How to Get Your Company Registered in Nepal: A Step-by-Step Guide

Private vs public company in Nepal is one of the first and most important decisions foreign companies face when entering the Nepali market.
This choice affects ownership limits, capital requirements, compliance costs, fundraising options, and long-term exit strategies.

Many foreign investors assume Nepal’s system mirrors India or the UK. It does not.
Nepal has its own corporate rules, foreign investment thresholds, and regulatory approvals that shape how you should register.

This guide gives you a clear, step-by-step explanation of how to get your company registered in Nepal, while helping you decide whether a private company or a public company is right for your goals.

Why Company Structure Matters in Nepal

Choosing the wrong structure can slow approvals, increase compliance costs, or block future expansion.

For foreign companies, the structure determines:

• Eligibility under foreign investment rules
• Minimum capital commitments
• Share transfer flexibility
• Disclosure and audit obligations
• Ability to raise funds locally

In practice, over 90 percent of foreign investors choose a private company for Nepal market entry.
Public companies are strategic tools, not default options.

Understanding Company Registration in Nepal

All companies in Nepal are registered with the Office of Company Registrar under the Companies Act.

Foreign investors must also interact with:

• Department of Industry for foreign investment approval
• Nepal Rastra Bank for capital inflow compliance
• Inland Revenue Department for tax registration

The registration process differs slightly depending on whether you choose a private or public company.

What Is a Private Company in Nepal?

A private company in Nepal is a closely held entity designed for controlled ownership and operational flexibility.

Key Features of a Private Company

• Shareholders: 1 to 101
• Cannot invite public subscription
• Shares transferred with restrictions
• Faster registration and approvals
• Lower compliance burden

Why Foreign Companies Prefer Private Companies

Private companies are ideal for:

• Market entry and pilot operations
• Back-office and captive service centers
• Wholly owned subsidiaries
• Joint ventures with limited partners

They offer control, confidentiality, and predictable compliance.

What Is a Public Company in Nepal?

A public company in Nepal is designed to raise capital from the public or institutional investors.

Key Features of a Public Company

• Minimum 7 shareholders
• No upper shareholder limit
• Can issue shares to the public
• Higher disclosure requirements
• Mandatory governance structures

When Public Companies Make Sense

Public companies are suitable when:

• Large-scale capital raising is planned
• Listing on Nepal Stock Exchange is a goal
• Infrastructure or national-scale projects are involved

For most foreign entrants, this structure is unnecessarily complex at the entry stage.

Private vs Public Company in Nepal: Core Differences

Comparison Table for Foreign Investors

This comparison highlights why private companies dominate foreign registrations.

Step-by-Step Guide to Registering a Company in Nepal

Whether private or public, the registration journey follows a structured path.

Step 1: Decide on Private vs Public Company in Nepal

Before paperwork, align structure with:

• Investment size
• Ownership control
• Growth horizon
• Exit plans

This decision impacts every approval that follows.

Step 2: Name Reservation

You must reserve a unique company name with the Office of Company Registrar.

Key rules:

• Name must not conflict with existing companies
• Restricted words require justification
• Approval usually within 1–3 working days

Step 3: Foreign Investment Approval (If Applicable)

Foreign shareholders require approval from the Department of Industry.

You submit:

• Investment proposal
• Shareholding structure
• Capital commitment details
• Business activities

This step is critical for foreign companies.

Step 4: Draft Constitutional Documents

You prepare:

• Memorandum of Association
• Articles of Association

These define:

• Business scope
• Share rights
• Governance rules

Private companies enjoy more flexibility here.

Step 5: Company Registration Certificate

Once documents are approved:

• Company is registered
• Registration certificate is issued
• Legal personality is created

This is the official birth of your Nepal entity.

Step 6: Tax and Statutory Registrations

After incorporation, you complete:

• Permanent Account Number registration
• VAT registration if applicable
• Social Security Fund employer registration

These are mandatory for operations.

Capital Requirements for Private vs Public Company in Nepal

Nepal sets minimum foreign investment thresholds, not just share capital.

Important points:

• Foreign investment generally starts at NPR 20 million
• Capital must be remitted through banking channels
• Nepal Rastra Bank compliance is required

Public companies often need significantly higher capitalization due to scale expectations.

Compliance Obligations: What Foreign Companies Must Know

Ongoing Compliance for Private Companies

• Annual returns filing
• Financial statements submission
• Tax filings
• Board meetings

Additional Compliance for Public Companies

• Quarterly disclosures
• Public reporting standards
• Stronger audit requirements
• Shareholder communication

Compliance costs can be two to three times higher for public companies.

Common Mistakes Foreign Investors Make

Avoid these frequent issues:

• Choosing public company structure too early
• Underestimating capital remittance timelines
• Drafting overly broad business objectives
• Ignoring sector-specific restrictions

These mistakes delay approvals and increase costs.

Strategic Advice: Choosing the Right Structure

For most foreign companies:

• Start private
• Build operational traction
• Convert to public later if required

Nepal allows restructuring as your business matures.

Frequently Asked Questions: Private vs Public Company in Nepal

Is a private company better than a public company in Nepal?

For most foreign companies, yes. Private companies offer faster setup, lower compliance, and stronger ownership control.

Can a foreigner own 100 percent of a private company in Nepal?

Yes, in most permitted sectors, subject to foreign investment approval.

What is the minimum capital for a public company in Nepal?

Public companies generally require higher capital aligned with large-scale operations and regulatory expectations.

How long does company registration take in Nepal?

Private companies typically register within 3–6 weeks if documents are complete. Public companies take longer.

Can a private company convert into a public company later?

Yes. Nepalese law allows conversion once conditions are met.

Conclusion: Private vs Public Company in Nepal for Foreign Companies

Choosing private vs public company in Nepal is not a legal formality.
It is a strategic decision that shapes your cost, control, and growth.

For foreign companies entering Nepal:

• Private companies offer speed and flexibility
• Public companies serve long-term capital strategies

Getting this choice right from day one saves time, money, and regulatory risk.

If you are planning to register a company in Nepal, professional guidance can simplify approvals and accelerate market entry.