If you are evaluating Private vs public company Nepal, you are making a strategic decision that affects control, compliance, funding, and exit options. For foreign companies, this choice determines how capital enters Nepal, how governance works, and how fast operations can scale. In this guide, you will find a clear, authoritative comparison grounded in Nepali law, market practice, and foreign direct investment realities.
This article is written for founders, CFOs, and legal teams planning a Nepal market entry. It explains not only the legal differences, but also the commercial consequences you will face in practice.
Nepal’s corporate framework recognises two main for-profit company types relevant to foreign investors: Private Limited Companies and Public Limited Companies. Both are governed primarily by the Companies Act, 2006 and supervised by the Office of the Company Registrar (OCR).
At a high level:
A private company prioritises control, flexibility, and faster setup.
A public company prioritises capital raising, transparency, and market credibility.
The right structure depends on your investment size, funding roadmap, and long-term strategy.
A private limited company in Nepal is designed for closely held businesses, subsidiaries, and foreign-owned operating entities.
Share transfer is restricted by law and the Articles of Association.
Public invitation to subscribe shares is prohibited.
Ownership is capped, making it suitable for controlled groups.
Compliance obligations are lighter than for public companies.
Private companies are the most common structure for foreign direct investment in Nepal.
Wholly owned Nepal subsidiaries
Joint ventures with a small number of partners
Service delivery centres and offshore teams
Pilot market entry before large capital deployment
A public limited company in Nepal is designed for larger enterprises that intend to raise capital from the public or institutional investors.
Can issue shares to the public, including through an IPO
Must meet higher disclosure and governance standards
Shares may be listed on the Nepal Stock Exchange (NEPSE)
Minimum capital thresholds apply
Public companies are less common for initial foreign entry but relevant for infrastructure, finance, and large-scale ventures.
| Factor | Private Company in Nepal | Public Company in Nepal |
|---|---|---|
| Ownership | Restricted shareholders | Open to public investors |
| Share transfer | Limited and controlled | Freely transferable |
| Capital raising | Private placement only | IPO and public issue allowed |
| Minimum capital | No high statutory minimum | Higher minimum required |
| Compliance burden | Moderate | High |
| Disclosure | Limited filings | Extensive public disclosures |
| Best for | Foreign subsidiaries, SMEs | Large projects, IPO plans |
This comparison highlights why most foreign investors start with a private company.
Both structures are governed by the Companies Act, 2006, with additional regulations from sectoral authorities and, for foreign investors, FITTA 2019 and Nepal Rastra Bank directives.
Memorandum of Association (MOA)
Articles of Association (AOA)
Registration with the Office of the Company Registrar
Tax registration and statutory filings
Prospectus approval
Securities Board of Nepal (SEBON) compliance
Ongoing public disclosure obligations
Private companies in Nepal do not have a high statutory minimum capital. Capital is defined based on business needs and FDI approval.
Public companies require significantly higher paid-up capital. Sector-specific laws may impose additional thresholds, especially in banking, insurance, and energy.
Foreign ownership is permitted in both structures, subject to sectoral restrictions and approval processes.
Annual financial statements
Annual general meeting
Tax filings and labour compliance
Limited public disclosure
Quarterly and annual reporting
Independent directors and committees
Public disclosures and audits
SEBON and NEPSE reporting
This difference directly impacts cost and management bandwidth.
Why most foreign companies choose private companies in Nepal:
Full operational control
Faster incorporation timelines
Lower compliance and audit costs
Easier decision-making
Flexible exit through share transfer or restructuring
These advantages make private companies ideal for first-time entrants.
Public companies make sense when:
Large capital needs exceed private funding
Public credibility is essential
Long-term listing on NEPSE is planned
Broad local ownership is required
However, these benefits come with higher regulatory exposure.
Define your capital requirement and funding roadmap.
Assess whether public fundraising is necessary.
Evaluate governance and disclosure capacity.
Consider speed of market entry.
Align structure with exit strategy.
This framework helps boards make defensible decisions.
Choosing a public company too early
Underestimating compliance costs
Ignoring sector-specific restrictions
Overcapitalising without clear deployment plans
Misaligning structure with repatriation strategy
Avoiding these mistakes saves time and regulatory friction.
Tax treatment is broadly similar for both structures, but public companies face more scrutiny. Dividend repatriation, capital reduction, and exit proceeds must comply with tax laws and central bank regulations.
Private companies offer more flexibility in restructuring and exit planning.
In real transactions, over 90 percent of foreign investors enter Nepal through private limited companies. Public companies are typically used later, once operations stabilise and capital needs expand.
This staged approach reduces risk and preserves flexibility.
When comparing Private vs public company Nepal, the private company is the default choice for foreign investors. It offers control, speed, and compliance efficiency. Public companies are powerful tools, but only when scale and public capital justify the complexity.
The right decision aligns legal structure with commercial reality.
Planning to enter Nepal or restructure your existing entity? Speak with a Nepal market-entry specialist to confirm whether a private or public company best fits your investment strategy.
For most foreign investors, yes. Private companies offer control, lower compliance, and faster setup. Public companies suit large capital-intensive projects.
Yes, in most permitted sectors, subject to FDI approval and regulatory compliance.
Yes. Nepalese law allows conversion, subject to meeting capital, compliance, and approval requirements.
Tax rates are generally similar, but public companies face stricter audits and disclosures.
Private companies usually offer easier exits through share transfer or restructuring.