If you are a foreign investor, choosing between a private vs public company in Nepal is one of the earliest decisions you will make and one of the hardest to reverse. This choice quietly determines your FDI approval path, capital structure, repatriation rights, compliance burden, and even exit flexibility.
Many foreign companies rush this decision. They assume “private company” is always simpler. Or they assume “public company” is required for scale. In Nepal, both assumptions can be costly.
This guide gives you the most authoritative, practical explanation available grounded in Nepal’s FDI laws, negative lists, and real investor outcomes—so you choose the structure that actually supports your strategy.
Under the Companies Act, 2006, Nepal recognizes two main corporate forms relevant to foreign investors.
A private limited company is the most common entry structure for foreign investors.
Key characteristics:
For most foreign-owned subsidiaries, this is the default choice.
A public limited company is a more regulated structure designed for capital raising and broader ownership.
Key characteristics:
This structure is rarely chosen unless legally required or strategically necessary.
For foreign companies, incorporation is only half the story. The real gatekeeper is foreign investment approval under Nepal’s FDI framework.
FDI is governed primarily by:
Your company type directly affects how these regulators assess control, risk, and long-term intent.
Before debating private vs public company structures, foreign investors must confirm whether their sector is even open to FDI.
Nepal maintains a Negative List, updated periodically, that blocks or restricts foreign ownership in specific sectors.
Foreigners cannot invest in:
These restrictions apply regardless of company type.
Some sectors are open only under specific conditions, such as:
In these cases, company structure becomes critical.
| Criteria | Private Company | Public Company |
|---|---|---|
| Typical FDI use | Most foreign subsidiaries | Regulated or capital-heavy sectors |
| Shareholders | Up to 50 | Minimum 7 |
| Share transfer | Restricted | Freely transferable |
| Disclosure burden | Lower | High |
| IPO eligibility | Not allowed | Allowed |
| FDI approval complexity | Moderate | High |
| Best for | Market entry, ops, services |
Insight: Over 80 percent of foreign investors entering Nepal choose a private company unless forced otherwise.
For most foreign companies, a private company offers the best risk-adjusted entry.
For first-time investors, this structure minimizes irreversible exposure.
Despite the complexity, some scenarios require a public company.
In these cases, regulators view public companies as offering greater transparency and stakeholder protection.
One of the most misunderstood aspects of private vs public company in Nepal is how it affects profit repatriation.
A private company with clean records repatriates profits more easily than a poorly structured public company.
Regardless of structure, foreign-owned companies face higher scrutiny.
Key expectations include:
Public companies face significantly higher governance thresholds.
Here’s where things often go wrong.
Most regulatory pain comes from early structural shortcuts.
Regulators assess foreign companies on three dimensions:
Your company type sends a signal across all three.
Before you incorporate, answer these questions:
If you answered “no” to most, a private company is usually the correct choice.
Yes. Most foreign investors enter Nepal through a private limited company under FITTA 2019.
Only in specific regulated sectors like hydropower or financial services.
Generally NPR 20 million, subject to sector-specific rules.
Yes, if FDI and NRB approvals are properly completed.
Private companies offer simpler exits through share transfers or liquidation.
The private vs public company in Nepal decision is not about paperwork. It is about control, compliance, and capital mobility.
For most foreign companies, a private company provides speed, flexibility, and regulatory clarity. Public companies should be chosen only when strategy or regulation demands it.
If you are planning market entry, get the structure right before capital moves. Fixing it later is far harder—and far more expensive.