Foreign investors exploring Nepal often start with one core question: private vs public company in Nepal which structure works, and where are the limits?
The answer is not only about company type. It is about which industries are open, restricted, or entirely closed to foreign capital, and how your entry structure interacts with those rules.
This guide is written for foreign companies that want a clear, authoritative view of Nepal’s investment landscape. It goes beyond theory and focuses on what you can and cannot do, how regulators interpret the rules, and how smart investors design around restrictions without creating future exit or repatriation problems.
Choosing between a private and public company in Nepal is not just a governance decision. It shapes:
Most foreign investors enter Nepal through private limited companies. Public companies are rare for initial entry and are typically used only when:
Before choosing a structure, investors must first understand which industries are restricted, because no company type can override sectoral prohibitions.
Nepal’s foreign investment regime is governed by a combination of acts, rules, and periodic government notifications. The most relevant include:
Together, these instruments define:
Regulatory oversight typically involves the Department of Industry, sector ministries, and the central bank for capital and repatriation approvals.
Nepal uses a negative list approach. This means:
For foreign companies, this list is the single most important document to review before choosing between a private or public company structure.
Below are the major categories of industries where foreign investment is restricted or prohibited, regardless of company type.
Foreign investors are not allowed to invest in industries reserved for local entrepreneurs.
These include:
Why restricted:
These sectors are protected to preserve livelihoods and local entrepreneurship.
Industries that depend on personal labor or local trust relationships are closed to foreign capital.
Examples include:
These businesses must remain Nepalese-owned, regardless of whether the company is private or public.
Foreign investment is restricted in small-scale retail trading.
This includes:
Large-scale wholesale, distribution, or export-oriented trading may still be permitted under specific approvals.
Foreign ownership is restricted in:
Why restricted:
Media is considered sensitive due to its influence on public opinion and national discourse.
Partial foreign involvement may be possible through technology or content partnerships, but equity ownership is limited.
Foreign investment is strictly prohibited in:
This restriction applies universally, with no exceptions.
Foreign investors cannot engage in speculative land or property trading.
However, real estate use is permitted when:
Ownership purely for buying and selling land remains prohibited.
Some sectors are not fully closed, but require higher scrutiny and approvals.
These include:
In such sectors, foreign investors must comply with:
Here, the private vs public company in Nepal decision becomes strategic, not procedural.
Foreign investors overwhelmingly choose private limited companies because they offer:
Private companies are ideal for:
Public companies are typically used when:
They come with heavier compliance and public disclosure obligations.
| Factor | Private Company | Public Company |
|---|---|---|
| Typical FDI use | High | Low |
| Incorporation speed | Faster | Slower |
| Minimum shareholders | 1–50 | 7+ |
| Public fundraising | Not allowed | Allowed |
| Compliance burden | Moderate | High |
| Best for | Market entry, services | Infrastructure, finance |
Insight:
For restricted or sensitive sectors, company type does not bypass regulation. Sector eligibility always comes first.
Many foreign companies fail quietly in Nepal due to early structural mistakes.
The most common errors include:
These mistakes are expensive and often irreversible.
Experienced investors use structured entry strategies, such as:
This approach reduces regulatory friction while preserving long-term optionality.
Foreign investors should rely on primary sources, including:
Professional advisors often coordinate approvals across these institutions to avoid misinterpretation.
For foreign companies, the real question is not private vs public company in Nepal.
The real question is whether your target industry is open, restricted, or prohibited—and how your entry structure aligns with that reality.
Get the sector wrong, and no company type will save the investment.
Get the structure right, and Nepal can be a stable, cost-efficient, and scalable market entry platform.
No. Nepal uses a negative list. Some sectors are restricted or prohibited regardless of company type.
No. Public company status does not override sectoral prohibitions.
Most foreign investors choose private limited companies for flexibility and speed.
Only for operational use linked to approved industries. Speculative trading is prohibited.
Approvals typically involve the Department of Industry and Nepal Rastra Bank.