If you’re a foreign company planning to expand into Nepal, your first major legal decision is choosing between a private vs public company structure. It may seem like a technical formality. In reality, it shapes your FDI approval process, compliance obligations, capital structure, reporting requirements, and even your long-term exit strategy.
This topic matters because Nepal’s regulatory framework especially under the Companies Act, 2063 (2006) and the Foreign Investment and Technology Transfer Act (FITTA) is precise. One wrong structural decision can delay approvals from the Department of Industry (DOI) or Nepal Rastra Bank (NRB).
This guide is written for foreign companies, investors, and international founders evaluating Nepal as a market entry destination.
In this post, we’ll explain what private vs public company means in Nepal, outline the legal requirements step-by-step, clarify FDI implications, and share practical insights from cross-border incorporations so you can move forward with confidence.
Under Nepal’s Companies Act, 2063, companies are broadly classified into:
A private company:
This is the most common structure for foreign investors entering Nepal.
A public company:
For most foreign companies entering Nepal for operational expansion, a private company structure is more practical and cost-efficient.
Your decision affects:
In our experience advising cross-border clients, 90% of first-time foreign investors opt for a private limited company due to flexibility and lower regulatory burden.
Let’s break down the process clearly and practically.
Before filing any documents, clarify:
For foreign investors, most projects begin as a private limited company under FDI approval.
If the shareholders are foreign entities or individuals, you must secure approval under the Foreign Investment and Technology Transfer Act (FITTA).
Approval authority:
You’ll submit:
Without FDI approval, company registration cannot proceed for foreign shareholders.
You must:
Tip: Avoid generic names. Distinct names reduce rejection risk.
These documents define:
For foreign investors, it’s critical to align MOA objectives with FDI approval scope. A mismatch can cause regulatory delays.
Submit:
Upon approval, you receive:
Your company is now legally formed.
Register with the Inland Revenue Department (IRD) for:
Under Nepal’s Income Tax Act, companies must comply with annual corporate tax filing and audit requirements.
Foreign shareholders must:
This ensures lawful capital recognition and future profit repatriation eligibility.
Depending on your industry, you may need:
Compliance varies by sector.
| Criteria | Private Company | Public Company |
|---|---|---|
| Minimum Shareholders | 1 | 7 |
| Maximum Shareholders | 101 | Unlimited |
| Public Share Offering | Not allowed | Allowed |
| Compliance Burden | Moderate | High |
| Suitable for FDI Entry | Yes (Most Common) | Rarely used initially |
| Disclosure Requirements | Limited | Extensive |
For foreign companies, the private structure typically provides strategic flexibility and lower risk.
Many delays we see are due to misaligned documentation between DOI, OCR, and NRB.
These mistakes are avoidable with proper planning.
A private company limits shareholders and cannot offer shares publicly. A public company can raise capital from the public and has stricter compliance requirements under the Companies Act, 2063.
Yes. Foreign investors can register a private limited company after obtaining FDI approval from the Department of Industry or Investment Board Nepal.
Yes. For foreign shareholders, FDI approval must be secured before incorporation proceeds.
Typically 2–6 weeks, depending on FDI approval, documentation accuracy, and regulatory coordination.
Yes. A private company can convert into a public company by meeting minimum shareholder and compliance requirements.
Understanding the legal requirements for company registration in Nepal begins with choosing the correct private vs public company structure. For foreign investors, this decision influences regulatory approval, tax exposure, governance obligations, and long-term flexibility.
Nepal offers strong opportunities across technology, manufacturing, services, and infrastructure. But regulatory precision matters. The right structure today prevents costly restructuring tomorrow.
If you approach the process strategically, Nepal can become a highly efficient regional base for your expansion.
Planning to register your company in Nepal?
Our cross-border advisory team helps foreign investors:
👉 Book a strategy consultation today and receive a customized Nepal market entry roadmap tailored to your industry.