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.
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.
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
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
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.
Registration fees are linked to authorized capital. Below is a practical range commonly seen by foreign investors.
| Authorized Capital (NPR) | Approx. OCR Fee |
|---|---|
| Up to 100,000 | NPR 1,000 |
| 100,001 – 500,000 | NPR 4,500 |
| 500,001 – 2,500,000 | NPR 9,500 |
| 2,500,001 – 10,000,000 | NPR 16,000 |
| Above 10,000,000 | Scales upward |
Insight: Most foreign-owned private companies register between NPR 1–10 million to balance credibility and cost.
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.
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.
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.
| Factor | Private Company | Public Company |
|---|---|---|
| Shareholders | 1–50 | Minimum 7 |
| Public share issue | Not allowed | Allowed |
| Minimum capital | Flexible | Statutory minimum |
| Registration cost | Low | High |
| Annual compliance cost | Moderate | High |
| Suitable for foreign subsidiaries | Yes | Rarely |
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 companies face:
Mandatory statutory audits
Enhanced disclosures
Board and shareholder reporting
Regulatory filings
Typical annual compliance cost: USD 2,500–5,000+
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.
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
Regional delivery or back-office operations
Nepal market entry testing
Captive IT or shared services
Professional and consulting services
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.
Many investors underestimate:
Translation and notarization costs
Bank account opening delays
Industry-specific approvals
Audit readiness requirements
Planning these early prevents timeline overruns.
Private or public, the steps are broadly similar
Name reservation with OCR
Drafting constitutional documents
Submission to OCR
PAN and tax registration
Municipal licensing
Bank account activation
The difference lies in documentation depth and review scrutiny.
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.
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.
Yes. A private company has lower registration fees, lower capital requirements, and reduced annual compliance costs.
Yes, subject to sectoral FDI rules and approval where applicable.
Only if turnover or capital crosses statutory thresholds. Public companies must be audited annually.
Yes. Conversion is permitted with regulatory approval and additional compliance.
Typically 7–15 working days for private companies if documents are in order.