If you are planning to enter the Nepali market, understanding the types of companies in Nepal is your first strategic decision.
Nepal’s company law offers several legal structures. Each structure carries different ownership rules, compliance obligations, and investment limits.
Foreign companies often choose the wrong structure at the start. This can delay approvals, restrict profit repatriation, or increase regulatory risk. This guide explains the legal classification of companies in Nepal in plain English, with a clear focus on foreign investors.
By the end, you will know which company type fits your expansion strategy, budget, and risk profile.
Company classification in Nepal is governed primarily by:
Companies Act 2006
Foreign Investment and Technology Transfer Act 2019
Office of the Company Registrar
These laws define who can invest, how companies are formed, and what ongoing compliance is required.
Choosing the right company type impacts:
Ownership and control
Foreign Direct Investment approval
Tax exposure
Profit repatriation
Exit flexibility
For foreign companies, legal classification is not just administrative. It is strategic.
Nepal legally recognizes the following types of companies:
Private Limited Company
Public Limited Company
Non-Profit Company
Branch Office
Liaison (Representative) Office
Each type serves a different business purpose.
A Private Limited Company is the most common and flexible structure in Nepal.
It is widely used by startups, foreign subsidiaries, and joint ventures.
Minimum shareholders: 1
Maximum shareholders: 101
Limited liability protection
Separate legal identity
Foreign investors can own up to 100%, subject to sector approval.
A private limited company is ideal if you want to:
Generate revenue in Nepal
Hire local employees
Repatriate profits
Maintain long-term presence
Full operational control
Clear FDI pathway
Scalable structure
Annual audits mandatory
Ongoing compliance filings
A Public Limited Company can raise capital from the public and list on the stock exchange.
Minimum shareholders: 7
No maximum shareholder limit
Higher capital threshold
Strict disclosure obligations
Public companies suit large-scale projects, infrastructure, and regulated industries.
They are less common for first-time foreign entrants.
A Non-Profit Company operates for social, charitable, or research objectives.
It cannot distribute profits to members.
Foreign funding allowed
Strict purpose limitations
Profits must be reinvested
NGOs
Development agencies
Research organizations
A Branch Office is an extension of the foreign parent company.
It does not have a separate legal identity.
Parent company bears liability
Limited scope of activities
Requires government approval
Choose a branch office if you want to:
Execute a specific contract
Deliver short-term projects
Avoid local equity structure
Cannot freely engage in commercial trading
Complex approval process
A Liaison Office represents the foreign company in Nepal.
It cannot generate revenue.
Market research
Relationship building
Coordination with head office
No sales or invoicing
Funded entirely by the parent company
| Company Type | Revenue Allowed | Foreign Ownership | Legal Liability | Best For |
|---|---|---|---|---|
| Private Limited | Yes | Up to 100% | Limited | Long-term operations |
| Public Limited | Yes | Sector-based | Limited | Large-scale projects |
| Non-Profit | No | Allowed | Limited | Social impact |
| Branch Office | Limited | 100% parent | Unlimited | Contract execution |
| Liaison Office | No | 100% parent | Unlimited | Market entry |
Foreign companies should assess:
Business objectives
Investment horizon
Regulatory tolerance
Tax planning strategy
Do you want to generate revenue in Nepal?
Do you need full ownership control?
Is your presence short-term or permanent?
Your answers point directly to the correct structure.
All company types must comply with:
Annual filings with OCR
Tax registration and returns
Labor and social security laws
Private and public companies face the highest compliance standards.
Liaison offices have lighter reporting, but stricter activity limits.
Choosing a liaison office for revenue activities
Underestimating FDI approval timelines
Ignoring sector-specific restrictions
Avoiding these mistakes saves months of delay.
This article is based on:
Nepal’s primary legislation
Practical advisory experience with foreign investors
Current regulatory practice
It is written for decision-makers, not just compliance teams.
Understanding the types of companies in Nepal is essential for a smooth market entry.
The right legal structure protects your investment and accelerates growth.
Foreign companies that plan carefully at this stage avoid costly restructuring later.
Planning to register a company in Nepal?
Speak with a Nepal market-entry specialist to select the right structure, secure approvals, and stay compliant from day one.
Yes. Many sectors allow 100% foreign ownership through a private limited company, subject to FDI approval.
Private limited companies are the most common due to flexibility and limited liability.
No. Liaison offices cannot generate revenue or issue invoices.
Typically 2 to 4 weeks, depending on approvals and documentation.
A private limited company is usually the best option for foreign startups.