictions
Misjudging capital repatriation rules
Avoiding these errors starts with understanding private vs public company in Nepal at a strategic level.
Yes, for most foreign entrepreneurs. Private companies offer faster setup, lower compliance, and better control.
Yes, in most permitted sectors, subject to foreign investment approval.
There is no universal minimum, but sector-specific thresholds may apply.
No. Public companies do not receive automatic tax advantages.
Private companies usually take 2–4 weeks. Public companies take longer.
For foreign entrepreneurs, the private vs public company in Nepal decision is rarely balanced. In practice, private limited companies are the clear winner for market entry, outsourcing, and service-based operations.
Public companies serve a purpose but only for capital-intensive, highly regulated industries.
If your goal is speed, flexibility, and compliance confidence, a private company is almost always the smarter first move.