Navigating Company Registration in Nepal: Costs and Fees Explained

If you are a foreign investor evaluating private vs public company in Nepal, understanding registration costs, compliance duties, and long-term implications is critical. Nepal offers a clear legal framework for company formation, but the right structure depends on your capital plan, shareholder strategy, and growth timeline.

This guide breaks down costs, fees, and regulatory obligations for private and public companies in Nepal. It is written for foreign founders, CFOs, and legal teams who want clarity, predictability, and risk control before committing capital.

Private vs Public Company in Nepal: The Core Difference

When comparing private vs public company in Nepal, the distinction is not just about size. It affects ownership limits, capital thresholds, disclosure rules, and total cost of compliance.

What Is a Private Company in Nepal?

A private company in Nepal is designed for closely held ownership.

Key characteristics

• 1 to 50 shareholders

• Shares cannot be publicly offered

• Lower paid-up capital flexibility

• Reduced disclosure requirements

This structure is commonly used by:

• Foreign subsidiaries

• Back-office and captive units

• Professional services firms

• Technology and outsourcing companies

What Is a Public Company in Nepal?

A public company is designed for larger capital pooling and potential public fundraising.

Key characteristics

• Minimum 7 shareholders

• Shares may be offered to the public

• Higher minimum paid-up capital

• Stricter governance and reporting

Public companies are typically used for:

• Large infrastructure projects

• Financial institutions

• Manufacturing at scale

• IPO-ready ventures

Legal Framework Governing Company Registration in Nepal

Company formation is governed primarily by:

• Companies Act, 2006

• Company Directives issued by the Office of Company Registrar

• Income Tax Act, 2002

• Industrial Enterprises Act, 2020

These laws define registration fees, capital rules, audit thresholds, and annual compliance.

Cost of Registering a Private Company in Nepal

Government Registration Fees (Private Company)

Registration fees are linked to authorized capital. Below is a practical range commonly seen by foreign investors.

Insight: Most foreign-owned private companies register between NPR 1–10 million to balance credibility and cost.

Additional Setup Costs

Beyond OCR fees, expect:

• Legal drafting and incorporation support

• PAN registration with tax authorities

• Municipal business license

• Company seal and statutory registers

Typical total setup range: USD 800–2,000 depending on complexity.

Cost of Registering a Public Company in Nepal

Minimum Capital Requirement

A public company must meet statutory minimum paid-up capital, which is significantly higher than a private company. This alone makes it unsuitable for most early-stage foreign investors.

Registration and Regulatory Fees

Public companies incur:

• Higher OCR registration fees

• Prospectus approval costs (if issuing shares)

• Securities-related compliance expenses

Typical total setup range: USD 3,000–7,000+, excluding sector-specific licenses.

Private vs Public Company in Nepal: Cost Comparison Table

Ongoing Annual Compliance Costs

Private Company Annual Costs

A private company must prepare:

• Annual financial statements

• Income tax returns

• Statutory filings with OCR

If turnover exceeds audit thresholds, an external audit is mandatory.

Typical annual compliance cost: USD 600–1,500

Public Company Annual Costs

Public companies face:

• Mandatory statutory audits

• Enhanced disclosures

• Board and shareholder reporting

• Regulatory filings

Typical annual compliance cost: USD 2,500–5,000+

Taxation Considerations for Foreign Companies

Regardless of structure, corporate tax applies.

Key tax points

• Standard corporate tax rate generally applies

• Withholding taxes on dividends and service payments

• Transfer pricing rules for related-party transactions

Private companies are easier to manage for cross-border tax planning due to simpler structures.

When a Private Company Makes More Sense for Foreign Investors

For most foreign entrants, a private company is optimal because it offers:

• Faster incorporation

• Lower capital lock-in

• Reduced governance overhead

• Easier exit or restructuring

Typical use cases

1. Regional delivery or back-office operations

2. Nepal market entry testing

3. Captive IT or shared services

4. Professional and consulting services

When a Public Company Is the Right Choice

A public company is appropriate only if:

• You plan public fundraising in Nepal

• You operate in regulated sectors requiring it

• You need broad shareholder participation

For foreign investors, this is usually a second-phase structure, not an entry vehicle.

Hidden Costs Foreign Companies Often Miss

Many investors underestimate:

• Translation and notarization costs

• Bank account opening delays

• Industry-specific approvals

• Audit readiness requirements

Planning these early prevents timeline overruns.

Step-by-Step: Company Registration Process in Nepal

Private or public, the steps are broadly similar

1. Name reservation with OCR

2. Drafting constitutional documents

3. Submission to OCR

4. PAN and tax registration

5. Municipal licensing

6. Bank account activation

The difference lies in documentation depth and review scrutiny.

Choosing Between Private vs Public Company in Nepal

Your decision should be guided by:

• Capital strategy

• Shareholder structure

• Compliance appetite

• Five-year growth plan

For 90 percent of foreign companies, a private company is the correct starting point.

Conclusion

Understanding private vs public company in Nepal is essential before investing. While both structures are legally sound, their cost, complexity, and flexibility differ sharply.

For foreign companies entering Nepal, a private company delivers speed, control, and cost efficiency. Public companies serve a narrower, capital-intensive purpose. Choosing correctly at the start saves money, time, and regulatory friction later.

Frequently Asked Questions

Is a private company cheaper than a public company in Nepal?

Yes. A private company has lower registration fees, lower capital requirements, and reduced annual compliance costs.

Can a foreigner own 100 percent of a private company in Nepal?

Yes, subject to sectoral FDI rules and approval where applicable.

Is audit mandatory for private companies?

Only if turnover or capital crosses statutory thresholds. Public companies must be audited annually.

Can a private company convert into a public company later?

Yes. Conversion is permitted with regulatory approval and additional compliance.

How long does company registration take in Nepal?

Typically 7–15 working days for private companies if documents are in order.