How to Register Your Company in Nepal: The Essential Checklist

Choosing between a private vs public company in Nepal is one of the most important early decisions foreign investors make.
This choice affects ownership, compliance, fundraising, and long-term scalability.

Many international founders rush into incorporation without understanding Nepal’s legal distinctions. That often leads to restructuring costs later.

This guide gives you a clear, practical, and legally accurate checklist for registering a company in Nepal.
It is written specifically for foreign companies evaluating market entry, FDI approval, and long-term operations.

Understanding Company Structures in Nepal

Nepal primarily recognizes two company types under the Companies Act 2006:

• Private Limited Company

• Public Limited Company

Both are regulated by the Office of the Company Registrar.

Private vs Public Company in Nepal – Core Legal Differences

What Is a Private Limited Company in Nepal?

A private limited company is the most common structure for foreign investors.

Key legal features:

• Shareholders: 1 to 101

• Share transfer restrictions

• No public share issuance

• Lower compliance burden

It is ideal for:

• Subsidiaries

• Joint ventures

• Offshore delivery centers

• Professional services firms

What Is a Public Limited Company in Nepal?

A public limited company is designed for large-scale operations.

Key legal features:

• Minimum 7 shareholders

• Can issue shares to the public

• Mandatory governance structures

• Higher disclosure obligations

It is suitable for:

• Banks and financial institutions

• Large infrastructure projects

• IPO-driven businesses

Private vs Public Company in Nepal – Side-by-Side Comparison

* Capital thresholds vary by sector and FDI approval.

Foreign Investment Rules You Must Know

Foreign companies must comply with the Foreign Investment and Technology Transfer Act 2019.

Key FDI rules:

• Minimum foreign investment: NPR 20 million

• 100% foreign ownership allowed in most sectors

• Sectoral restrictions apply

• Approval required before incorporation

FDI applications are processed by:

• Department of Industry

• or Investment Board Nepal (for large projects)

Step-by-Step Company Registration Checklist (Private vs Public Company in Nepal)

1. Decide the Company Type

Most foreign companies choose private limited due to speed and flexibility.

2. Name Reservation

Apply online with the Office of Company Registrar.

3. Draft Constitutional Documents

You will need:

• Memorandum of Association (MOA)

• Articles of Association (AOA)

4. Obtain FDI Approval

Mandatory for foreign shareholders.

5. Company Registration

Submit documents and capital structure.

6. PAN & VAT Registration

With the Inland Revenue Department.

7. Bank Account & Capital Injection

Foreign currency inflow must follow NRB guidelines.

8. Industry-Specific Licenses

Required for regulated sectors.

Compliance Obligations After Registration

Foreign-owned companies must comply with:

• Labour Act 2017

• Income Tax Act 2002

• Social Security Fund

Ongoing obligations include:

• Annual returns

• Tax filings

• Statutory audits

• Board resolutions

When Should a Foreign Company Choose a Public Company in Nepal?

A public company makes sense only if:

1. You plan to raise capital locally

2. You operate in a regulated industry

3. You require large-scale public trust

For most foreign investors, private limited companies remain the optimal choice.

Common Mistakes Foreign Investors Make

Avoid these costly errors:

• Choosing a public company too early

• Underestimating FDI timelines

• Ignoring sectoral restrictions

• Using generic MOA/AOA templates

A structured advisory approach prevents rework and penalties.

Why Nepal Is Attractive for Foreign Companies

Nepal offers:

• Competitive labor costs

• English-speaking workforce

• Strategic access to India and China

• Liberal FDI regime

When paired with the right company structure, Nepal becomes a powerful growth base.

Private vs Public Company in Nepal – Final Recommendation

For 90% of foreign companies, a private limited company is the fastest, safest, and most cost-effective entry route.

Public companies should be considered only with clear regulatory and capital-market objectives.

Frequently Asked Questions (People Also Ask)

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

Yes, for most foreign investors. Private companies are faster to register and easier to manage.

Can a foreigner fully own a company in Nepal?

Yes. 100% foreign ownership is allowed in most sectors with FDI approval.

How long does company registration take in Nepal?

Typically, 3–6 weeks, depending on FDI approval and sector.

What is the minimum capital for foreign investment?

NPR 20 million is the general minimum under FITTA 2019.

Can a private company convert into a public company later?

Yes. Conversion is permitted with regulatory approvals.