If you are evaluating Private vs public company in Nepal, you are already thinking strategically. The legal structure you choose will shape your capital access, regulatory exposure, and long-term scalability.
Nepal’s economy is opening steadily to foreign investors under the Foreign Investment and Technology Transfer Act (FITTA 2019). Company registration is governed by the Companies Act. Public market oversight sits with the Securities Board of Nepal (SEBON).
Most overseas investors do not struggle with whether to enter Nepal.
They struggle with how to structure that entry correctly.
This guide gives you a board-level breakdown of:
Nepal is transitioning from a remittance-driven economy to a production-oriented growth model. Priority sectors include:
According to Nepal Rastra Bank reports, foreign direct investment commitments have steadily increased since FITTA 2019 simplified approval procedures.
Foreign investors benefit from:
Your entity structure determines how effectively you leverage these advantages.
The Private vs public company in Nepal debate starts with the Companies Act 2006.
Both structures are incorporated through the Office of the Company Registrar (OCR).
But they differ fundamentally in capital raising and governance obligations.
A private company is a closely held entity with restricted share transfer rights.
Private companies are the most common vehicle for FDI in Nepal.
They offer:
A public company may offer shares to the general public and list on the stock exchange.
Nepal’s stock exchange is the Nepal Stock Exchange (NEPSE).
Public companies are common in:
| Factor | Private Company | Public Company |
|---|---|---|
| Minimum Shareholders | 1 | 7 |
| Maximum Shareholders | 101 | Unlimited |
| Public Share Offering | Not allowed | Allowed |
| Regulatory Oversight | OCR | OCR + SEBON |
| Capital Raising | Private equity, FDI | IPO, public issue |
| Disclosure Level | Limited | High |
| Cost of Compliance | Moderate | High |
| Governance Complexity | Flexible | Structured & regulated |
| Suitable For | Subsidiaries, BPO, manufacturing | Large projects, capital-intensive sectors |
If your business requires domestic capital mobilization, public may unlock funding.
Otherwise, private companies provide more control.
In addition to the above:
Compliance costs increase significantly.
A public company becomes attractive when:
Hydropower developers often use this model.
Both structures fall under Nepal’s corporate income tax regime. The standard rate is generally 25%, unless sector incentives apply.
Under FITTA:
Public companies face greater scrutiny in dividend announcements.
Private companies allow more flexible timing.
Best fit: Private company.
Best fit: Public company.
Best fit: Private company.
Best fit: Public company.
Structure must match strategy.
When comparing Private vs public company in Nepal, foreign investors must think beyond incorporation.
Structure affects:
For most foreign subsidiaries, private company structure offers control and flexibility.
Public company structure becomes powerful when capital scaling and market participation are strategic goals.
If you are planning overseas investment in Nepal, the right structure is your first and most important decision.
Yes. FITTA 2019 allows 100% foreign ownership in most sectors, subject to minimum investment thresholds.
Yes. Conversion is allowed under the Companies Act 2006, subject to compliance requirements.
No. A company may register as public without immediate IPO but must follow public governance rules.
Generally no. Corporate tax rates are similar unless sector incentives apply.
Public company structure is commonly used for capital mobilization in hydropower.