If you are evaluating private vs public company in Nepal, you are already asking the right strategic question.
For foreign companies entering Nepal in 2026, your choice of legal structure determines ownership flexibility, capital raising ability, compliance burden, tax exposure, and long-term exit options.
This guide explains the real differences. Not theory. Not generic summaries. But practical, regulation-backed insight grounded in Nepal’s:
By the end, you will know which structure aligns with your capital model, risk appetite, and Nepal expansion strategy.
In Nepal, structure is not just a registration formality.
It determines:
Choosing incorrectly can lock you into compliance overhead you do not need.
Or worse, limit your capital strategy.
Let’s break it down clearly.
Under the Companies Act 2006, Nepal recognizes two main corporate forms:
Both offer limited liability. But they differ significantly in ownership and capital structure.
A Private Limited Company (Pvt. Ltd.) is the most common vehicle for foreign direct investment.
This model is preferred for:
Under the Foreign Investment and Technology Transfer Act 2019, foreign investors can hold up to 100% equity in most sectors, subject to the negative list.
A Public Limited Company (Ltd.) is designed for larger enterprises seeking broader capital access.
Public companies may list on the Nepal Stock Exchange (NEPSE).
This structure suits:
| Criteria | Private Company | Public Company |
|---|---|---|
| Minimum Shareholders | 1 | 7 |
| Maximum Shareholders | 101 | Unlimited |
| Public Share Issue | Not allowed | Allowed |
| Compliance Burden | Moderate | High |
| Board Requirement | Min 1 director | Min 3 directors |
| Financial Disclosure | Limited | Extensive |
| FDI Suitability | Highly suitable | Suitable but complex |
| Listing on NEPSE | No | Yes |
For 90% of foreign investors entering Nepal, a private company is operationally efficient and compliance-optimized.
Public companies are appropriate when capital markets are central to your funding model.
Whether private or public, registration follows structured stages.
File through the Office of the Company Registrar (OCR).
Under the Foreign Investment and Technology Transfer Act 2019.
Issued by OCR.
Under the Income Tax Act 2002.
If applicable under the Industrial Enterprises Act 2020.
For foreign investors focused on operational control, private companies provide stronger governance control.
Corporate tax in Nepal is governed by the Income Tax Act 2002.
Both private and public companies are taxed equally.
However:
Here’s where most foreign investors underestimate risk.
If capital markets are not essential, the added burden of public company status is rarely justified.
A public company is appropriate if:
Otherwise, private limited remains more efficient.
Goal: Back-office IT operations in Kathmandu.
Best structure: Private Limited Company.
Reason: 100% ownership, cost control, low disclosure.
Goal: Raise capital domestically.
Best structure: Public Limited Company.
Reason: IPO access and local investor participation.
Goal: Export-oriented SEZ manufacturing.
Best structure: Private Company initially.
Upgrade to public only if expansion requires capital markets.
Understanding regulatory sequencing prevents costly delays.
Many foreign companies focus only on incorporation.
But structure impacts:
Private companies are easier to restructure.
Public companies are harder to unwind.
Yes. Under FITTA 2019, most sectors allow 100% foreign ownership unless restricted by the negative list.
Nepal currently does not mandate a high statutory minimum capital for private companies, but sectoral regulators may impose thresholds.
Yes. The Companies Act allows conversion subject to compliance and shareholder restructuring.
No. Corporate income tax rates are based on sector, not company type.
Private companies are generally faster due to simpler compliance and fewer governance requirements.
If your objective is operational control, cost efficiency, and FDI-focused expansion, a private limited company is typically the optimal entry structure.
If capital markets are central to your growth strategy, then public company status may be justified.
For most foreign companies entering Nepal in 2026, the answer to private vs public company in Nepal is clear:
Start private. Scale strategically. Convert only when capital demands it.