Public Limited Company in Nepal: Requirements & Features

If you are a foreign investor planning market entry, understanding the types of companies in Nepal is your first strategic decision. Nepal’s corporate framework offers multiple structures, each with distinct compliance, ownership, and capital implications. Among them, the Public Limited Company in Nepal stands out for large-scale investment, capital raising, and long-term growth. This guide breaks down all company types, with a deep focus on public companies, so you can choose the structure that aligns with your expansion goals.

Overview of Company Structures Under Nepal Law

Nepal’s corporate regime is governed primarily by the Companies Act, administered by the Office of Company Registrar in Nepal.

Main Types of Companies in Nepal

Foreign companies can engage through the following legally recognized forms:

1. Private Limited Company (Pvt. Ltd.)

2. Public Limited Company (PLC)

3. Branch Office of a Foreign Company

4. Liaison (Representative) Office

5. Non-Profit / Not-for-Profit Company

Each structure serves a different purpose, risk appetite, and investment horizon.

Public Limited Company in Nepal: Definition

A Public Limited Company in Nepal is a corporate entity allowed to invite the public to subscribe to its shares. It is designed for businesses seeking large capital bases, institutional investors, or future listing prospects.

This structure is commonly used by:

• Banks and financial institutions

• Insurance companies

• Hydropower and infrastructure firms

• Manufacturing and large trading companies

Key Legal Requirements for a Public Limited Company in Nepal

To register a public company, foreign investors must meet stricter thresholds than private entities.

Statutory Requirements

• Minimum shareholders: 7

• Minimum directors: 3

• Minimum paid-up capital: NPR 10 million (sector-specific thresholds may apply)

• Name approval and incorporation: Mandatory via OCR

• Public prospectus: Required for public share issuance

Core Features of a Public Limited Company in Nepal

Public companies differ structurally and operationally from private firms.

Structural Features

• Limited liability for shareholders

• Free transferability of shares

• Separate legal personality

• Perpetual succession

Governance Features

• Mandatory board governance

• Annual General Meetings (AGMs)

• Statutory audits and disclosures

• Enhanced transparency obligations

Comparison: Types of Companies in Nepal (Foreign Investor View)

Why Foreign Companies Choose a Public Limited Company in Nepal

Foreign investors opt for public companies when long-term scale and credibility matter.

Strategic advantages include:

• Ability to raise capital from the public

• Stronger market reputation

• Easier future IPO planning

• Suitable for infrastructure and FDI-heavy sectors

This makes the public company one of the most robust types of companies in Nepal for institutional entry.

Compliance Obligations for Public Companies

Public companies face higher ongoing compliance.

Key Compliance Areas

• Annual audit by licensed auditors

• Filing of financial statements with OCR

• Board and shareholder resolutions

• Sector regulator approvals where applicable

• Tax compliance and withholding obligations

Failure to comply can result in penalties, director liability, or suspension.

Public Limited Company vs Private Limited Company

While private companies dominate Nepal’s SME landscape, public companies are built for scale.

Choose a public company if:

• Capital needs exceed private funding

• Multiple institutional investors are involved

• You plan public share offerings

• Regulatory transparency is a strength, not a burden

Foreign Direct Investment and Public Companies

Foreign ownership is permitted in public companies under Nepal’s FDI framework, subject to sectoral approval and minimum investment thresholds. Capital repatriation, dividend distribution, and exit rights are legally protected when structured correctly.

Common Mistakes Foreign Investors Make

• Choosing a public company too early

• Underestimating compliance costs

• Ignoring sector-specific regulators

• Poor shareholder agreement structuring

Expert advisory reduces these risks significantly.

Conclusion: Choosing the Right Company Structure in Nepal

Understanding the types of companies in Nepal is essential for a successful market entry. While private companies suit lean operations, a Public Limited Company in Nepal offers unmatched scalability, credibility, and capital access for serious foreign investors. The right structure today prevents costly restructuring tomorrow.

Call to Action

Planning to enter Nepal?
Book a consultation with our cross-border compliance and FDI specialists to determine the most efficient company structure for your expansion.

Frequently Asked Questions (People Also Ask)

What are the main types of companies in Nepal?

Nepal recognizes private limited companies, public limited companies, branch offices, liaison offices, and non-profit companies.

Can a foreigner own a public limited company in Nepal?

Yes. Foreign ownership is allowed under Nepal’s FDI framework, subject to sector approval and minimum investment rules.

What is the minimum capital for a public company in Nepal?

The general minimum paid-up capital is NPR 10 million, though some sectors require more.

Is a public limited company required to issue shares publicly?

Not immediately. Share issuance can be phased, but public offering rules apply when shares are offered to the public.

Which company type is best for large foreign investment?

A public limited company is best suited for large-scale, long-term, capital-intensive investments.