If you are a foreign company evaluating private vs public company in Nepal, the choice you make will shape everything that follows. Ownership, compliance burden, fundraising ability, and even exit options depend on this decision. Nepal’s company law framework is welcoming to foreign investors, but only when the structure aligns with your business objective.
This guide simplifies company registration in Nepal. It compares private and public companies clearly, using practical insights, legal references, and investor-focused guidance. By the end, you will know which structure fits your Nepal market entry strategy and why.
Nepal primarily recognizes two corporate forms for investment-led businesses.
Private Limited Company and Public Limited Company.
Both are governed by the Companies Act, 2006, along with sector-specific laws like FITTA 2019 and the Industrial Enterprises Act 2020.
Before comparing them, it helps to understand the intent behind each.
A private limited company in Nepal is designed for controlled ownership and operational efficiency.
It is the most common structure used by foreign investors.
Key characteristics:
Private companies are typically used for:
A public limited company is designed for scale, capital raising, and wider ownership.
It allows public share issuance and listing.
Key characteristics:
Public companies are usually used for:
A private company can have between 1 and 50 shareholders.
A public company requires a minimum of 7 shareholders.
Foreign investors often prefer private companies because:
Private companies have no statutory minimum paid-up capital.
Capital is driven by business needs and regulatory approvals.
Public companies require:
This makes private companies far more accessible for market entry.
Private companies enjoy lighter compliance.
Public companies face strict governance obligations.
Private company compliance includes:
Public company compliance includes:
| Factor | Private Limited Company | Public Limited Company |
|---|---|---|
| Shareholders | 1–50 | Minimum 7 |
| Foreign Ownership | Up to 100% | Allowed, regulated |
| Minimum Capital | No fixed minimum | NPR 10 million |
| Public Share Issue | Not allowed | Allowed |
| Compliance Burden | Moderate | High |
| IPO Eligibility | Not eligible | Eligible |
| Best For | Foreign subsidiaries, SMEs | Large projects, capital markets |
This table highlights why private vs public company in Nepal is not just a legal question.
It is a strategic one.
Registering a private company in Nepal typically involves:
The process is streamlined and investor-friendly.
Public company registration includes all of the above, plus:
This adds time, cost, and complexity.
When comparing private vs public company in Nepal, compliance is often the decisive factor.
For most foreign investors entering Nepal for operations rather than fundraising, private companies offer clarity and control.
Tax treatment is largely similar for both structures.
However, compliance cost differs.
Common taxes include:
Private companies are easier to manage from a tax governance perspective.
Choose a private limited company if your goals include:
Choose a public limited company if your goals include:
For most foreign companies, the answer to private vs public company in Nepal is clear.
Private limited companies dominate foreign investment registrations.
Many foreign companies misjudge Nepal’s structure options.
Avoid these mistakes:
Starting private does not limit future conversion.
Yes.
Nepal allows conversion from private to public company.
This flexibility makes private companies an ideal entry vehicle.
This guide aligns with:
These laws govern company formation, ownership, and compliance in Nepal.
Choosing between private vs public company in Nepal is one of the most important decisions a foreign investor will make.
For most foreign companies, a private limited company offers:
Public companies serve a purpose, but only when scale and capital markets demand it.
If your goal is efficient Nepal market entry, private is usually the right start.
Private companies are better for most foreign investors due to lower compliance and full ownership flexibility.
Yes. 100% foreign ownership is permitted in most sectors, subject to approval.
There is no fixed statutory minimum capital requirement.
Only for sectors requiring public investment or capital market participation.
Yes. Conversion from private to public company is legally permitted.