If you are evaluating private vs public company in Nepal, you are already asking the right question. The structure you choose will shape ownership, compliance, fundraising, taxation, and exit options. For foreign companies, this decision also affects foreign direct investment (FDI) approval, profit repatriation, and governance control.
Nepal’s legal framework is stable and increasingly investor-friendly. The key laws include the Companies Act 2006, the Foreign Investment and Technology Transfer Act 2019 (FITTA), the Industrial Enterprises Act 2020, and the Income Tax Act 2002. Registration is handled by the Office of the Company Registrar (OCR).
In this complete guide, you will learn:
Let’s break it down clearly.
Under the Companies Act 2006, Nepal recognizes two primary corporate structures:
Both provide limited liability. But they differ significantly in ownership rules, compliance burden, and capital raising flexibility.
A private company in Nepal:
This structure is common for startups, SMEs, subsidiaries, and FDI projects.
A public company in Nepal:
Public companies are typically used for large industrial projects, banks, insurance firms, hydropower projects, or companies seeking listing on Nepal Stock Exchange (NEPSE).
| Criteria | Private Company | Public Company |
|---|---|---|
| Minimum Shareholders | 1 | 7 |
| Maximum Shareholders | 101 | Unlimited |
| Minimum Directors | 1 | 3 |
| Public Share Offering | Not allowed | Allowed |
| Compliance Burden | Moderate | High |
| Suitable For | Startups, FDI subsidiaries | Large-scale fundraising |
| IPO Eligibility | No | Yes |
Original Insight:
For foreign investors, 90% of initial market entries use a private limited structure. Public conversion happens only after scale, regulatory maturity, and capital expansion needs arise.
Defines incorporation, share capital, director duties, annual filings, and governance standards.
Regulates foreign equity participation and repatriation rights.
Corporate tax is generally 25%, with sector-specific rates for banks and special industries.
Provides classification and incentives for industries.
For most foreign companies entering Nepal, a private limited company is preferable because:
A public company is advisable when:
Here is a simplified roadmap.
Submit name reservation application through OCR’s online portal.
Prepare:
Foreign investors must obtain approval from the Department of Industry or Investment Board (depending on sector and size).
File documents at OCR, including:
OCR issues Certificate of Incorporation.
After incorporation:
Public companies face stronger governance obligations and regulatory scrutiny.
Nepal does not impose a strict minimum paid-up capital for most private companies. However, FDI minimum thresholds may apply depending on sector.
For public companies:
Private companies offer tighter control.
Public companies dilute control.
Foreign parent companies often prefer private subsidiaries to maintain strategic control.
Under the Income Tax Act 2002:
There is no fundamental tax rate difference between private and public companies. The difference lies in compliance intensity.
A company may convert from private to public when:
Conversion requires restructuring and regulatory approval.
Foreign companies should consider:
A poorly structured entity may create tax inefficiencies and operational bottlenecks.
If you are:
Choose a private limited company.
If you are:
Consider a public company.
A private company restricts share transfer and cannot raise funds from the public. A public company can offer shares publicly and must meet higher compliance standards.
Yes, subject to sectoral restrictions and FDI approval under FITTA 2019.
There is no fixed minimum for most private companies. However, FDI thresholds may apply by sector.
Yes. It requires restructuring, updated constitutional documents, and regulatory approval.
Private companies are better for startups due to flexibility, lower compliance, and ownership control.
The decision between a private vs public company in Nepal is not just legal. It is strategic. It affects governance, fundraising, compliance, and long-term scalability.
For most foreign investors and startups, the private limited model offers speed, control, and lower regulatory burden. Public companies are ideal for large-scale capital strategies and listing ambitions.
If you are planning to incorporate in Nepal and want a compliant, risk-optimized structure tailored to your business model, now is the time to act.
Ready to register your company in Nepal?
Contact our advisory team for a structure assessment and step-by-step incorporation roadmap customized for foreign investors.