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.
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.
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
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
| Criteria | Private Company | Public Company |
|---|---|---|
| Minimum shareholders | 1 | 7 |
| Maximum shareholders | 101 | Unlimited |
| Public share issuance | Not allowed | Allowed |
| Minimum capital | NPR 100,000* | NPR 10,000,000* |
| Compliance complexity | Low | High |
| Ideal for foreign investors | ✅ Yes | ⚠️ Limited cases |
* Capital thresholds vary by sector and FDI approval.
Foreign companies must comply with the Foreign Investment and Technology Transfer Act 2019.
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)
Most foreign companies choose private limited due to speed and flexibility.
Apply online with the Office of Company Registrar.
You will need:
Memorandum of Association (MOA)
Articles of Association (AOA)
Mandatory for foreign shareholders.
Submit documents and capital structure.
With the Inland Revenue Department.
Foreign currency inflow must follow NRB guidelines.
Required for regulated sectors.
Foreign-owned companies must comply with:
Labour Act 2017
Income Tax Act 2002
Social Security Fund
Annual returns
Tax filings
Statutory audits
Board resolutions
A public company makes sense only if:
You plan to raise capital locally
You operate in a regulated industry
You require large-scale public trust
For most foreign investors, private limited companies remain the optimal choice.
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.
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.
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.
Yes, for most foreign investors. Private companies are faster to register and easier to manage.
Yes. 100% foreign ownership is allowed in most sectors with FDI approval.
Typically, 3–6 weeks, depending on FDI approval and sector.
NPR 20 million is the general minimum under FITTA 2019.
Yes. Conversion is permitted with regulatory approvals.