Private vs public company in Nepal is one of the first strategic decisions foreign companies must make before entering the Nepali market. The choice affects ownership limits, compliance burden, fundraising ability, and long-term scalability.
Nepal now offers a largely online company registration process, making market entry faster and more transparent for foreign investors. However, the legal and practical differences between private and public companies remain misunderstood.
This guide explains those differences clearly, with a strong focus on foreign companies evaluating Nepal for outsourcing, market entry, or long-term investment.
Choosing the wrong structure in Nepal creates friction later. It can limit foreign ownership, block capital repatriation, or increase compliance costs.
Foreign companies typically look for:
In most cases, a private limited company is the preferred entry vehicle. A public company only makes sense in specific scenarios.
Under Nepal’s corporate framework, companies are broadly classified into:
This article focuses on private vs public company in Nepal, as these are the only two viable options for commercial foreign investment.
A private limited company is the most common business structure in Nepal. It is designed for closely held ownership and operational flexibility.
Private companies in Nepal offer:
For foreign companies setting up:
A private company is usually the optimal choice.
A public limited company is structured for large-scale operations and public fundraising.
A public company in Nepal is suitable when:
For most foreign SMEs, this structure is unnecessarily complex.
| Aspect | Private Company | Public Company |
|---|---|---|
| Minimum shareholders | 1 | 7 |
| Maximum shareholders | 101 | Unlimited |
| Public share issuance | Not allowed | Allowed |
| Minimum capital | Flexible | Statutory minimum |
| Compliance burden | Low | High |
| Best for foreign SMEs | Yes | Rarely |
Insight: Over 90% of foreign-owned companies in Nepal are registered as private companies due to flexibility and speed.
Nepal has digitized much of its company incorporation workflow.
This process applies to both private and public companies, though public companies face more scrutiny.
Foreign companies should expect additional approvals if foreign investment is involved.
Foreign investment in Nepal is regulated and sector-specific.
Private companies allow simpler foreign investment structuring, especially for wholly owned subsidiaries.
For foreign companies, the compliance gap is significant.
Private companies are materially cheaper to operate annually.
Public companies incur recurring costs that are only justified at scale.
Both private and public companies are taxed similarly in Nepal.
Key points:
The company type does not change the tax rate, but compliance execution differs.
Private companies offer:
Public companies require:
Foreign investors typically prefer control certainty, favoring private structures.
A public company may be justified if:
Otherwise, a private company is more efficient.
For most foreign companies entering Nepal:
Conversion is legally possible later, but starting public is hard to reverse.
Choosing between a private vs public company in Nepal is a strategic decision, not just a legal one.
For foreign companies, private companies offer:
Public companies serve a narrow, capital-intensive purpose.
If your goal is efficient market entry, operational setup, or regional support, a private company is almost always the right starting point.
Yes. For most foreign companies, private companies offer lower compliance, faster setup, and better control.
Yes, in sectors open to foreign investment and with proper approvals.
Typically 7–14 working days, excluding sector-specific approvals.
Public companies require significantly higher statutory capital than private companies.
Yes. Nepalese law allows conversion after meeting capital and compliance thresholds.