Choosing between a private vs public company in Nepal is one of the first and most strategic decisions foreign companies make when entering the Nepali market. The structure you select affects ownership control, compliance burden, capital requirements, fundraising flexibility, and long-term scalability.
For overseas investors, founders, and multinational groups, Nepal offers a regulated yet increasingly investor-friendly environment. However, misunderstanding company types can lead to delays, compliance exposure, or unnecessary costs. This guide breaks down the differences in plain language, grounded in Nepali law and real-world execution.
By the end, you’ll know which structure fits your market entry goals and how to register it correctly the first time.
Under Nepal’s corporate framework, companies are broadly classified into private companies and public companies. Both are governed by the Companies Act and supervised by the Office of Company Registrar.
While both provide limited liability protection, their intent, compliance expectations, and capital structures differ significantly.
A private company in Nepal is the most common structure for foreign investors establishing operational subsidiaries, joint ventures, or back-office entities.
Private companies are ideal when control, speed, and regulatory simplicity matter.
Foreign investors typically choose private companies because they offer:
In practice, over 90% of foreign direct investment entities in Nepal are private companies.
A public company in Nepal is designed for larger ventures intending to raise capital from the public or list on the stock exchange.
Public companies face stricter regulatory scrutiny and higher ongoing compliance costs.
Public companies are suitable when:
For most foreign entrants, this structure is not necessary at the market entry stage.
| Criteria | Private Company | Public Company |
|---|---|---|
| Minimum shareholders | 1 | 7 |
| Maximum shareholders | 50 | Unlimited |
| Share transfer | Restricted | Free |
| Public fundraising | Not allowed | Allowed |
| Compliance intensity | Low–moderate | High |
| Ideal for foreign investors | Yes | Rarely |
| Incorporation timeline | Faster | Slower |
| Regulatory approvals | FDI + OCR | OCR + additional regulators |
Insight: Foreign companies often start as private companies and convert later if public fundraising becomes necessary.
Company incorporation in Nepal is anchored in several core statutes and regulators:
These laws define capital thresholds, ownership rights, and repatriation mechanisms.
Below is a simplified, execution-focused view of how foreign companies register a private or public company in Nepal.
Typical documents include:
Foreign-owned companies require approval from the Department of Industry under FITTA.
Upon approval, the company is legally incorporated.
Nepal does not prescribe a fixed minimum capital for private companies in most sectors. However, foreign investors must meet sector-specific FDI thresholds.
Public companies typically require higher capitalization due to regulatory expectations and public investor protection norms.
For most foreign investors, the private company structure significantly reduces compliance friction.
From a tax perspective, both structures are taxed similarly under Nepal’s Income Tax Act. However, public companies may face:
The corporate tax rate is sector-dependent, not structure-dependent.
Avoid these frequent pitfalls:
A properly structured private company avoids most of these issues.
Choose a private company in Nepal if you want:
Consider a public company in Nepal only if:
For foreign companies, the private vs public company in Nepal decision is clear in most cases. A private company offers the optimal balance of control, compliance efficiency, and scalability at entry. Public companies serve a specific purpose but are rarely suitable for first-time market entry.
Getting this decision right at incorporation saves time, money, and regulatory friction later.
Yes. Most sectors allow 100% foreign ownership, subject to FDI approval and sectoral rules.
No. Large investments can still operate as private companies unless public fundraising is planned.
Private company registration typically takes 2–4 weeks if documents are complete.
Yes. Conversion is legally permitted with regulatory approvals.
For most foreign companies, a private company is the preferred and most efficient structure.