If you are evaluating Private vs public company in Nepal, your structure decision will shape tax exposure, governance control, capital strategy, and exit options. For foreign companies entering Nepal in 2026, this is not just a registration choice. It is a long-term strategic decision.
Nepal is positioning itself as a competitive South Asian investment destination. Reforms under the Foreign Investment and Technology Transfer Act (FITTA 2019) and the Industrial Enterprises Act have modernized the FDI framework. Company incorporation remains governed by the Companies Act.
Yet, the core question remains:
Should a foreign investor register a private limited company or a public limited company in Nepal?
This guide breaks it down clearly, practically, and strategically for global decision-makers.
Before comparing structures, it is important to understand the regulatory architecture.
Foreign investment in Nepal is regulated primarily by:
FDI approval is mandatory before capital injection. After approval, the company must be incorporated and registered for tax, VAT (if applicable), and Social Security Fund compliance.
Nepal Rastra Bank approval is required for capital inflow and repatriation recording.
The structure you choose directly impacts:
Under the Companies Act, Nepal recognizes two primary limited liability corporate forms:
Both provide limited liability protection. But their governance and fundraising capabilities differ significantly.
Below is a practical comparison designed specifically for foreign investors.
| Feature | Private Limited Company | Public Limited Company |
|---|---|---|
| Minimum shareholders | 1–101 | Minimum 7 |
| Public share offering | Not allowed | Allowed |
| Share transfer | Restricted | Freely transferable |
| Minimum paid-up capital | No fixed statutory minimum (subject to sector rules) | Higher threshold required |
| Regulatory scrutiny | Moderate | High |
| Suitable for | Subsidiaries, JV, SMEs, service companies | Large projects, capital markets access |
| Listing possibility | No | Yes (if compliant) |
| Governance structure | Flexible | Formal board governance required |
In practice, over 90% of foreign investors entering Nepal choose a private limited company.
Public companies are typically used for:
A private limited company is the most common entry structure for foreign subsidiaries.
Foreign investors value:
This structure is ideal for:
A public limited company is designed for larger capital structures and public participation.
Public companies face stricter regulatory scrutiny. They must comply with detailed disclosure and reporting obligations.
Under FITTA 2019, the general minimum FDI threshold is NPR 20 million (subject to change by regulation).
However:
Foreign investors should evaluate:
In addition to the above:
Public companies operate under significantly greater transparency obligations.
Nepal’s corporate tax regime remains competitive.
Under the Income Tax Act:
Tax treatment does not differ materially between private and public companies.
However, public companies may benefit from:
Choose a private limited company if:
For most FDI entries into Nepal, this is the optimal route.
Choose a public limited company if:
Hydropower developers frequently adopt this structure.
Structure selection affects:
A poorly structured public company can dilute foreign control.
A poorly drafted private company charter can restrict exit.
The legal architecture must align with your capital strategy.
The typical FDI incorporation steps include:
Private companies move faster.
Public companies require additional governance structuring.
| Objective | Best Structure |
|---|---|
| 100% ownership control | Private Company |
| Public fundraising | Public Company |
| Simple compliance | Private Company |
| Large infrastructure financing | Public Company |
| Fast market entry | Private Company |
Most foreign subsidiaries in Nepal choose control over public capital access.
According to official government data, the majority of foreign investment approvals are for small and medium-scale enterprises.
Common sectors include:
Private limited companies dominate these registrations.
Public companies are typically linked to capital-intensive projects.
Proper structuring avoids long-term friction.
Yes. FITTA 2019 permits 100% foreign ownership in most sectors, subject to the negative list.
Not always, but many large hydropower projects adopt public company structure due to financing needs.
A private limited company is easier due to fewer disclosure and governance obligations.
Yes. Conversion is allowed under the Companies Act, subject to compliance.
No. Corporate tax rates apply equally unless sector incentives apply.
When comparing Private vs public company in Nepal, most foreign companies entering Nepal in 2026 will benefit from a private limited company structure.
It offers:
Public companies make sense only for capital-intensive projects.
If you are evaluating market entry, structure selection should align with your investment scale, governance appetite, and long-term capital strategy.
Choosing the right structure today prevents regulatory friction tomorrow.