Private vs public company in Nepal is one of the first strategic questions foreign companies face when exploring market entry. The answer shapes everything that follows. Ownership control. Capital requirements. Regulatory scrutiny. Even whether investment is legally allowed in the first place.
Nepal welcomes foreign investment. But not everywhere. Several sectors remain restricted or partially closed to foreign companies. Choosing the wrong company type or sector can stall approvals or permanently block profit repatriation.
This guide gives you a clear, authoritative breakdown. We explain private vs public companies in Nepal. We map restricted and prohibited industries. We connect the dots between legal structure, FDI eligibility, and long-term control. No jargon. No guesswork.
Before looking at restricted sectors, you need clarity on the two core legal vehicles available to foreign investors.
A private company in Nepal is the most common structure used by foreign investors.
Key characteristics:
For most foreign companies, a private limited company is the default entry vehicle.
A public company is designed for large-scale operations and capital markets.
Key characteristics:
Public companies are rare for first-time foreign entrants.
| Area | Private Company | Public Company |
|---|---|---|
| Ownership control | High | Diluted |
| Capital raising | Private funds | Public offerings |
| Compliance burden | Moderate | Heavy |
| FDI suitability | High | Limited use |
| Setup timeline | Faster | Slower |
| Typical use | Subsidiary, JV | Large infrastructure |
Insight:
For foreign companies, the decision is rarely about size. It is about regulatory flexibility and capital control.
Nepal’s foreign investment regime is structure-sensitive.
The wrong structure can:
In practice, over 90 percent of foreign direct investment approvals use private companies.
Foreign investment in Nepal is governed by a layered legal framework.
Key instruments include:
These laws collectively determine:
Not all industries are open to foreign investors. Nepal maintains a “negative list” approach.
Foreign companies cannot invest in the following areas, regardless of company type:
These restrictions apply equally to private and public companies.
Some sectors allow foreign investment only under specific conditions.
Common restrictions include:
Examples include:
Here is the nuance many investors miss.
A sector may be open to foreign investment. But only via a private company. Or only above a certain capital level.
Private companies offer:
For restricted or sensitive sectors, regulators prefer clarity and control.
Public companies are typically used when:
These cases are the exception, not the rule.
Nepal does not impose a universal foreign ownership cap. Limits are sector-specific.
Typical patterns:
Ownership rules apply regardless of private or public status.
Capital thresholds differ by sector, not company type.
General benchmarks:
Public companies often face higher practical capital expectations.
Profit repatriation is permitted under Nepal law.
Allowed repatriation includes:
Private companies usually face fewer delays due to simpler ownership structures.
For foreign investors, compliance complexity matters more than headline tax rates.
Nepal applies uniform corporate tax rates.
However:
Structure alone does not reduce tax. Planning does.
Exit is where early decisions matter most.
Private companies allow:
Public companies involve:
Foreign investors almost always prefer private exits.
These mistakes are costly and avoidable.
Ask three questions:
For most, the answer leads to a private company.
Private vs public company in Nepal is not a theoretical debate. It is a risk decision.
For foreign companies, private limited companies provide:
Public companies serve specific, large-scale use cases. Restricted sectors demand even greater structural precision.
Choosing the right structure from day one protects your capital, your timeline, and your future flexibility.
Yes. Most foreign investors use private companies due to simpler compliance, faster approvals, and stronger ownership control.
In most sectors, yes. Ownership limits apply only in restricted industries defined by law.
Not always. Large projects can use private companies unless sector rules require public participation.
Small retail, personal services, and certain local industries remain fully restricted.
Yes. Dividends, royalties, and sale proceeds can be repatriated after tax and approvals.