If you are evaluating private vs public company in Nepal, you are not alone. Foreign companies increasingly view Nepal as a strategic base for South Asia operations. The decision between a private or public company affects control, compliance, capital access, and exit options. This guide explains both structures clearly, with a foreign-investor lens, so you can choose confidently and compliantly.
Nepal’s corporate framework is primarily governed by the Companies Act 2006, supported by sectoral laws and regulator directives. For foreign investors, the private vs public company in Nepal decision is foundational.
A private limited company is the most common entry vehicle for foreign businesses.
Key characteristics
1–101 shareholders
Share transfers are restricted
No public share offering
Limited liability protection
Why foreign companies prefer it
Faster incorporation
Lower compliance costs
Stronger ownership control
A public limited company can raise capital from the public and is typically used for large-scale operations.
Key characteristics
Minimum 7 shareholders
Shares may be publicly offered
Mandatory regulatory oversight
Higher disclosure standards
| Aspect | Private Limited Company | Public Limited Company |
|---|---|---|
| Minimum shareholders | 1 | 7 |
| Maximum shareholders | 101 | Unlimited |
| Public fundraising | Not allowed | Allowed |
| Regulatory burden | Moderate | High |
| Governance complexity | Low–Medium | High |
| Typical use case | Foreign subsidiaries, back offices | Banks, hydropower, large enterprises |
Insight: Over 85% of foreign-owned entities in Nepal choose the private limited route due to speed, control, and predictability.
When weighing private vs public company in Nepal, private limited companies win on practicality.
Speed to market
Incorporation typically completes within weeks, not months.
Ownership control
No pressure from public shareholders or market scrutiny.
Lower compliance costs
Fewer disclosures and simplified governance.
FDI-friendly structure
Well-aligned with foreign investment approval processes.
Exit flexibility
Share transfers can be negotiated privately.
Public companies are not wrong just specialized.
A public structure may suit you if:
You plan a large-scale capital raise in Nepal
Your sector requires public credibility
You intend a future IPO on NEPSE
For most foreign service, tech, and outsourcing firms, this is unnecessary.
Annual financial statements
Annual general meeting
Tax filings
Social security contributions
Quarterly disclosures
Independent directors
Regulatory audits
Capital market supervision
Practical takeaway: Compliance intensity is the biggest operational difference in the private vs public company in Nepal decision.
Both structures are taxed similarly at the corporate level, but compliance execution differs.
Common taxes
Corporate income tax
Withholding tax
VAT (if applicable)
Payroll taxes
Private companies benefit from simpler audit and reporting cycles.
Private limited companies dominate:
IT and software development
BPO and back-office operations
Consulting and professional services
Manufacturing for export
Public companies dominate:
Commercial banking
Insurance
Hydropower
Large infrastructure
Ask yourself:
Do we need public capital in Nepal?
How much control do we require?
What compliance burden can we manage?
Is Nepal a cost center or revenue hub?
If Nepal is a strategic delivery or support base, a private company is usually optimal.
Over-engineering governance early
Choosing public structure for “prestige”
Ignoring compliance cost projections
Misaligning structure with FDI approvals
Avoiding these mistakes starts with understanding private vs public company in Nepal clearly.
For most foreign investors, yes. Private companies offer faster setup, lower compliance, and better control.
Yes, subject to sectoral FDI approvals and investment thresholds.
Private companies typically register within 2–4 weeks after approvals.
Yes. Conversion is legally permitted but involves regulatory approvals.
Yes. Public companies face significantly higher legal, audit, and disclosure costs.
Choosing between a private vs public company in Nepal is not about size or ambition. It is about alignment. For most foreign companies, private limited companies deliver speed, control, and compliance efficiency. Public companies are powerful tools, but only when capital markets are central to your strategy.