If you are evaluating private vs public company in Nepal, your decision will shape everything. It will affect ownership control, regulatory burden, tax exposure, and exit strategy. For foreign companies entering Nepal, this choice is not just legal. It is strategic.
Nepal is emerging as a competitive South Asian investment destination. The country recorded steady FDI commitments under the Foreign Investment and Technology Transfer Act 2019 (FITTA). The regulatory framework is clearer than before. Incentives are stronger. Infrastructure is improving.
But structure matters.
In this guide, we break down private vs public company in Nepal from a foreign investor perspective. We reference the Companies Act 2006 (2063), FITTA 2019, Income Tax Act 2002, and regulatory guidance from the Office of Company Registrar (OCR), Department of Industry (DOI), and Nepal Rastra Bank (NRB).
Let’s build clarity.
Nepal offers a strategic location between India and China. It has preferential access to regional markets. Labor costs remain competitive. Hydropower, tourism, ICT, manufacturing, and outsourcing are high-growth sectors.
Key policy drivers include:
For foreign investors, Nepal provides scale at manageable risk. But selecting the right company structure is essential.
Under the Companies Act 2006 (2063), companies in Nepal are primarily categorized as:
Both structures allow foreign investment under FITTA 2019, subject to sector restrictions.
A private limited company:
This is the most common structure for foreign investors.
A public limited company:
Public companies face stricter governance requirements.
Below is a strategic comparison tailored for cross-border investors:
| Criteria | Private Limited Company | Public Limited Company |
|---|---|---|
| Ownership Control | High control | Diluted after public offering |
| Share Transfer | Restricted | Freely transferable |
| Capital Raising | Private placement | Public share issuance |
| Minimum Shareholders | Lower threshold | Higher statutory requirement |
| Regulatory Oversight | Moderate | High including securities regulation |
| Listing Option | Not allowed | Eligible for stock exchange listing |
| Compliance Cost | Lower | Higher |
| Governance Structure | Flexible | Board committees mandatory |
For foreign companies entering Nepal for operations, services, manufacturing, or outsourcing, the private limited company is typically more efficient.
Public companies are ideal when:
Otherwise, private structure offers operational agility.
When assessing private vs public company in Nepal, foreign investors must understand institutional oversight.
Each structure requires OCR incorporation. Foreign investment requires DOI approval under FITTA.
Regardless of structure, foreign investors follow these steps:
The difference lies mainly in governance and disclosure obligations.
Private companies have more flexibility. Public companies must meet minimum paid-up capital requirements under the Companies Act and securities regulations.
Private companies can:
Public companies must comply with:
For many foreign investors, this additional layer increases cost and timeline.
Corporate income tax in Nepal is governed by the Income Tax Act 2002.
General corporate tax rate:
25 percent for most industries
Special rates may apply for:
VAT registration is mandatory above threshold turnover.
Tax treatment does not materially differ between private and public companies. However, compliance burden is higher for public entities due to reporting obligations.
For foreign companies prioritizing speed and control, private structure reduces friction.
Choose a private limited company if:
Most foreign service providers, tech companies, outsourcing firms, and manufacturers enter Nepal using this structure.
A public company may be ideal if:
This structure is common in banking, insurance, hydropower, and infrastructure.
Foreign investors must verify whether their sector is:
FITTA 2019 guarantees repatriation of:
NRB approval is required for repatriation transactions.
For foreign investors unfamiliar with Nepal’s capital markets, private structure often offers lower systemic risk.
While actual figures depend on industry and scale, here is a general cost comparison:
Over a five-year horizon, public compliance can materially exceed private costs.
Under FITTA 2019, foreign investors are entitled to repatriate profits subject to tax clearance and NRB approval.
Private companies allow:
Public companies allow:
Exit flexibility should guide your structure decision.
Here is a simplified compliance list:
Public companies must add securities compliance.
Strategic structuring avoids future restructuring expenses.
Yes. FITTA 2019 allows full foreign ownership in most sectors, except those on the negative list.
Not necessarily. Many large hydropower projects start as private companies before listing.
The general corporate tax rate is 25 percent under the Income Tax Act 2002.
Private company registration may take a few weeks after FDI approval. Public companies take longer due to additional documentation.
Yes, subject to tax clearance and NRB approval as provided under FITTA 2019.
The debate around private vs public company in Nepal is ultimately strategic. Most foreign investors entering Nepal prefer private limited companies for control, speed, and cost efficiency.
Public companies serve capital-intensive sectors and IPO ambitions.
The right structure depends on your growth plan, capital strategy, and compliance appetite.
If you are considering entering Nepal, structure the decision carefully. The wrong choice can cost time and capital. The right choice accelerates scale.