If you are evaluating private vs public company in Nepal, you are already asking the right strategic question. The structure you choose will determine control, taxation, reporting obligations, capital raising ability, and long-term exit flexibility.
Nepal is positioning itself as a competitive South Asian investment destination. Reforms under the Foreign Investment and Technology Transfer Act (FITTA 2019) and the Industrial Enterprises Act have simplified foreign ownership. Company formation is governed by the Companies Act, while taxation falls under the Income Tax Act.
But the real question for foreign companies is not just legal compliance.
It is strategic positioning.
This guide explains the differences, legal framework, tax exposure, compliance burden, and decision matrix for 2026 investors entering Nepal.
Your company type determines:
In Nepal, foreign investors typically choose between:
Each has different implications under Nepalese corporate law.
Foreign investors must navigate four key legal pillars:
Regulatory authorities include:
NRB approval is required for foreign capital inflow and repatriation.
A Private Limited Company is the most common structure for foreign investors.
Foreign investors often prefer this structure for:
It offers tighter control and simpler compliance.
A Public Limited Company is designed for larger ventures.
Public companies are regulated more strictly. If listed, they must comply with securities laws overseen by the Securities Board of Nepal.
This structure suits:
Below is a strategic comparison designed specifically for foreign companies.
| Criteria | Private Limited | Public Limited |
|---|---|---|
| Minimum Shareholders | 1 | 7 |
| Maximum Shareholders | 101 | Unlimited |
| Public Share Offering | Not Allowed | Allowed |
| Compliance Burden | Moderate | High |
| Capital Raising | Limited to private funding | Public + institutional funding |
| Governance | Flexible | Strict |
| Ideal For | Foreign subsidiaries | Large domestic-facing ventures |
| IPO Eligibility | No | Yes |
If your goal is operational efficiency and control, choose private.
If your goal is capital scale and market credibility, choose public.
Foreign investors must follow a structured process:
Under FITTA 2019, minimum foreign investment thresholds apply (subject to updates).
Corporate income tax in Nepal generally stands at 25% for most industries.
Certain industries enjoy incentives.
The Industrial Enterprises Act 2020 provides:
Public companies do not enjoy automatic tax advantages solely due to structure.
Tax exposure depends on activity, not structure.
Compliance cost for public companies is significantly higher.
Foreign investors often prioritize governance control.
Private companies allow:
Public companies require:
For most foreign subsidiaries, private structure is safer and more flexible.
Consider public structure if:
Otherwise, private structure remains optimal.
Choosing the wrong structure can create:
Private companies reduce public exposure and protect strategic control.
Public companies increase transparency and funding potential.
Private limited is ideal.
Allows foreign ownership and operational control.
Private initially.
Convert to public if expansion demands capital.
Public company often required due to scale.
Under FITTA 2019:
Repatriation includes:
| Cost Area | Private | Public |
|---|---|---|
| Registration | Lower | Higher |
| Legal Advisory | Moderate | High |
| Annual Compliance | Moderate | High |
| Audit Complexity | Standard | Extensive |
| Reporting | Annual | Quarterly + Annual |
Public companies face higher professional fees.
Private companies allow:
Public companies allow:
Exit strategy should influence your structure choice.
Choose Private Limited Company if:
Choose Public Limited Company if:
Professional structuring advice reduces long-term risk.
The debate around private vs public company in Nepal is not about which is better.
It is about which aligns with your strategic objective.
For most foreign companies entering Nepal in 2026:
Private Limited Company offers control, flexibility, and manageable compliance.
Public Limited Company suits large-scale capital-driven ventures.
The right structure protects your capital, reputation, and growth potential.
If you are planning entry into Nepal, now is the time to structure correctly.
Yes. FITTA 2019 permits 100% foreign ownership in most sectors, except restricted industries.
Yes. Public companies must meet prescribed paid-up capital requirements under the Companies Act.
Yes. Conversion is allowed after fulfilling regulatory conditions and shareholder approval.
No. Corporate tax rates generally apply equally. Incentives depend on industry, not structure.
Private companies are typically faster due to fewer regulatory requirements.