Choosing between a private vs public company in Nepal is one of the first strategic decisions a foreign investor must make.
It affects ownership control, capital structure, compliance burden, and long-term scalability.
Nepal has simplified online company registration, but the entity type still defines how smoothly you can operate, raise funds, and exit.
This guide explains the difference in clear, practical terms without legal jargon.
If you are a foreign company entering Nepal, this article gives you the full picture.
All companies in Nepal are incorporated under the Companies Act, 2006 and administered by the Office of Company Registrar (OCR).
For foreign investors, company formation usually sits alongside approvals under:
The two most common structures are:
A private limited company is the most common structure for foreign investors entering Nepal.
It is designed for closely held businesses, subsidiaries, and operational entities.
Most foreign-owned companies in Nepal choose this structure.
A public limited company is designed for large-scale operations and capital raising from the public.
It is commonly used by banks, hydropower companies, and listed enterprises.
For most foreign entrants, this structure is not required at entry stage.
| Criteria | Private Company | Public Company |
|---|---|---|
| Minimum shareholders | 1 | 7 |
| Maximum shareholders | 101 | Unlimited |
| Public share issue | Not allowed | Allowed |
| Capital requirement | Flexible | High (sector-specific) |
| Compliance burden | Low to moderate | High |
| Suitable for foreign investors | Highly suitable | Rare at entry stage |
| Typical use case | Subsidiary, back office, services | Banking, hydropower, IPO |
Original insight:
Over 90% of foreign investments registered in Nepal use the private company structure due to control and compliance efficiency.
Foreign investors prioritize speed, control, and regulatory predictability.
A private company delivers all three.
This structure aligns well with Nepal’s FDI framework.
Nepal has digitized company registration through the OCR portal.
Most private companies are incorporated within 7–15 working days, excluding FDI approval time.
Capital requirements vary based on sector and investment route.
For most foreign service or tech firms, private companies are more practical.
Compliance is where the difference becomes significant.
Foreign investors usually avoid public company compliance unless required.
From a corporate tax perspective, both structures are treated similarly.
The difference is administrative, not fiscal.
A public company may be appropriate if:
For most foreign companies, this comes after years of operation, not at entry.
Avoid these frequent errors:
Correct structuring at the start saves years later.
For foreign companies entering Nepal, the optimal path is:
This approach aligns with Nepal’s regulatory reality.
The private vs public company in Nepal decision is not about size—it is about strategy.
For foreign investors, private companies offer:
Public companies serve a purpose, but rarely at market entry.
If your goal is to test, operate, and scale in Nepal, private company registration is the clear winner.
Yes. Foreign investors can own 100% under FITTA 2019, subject to sector eligibility and approval.
Yes. Name reservation and incorporation are online, but approvals still require document review.
No. Most foreign investments operate through private companies.
Yes. Conversion is allowed after meeting capital and compliance requirements.
Private companies are significantly faster and simpler to register.