If you are a foreign investor planning to enter South Asia, private vs public company in Nepal is one of the first structural decisions you must make. It affects ownership control, capital flexibility, compliance burden, and long-term exit options.
Nepal offers a stable legal framework for foreign participation. Yet many overseas founders register the wrong entity type and later face restructuring costs. This guide gives you a clear, regulator-aligned comparison so you can choose correctly from day one.
We cover definitions, eligibility, incorporation steps, compliance obligations, and strategic use cases. Everything is written for foreign companies, not local founders.
Under Nepalese corporate law, companies are primarily classified as private or public. Both can accept foreign shareholding, subject to sectoral rules and foreign investment approvals.
All companies are incorporated through Office of Company Registrar (OCR) and operate under approvals coordinated with Department of Industry for foreign investment.
The difference lies in scale, governance, and public participation.
A private company in Nepal is a closely held corporate entity designed for controlled ownership and operational flexibility.
Private companies are the most common choice for foreign investors entering Nepal for operational purposes.
A public company is structured to raise capital from a wider group of investors and, potentially, the public market.
Public companies face stricter scrutiny from regulators and financial authorities, including Nepal Rastra Bank where applicable.
| Criteria | Private Company | Public Company |
|---|---|---|
| Ownership limit | Up to 50 shareholders | Unlimited shareholders |
| Foreign investment | Allowed with approval | Allowed with approval |
| Capital raising | Private funding only | Public and private funding |
| Compliance cost | Lower | Significantly higher |
| Governance | Simple board structure | Mandatory committees |
| Best for | Foreign subsidiaries, SMEs | Large-scale enterprises |
Insight: Over 90 percent of foreign investors in Nepal register private companies because public companies are rarely needed unless public capital is required.
For most foreign companies, a private limited company is the correct entry vehicle.
Foreign investors must follow a structured incorporation and approval process.
Submit proposed company names to OCR for approval.
Apply through DOI for foreign investment clearance, including sector eligibility and capital structure.
Register the entity at OCR with constitutional documents and shareholder details.
Inject foreign capital through a Nepalese bank, aligned with Nepal Rastra Bank requirements.
Obtain PAN, VAT (if applicable), and local registrations.
This process typically takes 3 to 6 weeks if documents are well prepared.
Foreign investors should budget 2–3x higher annual compliance costs for public companies.
A clean private structure can always be converted later if growth requires it.
Both private and public companies can repatriate profits, dividends, and capital, subject to tax clearance and banking approvals.
Key points for foreign investors:
Structure selection does not change tax rates, but it affects documentation complexity.
If you are not legally required to be public, stay private.
This is why most international firms entering Nepal start private and scale later.
For foreign investors, private vs public company in Nepal is not a theoretical choice. It is a strategic decision with cost, control, and compliance consequences.
In over nine out of ten cases, a private limited company is the correct structure for market entry. Public companies should only be used when capital markets or regulatory requirements demand it.
If you choose correctly at incorporation, Nepal can be a stable, cost-efficient base for long-term growth.
For most foreign investors, yes. Private companies offer lower compliance, faster setup, and stronger control.
Yes. Full foreign ownership is allowed in approved sectors with proper investment clearance.
Public companies generally require higher capital thresholds, depending on sector regulations.
Yes. Conversion is legally permitted after meeting regulatory and capital requirements.
A private limited company is the preferred structure for foreign subsidiaries in Nepal.