Choosing between a private vs public company in Nepal starts earlier than most foreign investors expect.
It begins with company name application.
In Nepal, a rejected name can delay incorporation by weeks. For foreign companies, that delay often means missed contracts, visa timelines, and banking slots.
This guide explains how private and public companies differ, how company name approval works in Nepal, and the exact strategies foreign founders use to get approved faster.
We combine legal clarity, regulatory insight, and practical tips used in real incorporations.
Before filing a name, you must choose the company type. Nepalese law treats private and public companies very differently.
Company formation in Nepal is governed by the Companies Act 2006 and administered by the Office of Company Registrar (OCR).
Both private and public companies must receive name approval before registration.
A private company is the most common structure for foreign companies entering Nepal.
Maximum 101 shareholders
Shares not offered to the public
Flexible governance
Lower compliance burden
Faster approval timelines
Subsidiaries of foreign companies
Back-office or support entities
IT, BPO, and service companies
Trading and consulting firms
Most foreign investors choose private companies due to speed and control.
A public company is designed for scale, capital markets, and public investment.
Minimum 7 shareholders
Shares can be publicly offered
Mandatory board structure
Higher disclosure requirements
Subject to securities regulations
Infrastructure projects
Banks and financial institutions
Large manufacturing ventures
IPO-driven growth strategies
For name approval, public companies face stricter scrutiny.
| Aspect | Private Company | Public Company |
|---|---|---|
| Minimum shareholders | 1 | 7 |
| Public share offering | Not allowed | Allowed |
| Name scrutiny | Moderate | High |
| Compliance level | Lower | Extensive |
| Incorporation speed | Faster | Slower |
| Foreign investor preference | Very high | Limited |
Insight:
Over 85% of foreign incorporations in Nepal choose private company status due to faster OCR approval and simpler governance.
Company name approval is not a formality.
The OCR evaluates names for:
Legal compliance
Similarity to existing companies
Sector sensitivity
Public interest concerns
A weak name choice leads to rejection, resubmission, and delays.
Before filing, check OCR’s database for:
Identical names
Phonetically similar names
Confusing abbreviations
Foreign brands often fail here.
Your proposed name must align with:
Stated objectives
Industry classification
Licensing requirements
A mismatch is a common rejection reason.
Applications are submitted through the OCR portal with:
Proposed name
Alternate name options
Company type (private or public)
Brief objective statement
The OCR reviews for compliance with the Companies Act and public policy norms.
Approved names are reserved for a limited time to complete registration.
Private company names must:
Be unique
Avoid restricted words
Reflect business purpose
Avoid misleading associations
Approval is usually faster.
Public company names face additional checks:
No implication of government backing
No exaggerated financial claims
No resemblance to regulated institutions
Higher public interest scrutiny
Expect longer review timelines.
Certain words require special approvals or are outright restricted.
Commonly flagged terms include:
Bank
Finance
Trust
Cooperative
Government
Authority
Using these without licenses almost guarantees rejection.
Combine brand + activity
Add geographic or functional identifiers
Avoid generic English-only names
Provide clear objectives
Submit multiple alternatives
Foreign investors who submit three well-structured options see higher success rates.
Foreign companies should align name strategy with:
FDI approval requirements
Banking compliance
Tax registration
Employment permits
A name that passes OCR but fails at the bank creates future risk.
Similarity to existing companies
Misleading industry signals
Use of restricted terminology
Conflict with public policy
Inconsistent objectives
Understanding these reduces iteration cycles.
Choosing between a private vs public company in Nepal affects more than name approval.
Annual filings
Tax returns
Shareholder resolutions
Public disclosures
Regulatory audits
Share issuance compliance
Securities filings
Name choice should reflect future obligations, not just launch speed.
Foreign investors value:
Predictability
Control
Speed
Lower compliance risk
Private companies deliver all four.
Public companies are typically chosen only when legally required.
The decision between a private vs public company in Nepal shapes your entire market entry.
Company name application is the first regulatory signal you send to authorities, banks, and partners.
For most foreign companies, a private company with a strategically crafted name offers faster approval, lower risk, and operational flexibility.
Getting this right from day one saves months later.
Yes, but it requires higher capital, more shareholders, and stricter regulatory oversight.
Private companies typically receive approval within a few working days. Public companies take longer.
Yes. Approved names are reserved for a limited period to complete registration.
Yes, but they must be unique and not misleading or restricted.
You must resubmit with revised or alternate names, causing delays.