If you are a foreign company planning to enter South Asia, Nepal is increasingly on your radar. One of the first strategic decisions you must make is private vs public company in Nepal. This choice directly affects formation costs, capital requirements, compliance exposure, and future fundraising flexibility.
Within the first 100 days of market entry, most foreign founders ask one core question. How much does it cost to form a company in Nepal, and which structure makes sense for us? This guide answers that question with clarity, accuracy, and real-world insight.
Nepal has quietly become a preferred destination for foreign investors seeking cost efficiency, skilled talent, and regulatory modernization.
Key drivers include:
Competitive operating costs compared to India and Southeast Asia
English-speaking professional workforce
Online company registration through the Office of Company Registrar
Clear foreign investment pathways under FITTA 2019
For most foreign companies, the entry decision comes down to private vs public company in Nepal, with cost and compliance as the deciding factors.
Company formation in Nepal is governed primarily by:
Companies Act, 2006
Foreign Investment and Technology Transfer Act (FITTA), 2019
Industrial Enterprises Act, 2020
Income Tax Act, 2002
These laws define how companies are incorporated, funded, governed, and audited. Foreign companies must comply with all of them, regardless of whether they choose a private or public structure.
A private company in Nepal is the most common structure used by foreign investors.
Minimum shareholders: 1
Maximum shareholders: 101
Share transfer: Restricted
Public share issuance: Not allowed
Common use: Subsidiaries, back-office centers, service companies
Private companies are simpler, cheaper, and faster to incorporate. They are ideal for:
Market entry
Cost-center operations
Captive service entities
Long-term controlled ownership
A public company in Nepal is designed for large-scale capital raising and public participation.
Minimum shareholders: 7
No maximum shareholder limit
Can issue shares to the public
Subject to securities regulation
Mandatory external audits
Public companies are rarely used by foreign investors at the entry stage due to higher costs and compliance burdens.
| Cost Component | Private Company (NPR) | Public Company (NPR) |
|---|---|---|
| Registration fees | 1,000–15,000 | 20,000–100,000+ |
| Minimum capital | No fixed minimum | NPR 10 million |
| Legal & advisory | Moderate | High |
| Audit requirements | Conditional | Mandatory |
| Annual compliance cost | Lower | Significantly higher |
This comparison alone explains why over 90 percent of foreign investors choose private companies in Nepal.
The Office of Company Registrar charges fees based on authorized capital.
Typical ranges:
NPR 1 million capital: ~NPR 1,000
NPR 10 million capital: ~NPR 5,000
NPR 100 million capital: ~NPR 15,000
Foreign investors usually engage local advisors for:
Name reservation
Memorandum and Articles drafting
Shareholder resolutions
Foreign investment approval
Estimated cost: NPR 150,000 to 400,000, depending on complexity.
If foreign ownership is involved, approval from the Department of Industry or Investment Board Nepal is required.
Costs include:
Application preparation
Document notarization and legalization
Regulatory liaison
Public companies involve significantly higher upfront and ongoing costs.
Public companies must have minimum paid-up capital of NPR 10 million. In practice, this is often much higher.
Prospectus preparation
Regulatory approvals
Mandatory statutory audit
Public disclosures
These costs often exceed NPR 1 million annually, even before operations begin.
Foreign founders often underestimate indirect costs.
These include:
Certified translation of foreign documents
Embassy or apostille legalization
Local director appointments
Bank compliance reviews
Annual renewals and filings
Planning for these costs early avoids delays and penalties.
Annual return filing
Tax filings and audits (if thresholds met)
Share registry maintenance
Mandatory annual audit
Public disclosures
Securities reporting
Higher scrutiny from regulators
For foreign companies focused on operations rather than fundraising, private companies provide far better compliance efficiency.
Suitable for parent-subsidiary funding
Capital injection through equity or loans
Limited public fundraising
Can raise capital from the public
Suitable for large infrastructure or financial institutions
High governance overhead
Most foreign entrants do not need public fundraising at the Nepal entry stage.
For foreign companies entering Nepal, the answer is clear in most cases.
Choose a private company if you want:
Faster setup
Lower cost
Full ownership control
Simpler compliance
Public companies make sense only when public capital markets are central to the business model.
Reserve company name
Prepare incorporation documents
Obtain foreign investment approval
Register with the Office of Company Registrar
Open bank account and inject capital
Register for tax and statutory compliance
This process typically takes 3 to 6 weeks when properly managed.
Key tax considerations include:
Corporate income tax: 25 percent
Withholding taxes on payments
VAT registration if applicable
Transfer pricing compliance for related parties
Understanding tax exposure early is critical for cost planning.
This article reflects:
Nepal Companies Act and FITTA requirements
Practical advisory experience with foreign investors
Regulatory guidance from OCR and DOI
On-the-ground compliance realities
It is written for decision-makers, not theorists.
When evaluating private vs public company in Nepal, cost, control, and compliance matter more than labels. For most foreign companies, a private company offers the fastest, safest, and most cost-effective entry into Nepal.
If you are planning your Nepal expansion, structuring it correctly from day one can save years of regulatory friction and unnecessary expense.
The right structure is not about ambition. It is about alignment.
No. Nepal law does not prescribe a minimum capital for private companies, making them ideal for foreign startups and service entities.
Yes. Subject to sector eligibility under FITTA 2019, foreign investors can own 100 percent equity in a private company.
With complete documentation, registration typically takes 3 to 6 weeks, including foreign investment approval.
Audits are mandatory only if turnover or capital thresholds are crossed. Many small private companies are exempt.
Yes. Nepal law allows conversion, subject to capital requirements and regulatory approvals.