Foreign investors exploring Nepal often ask one core question: Private vs public company in Nepal which structure is better for trade sector investment?
The answer is strategic, not generic.
Your company structure determines capital flexibility, compliance burden, reporting obligations, repatriation pathways, and even how banks and regulators perceive you.
If you are entering Nepal’s trade sector - import/export, manufacturing-linked trade, wholesale distribution, or cross-border commerce - the choice between a private limited company and a public limited company shapes long-term scalability.
This guide explains:
Let’s break it down properly.
Corporate entities in Nepal are primarily governed by:
Foreign investors typically incorporate through:
Both structures are registered with the Office of Company Registrar (OCR).
Foreign investment approval is handled by the Department of Industry (DOI) or Investment Board Nepal (IBN) depending on project size.
Below is a side-by-side comparison tailored specifically for foreign trade sector investors.
| Feature | Private Limited Company | Public Limited Company |
|---|---|---|
| Minimum Shareholders | 1 | 7 |
| Maximum Shareholders | 101 | Unlimited |
| Public Share Offering | Not allowed | Allowed |
| Minimum Capital | No statutory minimum (practical threshold applies for FDI) | Higher practical threshold |
| Compliance Burden | Moderate | High |
| Reporting & Disclosure | Limited | Mandatory public disclosure |
| Governance | Flexible | Formal board structure required |
| Ideal For | Controlled foreign-owned ventures | Large-scale capital raising |
For most foreign trade investors entering Nepal, a private limited company is the preferred structure unless public capital raising is required.
A private limited company is the most common vehicle used by foreign investors.
For import/export trading companies, wholesale distributors, and foreign-owned subsidiaries, this structure offers operational agility.
A public limited company can raise capital from the public and is subject to securities regulations.
It must comply with:
For most early-stage foreign investors, this structure is excessive.
Nepal’s trade sector continues to grow due to:
According to Nepal Rastra Bank and Department of Customs data, imports consistently exceed exports, creating distribution and import-linked trade opportunities.
Key growth sectors include:
Foreign companies entering these sectors must align structure with scale ambition.
Before deciding on private vs public company in Nepal, consider these trade sector realities:
Foreign investment requires:
Dividend repatriation requires:
Structure affects documentation complexity.
Nepal maintains foreign exchange regulations.
Compliance discipline matters.
Public companies face higher scrutiny.
Let’s examine which structure aligns best with different trade strategies.
Recommended: Private Limited Company
Why:
Recommended: Public Limited Company (if large capital raising required)
Why:
Recommended: Private Limited Company
Why:
Compliance costs can be significantly higher for public entities.
Under the Income Tax Act, 2058:
Tax treatment is generally the same for private and public companies.
However, compliance complexity differs.
Ask these five questions:
If most answers lean toward control and simplicity → choose private.
If capital expansion and public participation matter → consider public.
These mistakes cost time and capital.
A private limited company allows staged growth.
Plan repatriation pathways from day one.
Strong documentation builds regulator trust.
Regulatory interpretation matters.
Avoid unnecessary public structure unless essential.
For most foreign companies entering Nepal’s trade sector, the private limited company structure offers the optimal balance of control, flexibility, and compliance efficiency.
A public company structure becomes relevant only when:
The trade sector rewards operational efficiency.
Private companies provide that agility.
Yes. Under FITTA 2019, 100% foreign ownership is allowed in most sectors except restricted industries.
Yes. The minimum foreign investment threshold is set by law and may vary by sector. Regulatory confirmation is advised.
Yes. Subject to compliance with Companies Act requirements and regulatory approvals.
Generally yes. Fewer shareholders and simpler structure streamline approval documentation.
No. Corporate tax rates are generally the same. Compliance burden differs.
When evaluating Private vs public company in Nepal, foreign trade investors must think beyond incorporation.
Structure determines flexibility, compliance intensity, governance complexity, and long-term scalability.
For most foreign-owned trading businesses, the private limited model offers:
If you are planning to enter Nepal’s trade sector and want a structure optimized for control, compliance, and capital strategy — professional structuring advice is critical.
Speak with an experienced Nepal market-entry advisor before you incorporate.