Foreign investors exploring Nepal often ask one defining question: Private vs public company in Nepal — which structure is right for us?
This single decision affects ownership control, compliance cost, capital raising ability, and long-term exit strategy.
Nepal’s investment framework is governed primarily by:
Together, these laws regulate incorporation, foreign equity approval, governance standards, taxation, and repatriation.
If you are evaluating market entry, this guide will help you confidently decide between a private limited company and a public limited company in Nepal.
Choosing between a private and public company is not just procedural.
It determines:
For foreign companies, especially those entering Nepal for the first time, structure selection impacts risk exposure and operational flexibility.
In most cases, foreign subsidiaries choose private companies. However, large infrastructure and regulated sectors require public companies.
Let’s examine both carefully.
Below is a strategic comparison tailored for foreign decision-makers.
| Feature | Private Limited Company | Public Limited Company |
|---|---|---|
| Minimum Shareholders | 1 | 7 |
| Maximum Shareholders | 101 | Unlimited |
| Public Share Issue | Not allowed | Allowed |
| Regulatory Oversight | Moderate | High |
| Governance Structure | Flexible | Mandatory board committees |
| Disclosure | Limited | Extensive |
| Typical Use | FDI subsidiaries, SMEs | Banks, hydropower, listed firms |
This table shows the surface-level difference. The real impact lies in governance and capital structure.
A private limited company is the most common structure for foreign investors.
For IT companies, outsourcing operations, manufacturing units, trading companies, and wholly owned subsidiaries, this structure provides the best balance of flexibility and compliance.
Private companies must:
Registration and compliance are handled through the Office of Company Registrar.
Foreign investment approval is processed by the Department of Industry.
Public companies are designed for large-scale operations and capital markets.
Public companies are mandatory in sectors such as:
Public companies are powerful but complex.
Foreign companies interact with three primary authorities:
Each plays a distinct role in foreign direct investment.
Under the Income Tax Act 2002:
There is no inherent corporate tax difference between private and public companies.
Tax advantages depend on sector classification, not company type.
Your capital strategy should drive your structural decision.
Choose a private company if:
Choose a public company if:
Many foreign investors begin as private companies and convert later if scaling demands public capital.
Public governance frameworks increase compliance costs significantly.
Under FITTA 2019, both private and public companies may repatriate:
Approval and foreign exchange clearance must be processed through Nepal Rastra Bank.
Structure does not restrict repatriation rights. Documentation discipline determines success.
When comparing Private vs public company in Nepal, foreign investors must evaluate:
Private companies offer greater confidentiality during early-stage market entry.
Public companies increase visibility and regulatory exposure.
Here is a simplified decision model:
If IPO or public capital is not part of your roadmap, a private company is typically optimal.
Choose private if:
Most foreign direct investments in Nepal follow this structure.
Choose public if:
Public companies are appropriate for infrastructure-heavy sectors.
Yes, subject to sector eligibility under FITTA 2019. Most service and manufacturing sectors permit full foreign ownership.
No. It is only required in specific regulated sectors such as banking and insurance.
Private companies generally have lower governance and disclosure requirements.
Yes. Conversion is allowed under the Companies Act 2006 with regulatory approval.
No. Corporate tax depends on sector incentives, not company structure.
Choosing between a Private vs public company in Nepal is a strategic decision.
For most foreign investors, a private limited company offers:
Public companies serve large-scale capital needs and regulated industries.
If you are evaluating foreign investment in Nepal, your company structure is the first foundational decision.
Making the right choice today prevents expensive restructuring tomorrow.