Choosing between a private vs public company in Nepal is one of the first strategic decisions foreign founders make. It affects ownership, fundraising, compliance, and even how easily you can reserve a company name. Nepal’s registration system is transparent but procedural. If you understand the rules early, you save weeks of rework and regulatory back-and-forth.
This guide is written for foreign companies entering Nepal. It explains the legal differences, walks you through company name reservation, and shows how structure impacts long-term operations. You will also see where most foreign founders get stuck—and how to avoid it.
Name reservation is not just administrative. The Office of Company Registrar reviews your company type, objects, and shareholding logic together.
If you choose the wrong structure, your proposed name can be rejected—even if it is available.
Before applying, you must decide whether your Nepal entity will be private or public.
Under the Companies Act 2006, Nepal recognizes two primary incorporated company forms relevant to foreign founders:
Private Limited Company
Public Limited Company
Both are separate legal persons. Both can be locally owned or foreign-invested. But their compliance burden differs significantly.
A private company is the default choice for foreign investors entering Nepal.
1 to 101 shareholders
Shares cannot be publicly traded
Flexible governance
Lower compliance costs
Private companies are faster to register and easier to manage. They suit:
Wholly owned foreign subsidiaries
Back-office or support centers
Technology, consulting, and services firms
Joint ventures with limited partners
Most foreign companies start private and later convert, if needed.
A public company is designed for scale, fundraising, and public participation.
Minimum 7 shareholders
Can issue shares to the public
Higher capital and disclosure requirements
Mandatory statutory committees
Public companies are typically used for:
Large infrastructure projects
Banks and financial institutions
Hydropower and energy ventures
Businesses planning public share issuance
For most foreign SMEs, this structure is unnecessary at entry.
| Factor | Private Company | Public Company |
|---|---|---|
| Shareholders | 1–101 | Minimum 7 |
| Public fundraising | Not allowed | Allowed |
| Compliance cost | Low | High |
| Governance | Flexible | Rigid |
| Setup time | Faster | Slower |
| Best for | Foreign subsidiaries | Large-scale ventures |
Insight: Over 85 percent of foreign-invested companies in Nepal are registered as private companies due to operational flexibility.
The company name reservation process is handled by the Office of Company Registrar.
Your application is evaluated on:
Company type (private or public)
Name uniqueness
Business objectives
Restricted words and sectors
A mismatch between your name and company type leads to rejection.
Confirm whether you are registering a private or public company. This decision must align with your business model.
Your name must:
Be unique
Not resemble existing companies
Avoid restricted or sensitive terms
Vague objectives are the number one cause of name rejection. OCR reviews objectives closely.
Applications are filed electronically and reviewed manually.
If approved, your name is reserved temporarily for incorporation.
Foreign founders often lose time due to avoidable issues.
Name implies regulated activity without approval
Objectives too broad or generic
Name suggests public offering for a private company
Use of restricted terms like “bank” or “insurance”
Preparation reduces rejection risk dramatically.
Nepal enforces strict naming discipline.
Bank, Finance, Insurance
Government, Authority, Commission
Nepal (in certain contexts)
Special approvals may apply under sectoral laws.
Name reservation is only the beginning.
Annual filings
Board resolutions
Tax and labor compliance
Prospectus approvals
Statutory audits
Public disclosures
Regulatory oversight
This difference matters for cost forecasting.
Nepal allows 100 percent foreign ownership in many sectors.
However:
Certain sectors require minimum investment thresholds
Public companies may face higher capital expectations
Regulated industries need additional approvals
Early structuring avoids re-registration later.
Typical timelines:
1–3 business days if documentation is clear.
Longer if objectives or structure need clarification.
Professional preparation shortens timelines.
Both company types are subject to:
Income Tax Act, 2002
VAT Act, if applicable
Labor Act, 2017
Public companies face enhanced disclosure obligations.
Ask yourself:
Are you raising public capital in Nepal?
Do you need broad shareholder participation?
Is regulatory simplicity important at entry?
If you answered “no” to the first two, private company is usually correct.
Some companies convert from private to public when:
Scaling nationally
Issuing public shares
Partnering with government projects
Conversion is possible but requires regulatory approvals.
OCR examiners focus on clarity.
They want:
Logical company type
Specific objectives
Clean ownership logic
Over-ambitious descriptions raise red flags.
Use this quick checklist:
Company type finalized
Objectives clearly drafted
Three alternative names prepared
Sector restrictions reviewed
Foreign investment alignment confirmed
Understanding private vs public company in Nepal is essential before reserving a company name. Your choice affects approval speed, compliance costs, and long-term flexibility. For most foreign companies, a private company offers the fastest and safest entry into Nepal. With the right structure and preparation, name reservation becomes straightforward—not stressful.
If you are planning market entry, getting this step right saves time, cost, and regulatory risk.
For most foreign companies, yes. Private companies offer lower compliance and faster setup.
Yes. Many sectors allow 100 percent foreign ownership under Nepal law.
Once approved, the name is reserved for a limited period to complete incorporation.
Yes. Conversion is allowed but requires regulatory approval and compliance upgrades.
No. Tax rates are generally the same, but compliance obligations differ.