How to Register a Company in Nepal: A Beginner's Guide

If you’re a foreign company planning to enter Nepal, one of your first major decisions will be private vs public company structure. It may sound technical, but this choice shapes everything — from FDI approval to compliance obligations, board control, and long-term scalability.

Over the years, we’ve advised Australian, Indian, and Chinese investors entering Nepal. The biggest delays rarely come from paperwork. They come from choosing the wrong structure at the beginning.

In this post, we’ll explain what private vs public company means in Nepal, why it matters for foreign investors, and walk you step-by-step through how to register a company. By the end, you’ll know exactly how to move forward with clarity and confidence.

What Is Private vs Public Company, and Why Does It Matter?

Before registering a company in Nepal, you must decide whether to incorporate a private company or a public company under the Companies Act, 2063 (2006).

Here’s the difference in simple terms:

Private Company in Nepal

• Minimum 1 shareholder
• Maximum 101 shareholders
• Cannot invite public to subscribe shares
• Restricted share transfer
• Lower compliance burden

Public Company in Nepal

• Minimum 7 shareholders
• No maximum shareholder limit
• Can offer shares to the public
• Stricter reporting and governance requirements
• Mandatory board structure requirements

Why This Decision Matters for Foreign Companies

For most foreign investors entering Nepal through FDI, a private limited company is the preferred structure because:

• It provides greater control
• It requires fewer regulatory disclosures
• It simplifies decision-making
• It is faster to incorporate

However, if your long-term goal is capital markets access or large-scale fundraising inside Nepal, a public company may be appropriate.

Choosing correctly at the start avoids costly restructuring later.

How to Register a Company in Nepal (Step-by-Step)

Below is the practical process foreign companies follow when incorporating in Nepal.

Step 1: Decide the Right Structure (Private vs Public Company)

This is the foundation.

Ask yourself:

• Will you raise capital locally?
• How many shareholders will there be?
• Is this a wholly owned subsidiary?
• Is control or public visibility more important?

Example:
An Australian mortgage outsourcing firm opening a Nepal back-office typically registers as a private company because operations are internal and shareholder control must remain tight.

Step 2: Obtain FDI Approval (If Applicable)

If the shareholders are foreign entities or individuals, Foreign Direct Investment approval is required.

This involves:

• Investment proposal submission
• Source of funds declaration
• Sector approval verification
• Regulatory clearance

Approval may come through relevant authorities depending on investment size.

Skipping this step is a common mistake. Without FDI approval, share issuance cannot proceed legally.

Step 3: Reserve Company Name

The proposed company name must be reserved through the Office of the Company Registrar (OCR).

Tips:

• Prepare 3 alternative names
• Avoid similarity with existing companies
• Ensure compliance with naming rules

Approval typically takes a few working days.

Step 4: Prepare Incorporation Documents

You’ll need:

• Memorandum of Association (MOA)
• Articles of Association (AOA)
• Share structure details
• Director details
• Registered office address
• Passport copies (for foreign shareholders)

Precision here matters. The MOA defines your company’s permitted business activities. If drafted too narrowly, you may need amendments later.

Step 5: Company Registration with OCR

Once documents are submitted:

• Government registration fees are paid
• Digital registration completed
• Certificate of Incorporation issued

At this stage, your legal entity officially exists.

Step 6: Post-Registration Compliance

Registration is just the beginning.

You must then:

• Obtain PAN (Permanent Account Number)
• Register for VAT (if applicable)
• Open corporate bank account
• Inject foreign investment capital
• Issue share certificates
• Register with Social Security Fund (if hiring employees)

Foreign companies often underestimate this phase. Compliance setup is critical for smooth operations.

Private vs Public Company: Quick Comparison Table

For 90% of foreign investors entering Nepal, a private company is the strategic starting point.

Tips and Reminders for Foreign Investors

1. Plan capital structure early. Changing it later is complex.
2. Draft MOA broadly. Avoid restrictive business activity clauses.
3. Understand repatriation rules. Profit repatriation requires compliance documentation.
4. Do not delay post-registration filings. Penalties accumulate quickly.
5. Think long-term. Structure affects future exit and expansion options.

Common Mistakes Foreign Companies Make

• Choosing public company unnecessarily
• Underestimating compliance obligations
• Delaying FDI approval
• Using generic MOA templates
• Not planning tax structure in advance

These errors cost time, money, and credibility.

Finsl Verdict: Private V.s Public Company

Registering a company in Nepal is straightforward — when done strategically. The real decision is not paperwork. It is choosing the correct private vs public company structure aligned with your growth plan.

For most foreign investors, a private company offers flexibility, control, and faster market entry. But every business is different.

If you approach incorporation as a long-term strategic decision rather than an administrative formality, you set your Nepal expansion up for success.

Frequently Asked Questions (People Also Ask)

1. What is the difference between private vs public company in Nepal?

A private company limits shareholders and cannot offer shares to the public. A public company can raise capital from the public and must follow stricter compliance rules.

2. Can a foreigner register a company in Nepal?

Yes. Foreign investors can register a company through the FDI approval process and incorporate under Nepal’s Companies Act.

3. How long does company registration take in Nepal?

Typically 2–4 weeks, depending on FDI approval and document preparation accuracy.

4. Is private company better for foreign investors?

In most cases, yes. It offers more control, fewer reporting requirements, and faster setup.

5. What is the minimum capital requirement?

Capital depends on sector regulations and FDI thresholds. There is no universal minimum for all industries.

Call to Action

Planning to register your company in Nepal?

We help foreign companies structure, incorporate, and remain fully compliant from day one.

Book a strategy consultation today and ensure your private vs public company decision is aligned with your long-term market entry goals.