Foreign investors often start with one key structural question: private vs public company in Nepal — which is better for market entry, fundraising, and intellectual property protection?
This decision shapes governance, taxation, compliance exposure, and long-term scalability. It also affects how you register trademarks, protect patents, structure licensing, and secure investor confidence.
In this 2026 guide, we combine Nepal’s intellectual property framework with a practical comparison of company structures under the Companies Act 2006 and related laws. If you are entering Nepal, expanding operations, or restructuring for investment, this article will help you choose wisely.
Intellectual property rights (IPR) in Nepal are governed primarily by:
Your company type determines:
A foreign technology company, garment manufacturer, or digital services firm must align its legal entity with its IP strategy.
The primary legal framework is the Companies Act 2006. It defines both private and public limited companies.
A private limited company:
It is the most common entry structure for foreign investors.
A public limited company:
Public companies are ideal for large-scale operations and capital markets access.
| Criteria | Private Company | Public Company |
|---|---|---|
| Minimum Shareholders | 1 | 7 |
| Maximum Shareholders | 101 | Unlimited |
| Public Share Offering | Not allowed | Allowed |
| Regulatory Burden | Moderate | High |
| Audit & Disclosure | Required | Stricter standards |
| Ideal For | Foreign SMEs, tech, services | Manufacturing, large infra |
| IPO Potential | No | Yes |
| Governance Structure | Flexible | Formal board structure |
Strategic Insight:
If your goal is market testing, IP registration, and controlled expansion, a private company offers agility. If you plan to raise institutional capital or list shares, public status becomes advantageous.
Trademarks are registered under the Patent, Design and Trade Mark Act 1965 through the Department of Industry.
Registration validity: 7 years, renewable indefinitely.
Nepal follows a first-to-file principle. Early registration is critical.
Patent protection applies to inventions that are:
Validity: 7 years, renewable twice.
Foreign applicants must appoint a local agent.
The Copyright Act 2002 protects:
Copyright protection is automatic upon creation.
Registration strengthens enforcement.
For tech and software firms, private structures often provide better IP containment during early growth.
Foreign companies must also consider tax exposure under:
Corporate tax rate (general): 25%
Special industries may qualify for incentives.
Public companies face stricter financial reporting obligations.
Choose a private company if:
Consider public status if:
| Factor | Private Company | Public Company |
|---|---|---|
| Control | High | Diluted |
| Capital Access | Limited | Broad |
| Regulatory Exposure | Lower | Higher |
| IPO Potential | None | Yes |
| IP Confidentiality | Strong | Moderate |
| Compliance Cost | Lower | Higher |
Conclusion from matrix:
For 80% of foreign SMEs entering Nepal, a private limited company remains optimal.
A SaaS firm registering software IP would benefit from:
Public listing at early stage would increase compliance burden unnecessarily.
Early legal structuring prevents future disputes.
Nepal is a member of:
Although enforcement mechanisms are developing, courts recognize registered IP rights.
Foreign investors increasingly use arbitration clauses for cross-border disputes.
| Expense Category | Private Company | Public Company |
|---|---|---|
| Incorporation | Lower | Higher |
| Annual Compliance | Moderate | High |
| Audit | Mandatory | Mandatory |
| IPO Cost | Not applicable | Significant |
Professional structuring reduces hidden costs.
A private company limits shareholders and cannot raise funds from the public. A public company can offer shares publicly and list on the stock exchange.
Yes, subject to sectoral approval under FITTA 2019 and minimum investment thresholds.
Not mandatory, but strongly recommended. Nepal follows a first-to-file system.
Typically 1–3 weeks, depending on documentation and foreign investment approvals.
Yes, subject to compliance with Companies Act requirements and capital restructuring.