The 2026 Guide to Company Registration in Nepal: Latest Updates and Procedures

If you are a foreign company evaluating private vs public company in Nepal, your choice shapes ownership, compliance, fundraising, and exit options. Nepal has modernized its company laws and investment procedures. Yet many overseas founders still struggle to pick the right structure. This 2026 guide gives you the clearest, most practical explanation. You will learn how private and public companies differ, what regulators expect, and which model best fits your market entry strategy.

Why “Private vs Public Company in Nepal” Matters for Foreign Companies

Nepal is positioning itself as a South Asian hub for services, IT, tourism, manufacturing, and outsourcing. Foreign direct investment has grown steadily, supported by clearer rules and digital filing systems.

Your entity choice affects:

• Shareholding flexibility

• Capital requirements

• Ongoing disclosures

• Investor readiness

• Exit and repatriation options

Choosing incorrectly can delay approvals or raise compliance costs.

Overview of Company Structures in Nepal

Nepal primarily recognizes two limited liability company types for commercial activity.

1. Private Limited Company (Pvt. Ltd.)

The most common structure for foreign investors entering Nepal.

2. Public Limited Company (Ltd.)

Used for large-scale ventures or businesses planning public fundraising.

Both are governed by the Companies Act and supervised by the Office of Company Registrar.

What Is a Private Company in Nepal?

A private company in Nepal is designed for closely held businesses. It restricts share transfers and public fundraising.

Key Characteristics of a Private Company

• Minimum shareholders: 1

• Maximum shareholders: 101

• No public share offering

• Limited liability protection

• Faster incorporation and lower compliance burden

Typical Use Cases

• Foreign-owned subsidiaries

• Joint ventures

• Outsourcing and captive centers

• IT and professional services firms

Most foreign companies choose this model initially.

What Is a Public Company in Nepal?

A public company is structured for capital-intensive or widely owned enterprises.

Key Characteristics of a Public Company

• Minimum shareholders: 7

• No maximum shareholder limit

• Can issue shares to the public

• Higher disclosure and governance standards

• Mandatory compliance with securities regulations

Public companies are overseen not only by OCR but also by capital market regulators.

Private vs Public Company in Nepal: Side-by-Side Comparison

Original insight: Over 85 percent of foreign investors entering Nepal start as private companies, even if they later convert to public status for fundraising.

Capital Requirements and Investment Rules

Minimum Capital

Nepal does not impose a fixed minimum paid-up capital for private companies. Public companies typically require higher capitalization based on sectoral rules.

Foreign Investment Approval

Foreign investors must obtain approval under Nepal’s foreign investment regime. Capital inflows are regulated by Nepal Rastra Bank, which oversees foreign exchange compliance.

Step-by-Step: Company Registration Process in Nepal (2026)

Here is a simplified numbered process foreign companies follow.

1. Name reservation with OCR

2. Preparation of constitutional documents

3. Foreign investment approval (if applicable)

4. Company registration filing

5. PAN and tax registration

6. Bank account and capital injection

Private companies usually complete this faster than public companies.

Compliance Obligations: Private vs Public Company in Nepal

Private Company Compliance

• Annual return filing

• Financial statements submission

• Tax filings and audits

Public Company Compliance

• All private company obligations

• Public disclosures

• Board and shareholder reporting

• Securities compliance

Public companies face significantly higher professional and audit costs.

Governance and Control Considerations

Foreign founders often ask who controls the company.

Private Companies Offer

• Tight ownership control

• Simple board structures

• Confidential financials

Public Companies Require

• Independent directors

• Transparent disclosures

• Shareholder accountability

Control oriented investors usually prefer private companies.

Taxation Overview for Foreign-Owned Companies

Nepal applies corporate income tax to both private and public companies at similar rates. However, public companies may face additional reporting scrutiny.

Taxes typically include:

• Corporate income tax

• Withholding taxes

• VAT (if applicable)

Professional tax planning is essential from day one.

When Should a Foreign Company Choose a Public Company?

A public company may make sense if you plan to:

• Raise capital from Nepali investors

• List on Nepal’s stock exchange

• Operate regulated infrastructure or finance businesses

For most foreign SMEs, this is a later-stage option.

Common Mistakes Foreign Companies Make

Avoid these pitfalls:

• Choosing a public company too early

• Underestimating compliance costs

• Ignoring foreign exchange rules

• Poor shareholder agreements

A staged approach reduces risk.

Practical Recommendation: Start Private, Scale Public

Most foreign companies succeed by:

• Starting as a private company

• Testing the Nepali market

• Scaling operations

• Converting to public status if needed

This approach balances flexibility and growth.

Is a private company in Nepal allowed foreign ownership?

Yes. Foreign investors can own up to 100 percent of a private company, subject to sectoral approvals.

Can a private company later become a public company?

Yes. Nepal allows conversion once regulatory and shareholder conditions are met.

Which structure is cheaper to maintain?

Private companies have significantly lower annual compliance and audit costs.

Do public companies get tax benefits in Nepal?

Tax rates are similar. Public companies may access capital markets but face higher compliance.

How long does company registration take?

Private companies typically register faster than public companies, assuming approvals are in place.

Final Thoughts: Choosing Between Private vs Public Company in Nepal

For most foreign companies, the private vs public company in Nepal decision is clear. Start with a private company. It offers speed, control, and lower risk. Public companies are powerful tools but best reserved for scale and fundraising stages.