Private vs public company in Nepal is one of the first—and most consequential—decisions foreign companies face when entering the Nepali market. The choice affects capital strategy, governance, disclosure, compliance cost, and long-term scalability. In Nepal, public enterprises play a visible role in development, while private companies dominate market entry for foreign investors. This guide cuts through the complexity with a practical, law-aligned comparison so you can choose confidently.
Nepal welcomes foreign investment, but it regulates corporate form carefully. Your structure determines:
Who can invest and how much
How capital is raised and reported
Governance standards and audit scope
Ongoing disclosure and compliance burden
Exit options and reputational signaling
Choosing incorrectly can slow approvals, inflate costs, or constrain growth.
Company formation and operations are governed primarily by Companies Act, 2006, alongside tax, labor, and sectoral regulations. Foreign investment overlays include FITTA 2019, the Industrial Enterprises Act, NRB directives, and securities rules for listed entities.
Key regulators you will encounter
Office of Company Registrar (OCR)
Inland Revenue Department (IRD)
Nepal Rastra Bank (NRB)
Securities Board of Nepal (for public/listed entities)
A private company is the most common vehicle for foreign investors entering Nepal.
Shareholders: 1 to 101
Share transfer: Restricted by articles
Capital raising: Private placements only
Disclosure: Limited public disclosure
Control: Concentrated and flexible
Market entry and pilot operations
Back-office and shared services
IT, consulting, manufacturing, and trading
Joint ventures with local partners
Faster incorporation and approvals
Lower compliance and audit costs
Greater control over ownership and decisions
Easier restructuring during early growth
A public company can raise capital from the public and may list on NEPSE.
Shareholders: Minimum 7, no maximum
Share transfer: Freely transferable
Capital raising: Public issues allowed
Disclosure: High transparency and reporting
Governance: Board committees and independent oversight
Infrastructure and energy projects
Banking and financial services
Telecom, hydropower, large manufacturing
Long-term, capital-intensive ventures
Public enterprises in Nepal are often positioned as development catalysts. For foreign investors, this can unlock scale, credibility, and access to domestic capital markets.
| Dimension | Private Company | Public Company |
|---|---|---|
| Minimum shareholders | 1 | 7 |
| Maximum shareholders | 101 | Unlimited |
| Capital raising | Private only | Public and private |
| Disclosure level | Low | High |
| Audit & governance | Basic | Extensive |
| Incorporation timeline | Faster | Longer |
| Ongoing compliance cost | Lower | Higher |
| Best for | Market entry | Large-scale expansion |
Insight: Many foreign investors start private and convert to public once scale, revenue stability, and governance maturity are achieved.
Choose a private company if you value speed, flexibility, and cost efficiency.
Ideal scenarios
Testing demand or building a local team
Providing services to offshore group entities
Operating as a cost center or captive unit
Planning staged investment tranches
Why it works
Fewer filings and approvals
Simpler board and shareholder mechanics
Easier profit repatriation planning
Choose a public company when capital scale and public trust are essential.
Ideal scenarios
Capital-intensive projects requiring local funding
Regulated sectors favoring public scrutiny
Long-term infrastructure and utilities
Brand signaling to consumers and partners
Trade-off
Higher transparency brings credibility, but also higher costs and scrutiny.
Foreign ownership is generally permitted, subject to sectoral caps and approvals. Capital can be injected as equity or permissible instruments, routed through NRB-approved channels. Public companies add securities regulations, prospectus approvals, and ongoing market disclosures.
Key considerations
Sector eligibility under FITTA
Minimum capitalization norms
Repatriation mechanics and timelines
Related-party transactions
Small board
Flexible shareholder agreements
Annual audit and tax filings
Independent directors
Audit, risk, and remuneration committees
Quarterly and annual disclosures
Market conduct and insider rules
Tip: Build public-ready governance early, even in a private company.
Both structures are subject to corporate income tax, withholding taxes, VAT (if applicable), and payroll taxes. Public companies face additional disclosure around financial performance and related-party dealings.
What foreign CFOs should plan for
Transfer pricing documentation
Payroll and social security compliance
Audit readiness and timelines
Use this numbered checklist to decide:
Capital needs: Private funding or public markets?
Timeline: Speed to market vs long approvals?
Control: Concentrated vs dispersed ownership?
Compliance appetite: Lean vs robust governance?
Exit strategy: Private sale vs public liquidity?
If three or more answers favor speed and control, start private.
Choosing public status too early
Underestimating disclosure costs
Ignoring sector-specific caps
Weak shareholder agreements
Poor tax and repatriation planning
Avoid these with
Pre-incorporation structuring
Clear governance roadmaps
Local legal and tax advisory
Public companies and listed enterprises:
Mobilize domestic savings
Fund infrastructure and energy
Improve governance standards
Attract institutional investors
For foreign companies, aligning with this ecosystem can accelerate scale and legitimacy.
Most foreign investors start with a private company for speed and control, then convert later.
Yes. Conversion is permitted after meeting capital, governance, and approval requirements.
Yes, subject to sector rules and regulatory approvals.
Yes. Expect higher audit, disclosure, and governance costs.
Private companies are faster. Public companies require additional approvals and timelines.
The private vs public company in Nepal decision should align with your capital strategy, risk tolerance, and growth horizon. For most foreign companies, a private structure offers the fastest, safest entry. Public company status becomes powerful when scale and capital access matter most.