Understanding private vs public company in Nepal is the first critical decision foreign companies must make before entering the market. Nepal welcomes foreign investment, but its corporate framework is rules-driven and procedural. Choosing the wrong structure can delay approvals, restrict operations, or trigger compliance risk later.
This 2026 guide explains, in practical terms, how foreign companies can open a company in Nepal. It compares private and public companies, outlines legal steps, costs, timelines, and highlights common mistakes. The goal is clarity, not theory.
Nepal’s company law is formal. Authorities expect alignment between your business intent and your legal structure. Once registered, changing structures is possible but costly.
Foreign companies usually consider three routes:
Private Limited Company
Public Limited Company
Branch or Representative Office
This article focuses on private vs public company in Nepal, as these are the only structures that allow long-term commercial activity.
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
Registrations are handled by the Office of Company Registrar, while foreign remittances and capital approvals involve the Nepal Rastra Bank.
This framework applies equally to private and public companies, with additional layers for public entities.
A private limited company is the most common choice for foreign investors.
1–101 shareholders
Share transfer restricted
Cannot issue shares to the public
Suitable for 100% foreign ownership (sector-permitting)
Market entry or pilot operations
Service-based businesses
Outsourcing, IT, consulting, trading
Subsidiary of a foreign parent
Private companies balance control, speed, and compliance.
A public company is designed for large-scale operations.
Minimum 7 shareholders
Can invite public share subscriptions
Higher capital thresholds
Mandatory governance and disclosures
Infrastructure and hydropower
Banking and insurance
Large manufacturing
Businesses planning IPOs in Nepal
Public companies are powerful but compliance-heavy.
| Criteria | Private Company | Public Company |
|---|---|---|
| Minimum shareholders | 1 | 7 |
| Maximum shareholders | 101 | Unlimited |
| Public share issue | Not allowed | Allowed |
| Compliance burden | Moderate | High |
| Suitable for FDI | Yes | Yes |
| Typical setup time | 3–6 weeks | 3–6 months |
Insight: Over 90% of foreign investors entering Nepal choose private companies due to flexibility and speed.
Nepal restricts foreign investment in certain sectors. A negative list applies.
Match your growth plan, capital needs, and governance tolerance.
Submit up to three names to the Office of Company Registrar.
Memorandum of Association
Articles of Association
Shareholder and director details
Approval is issued digitally if documents are compliant.
FDI approval is required before capital injection.
Mandatory for all operating companies.
Foreign currency remittance must follow NRB procedures.
Parent company incorporation certificate
Board resolution approving Nepal investment
Passport copies of shareholders/directors
Local registered office address
All documents must be notarized and, where required, apostilled.
Government registration fees
Legal drafting and advisory
Translation and notarization
Capital requirement (sector-specific)
Private company: 3–6 weeks
Public company: 12–24 weeks
Delays usually result from incomplete FDI documentation.
Annual financial statements
Tax filings
Board resolutions
Foreign currency reporting
Publish financials
Hold statutory meetings
Comply with securities regulations
Compliance intensity is a key factor in private vs public company in Nepal decisions.
Choosing a public company too early
Underestimating FDI approval timelines
Assuming nominee structures work
Mixing branch and subsidiary rules
Ignoring repatriation planning
Avoiding these mistakes saves months.
Choose a private company if you want:
Speed
Control
Lower compliance
100% foreign ownership
Choose a public company if you need:
Capital markets access
Large-scale funding
Public credibility
For most foreign companies, private wins.
For most foreign investors, yes. Private companies are faster, cheaper, and easier to manage.
Yes, in permitted sectors, private companies can be fully foreign-owned.
Private companies take 3–6 weeks. Public companies take several months.
There is no fixed minimum, but sector-specific thresholds apply.
Yes, but conversion requires approvals and restructuring.
Choosing between a private vs public company in Nepal is a strategic decision that shapes your market entry, compliance burden, and growth path. For 2026, private companies remain the preferred entry vehicle for foreign investors seeking control, speed, and operational flexibility.