If you are evaluating private vs public company in Nepal, you are already thinking strategically. The structure you choose will affect ownership control, compliance costs, tax exposure, fundraising options, and regulatory approvals.
For foreign companies, this decision is even more critical. Nepal’s corporate regime, governed by the Companies Act 2006, the Foreign Investment and Technology Transfer Act 2019 (FITTA), and the Nepal Rastra Bank, creates specific obligations for foreign shareholders.
This guide explains the real differences between a private and public company in Nepal. Not just textbook theory. But what it means for capital, control, compliance, and repatriation.
If your goal is sustainable market entry, this article will help you decide correctly.
Choosing between a private and public company in Nepal affects:
Most foreign investors entering Nepal choose a private limited company. But that is not always the optimal solution.
Let’s break it down.
Under the Companies Act 2006, Nepal recognizes:
Both are separate legal entities. Both offer limited liability protection. But their governance and regulatory thresholds differ significantly.
A private company in Nepal:
It is the most common vehicle for:
Foreign investors must also comply with the Foreign Investment and Technology Transfer Act 2019, which governs equity injection, profit repatriation, and technology transfer.
A public company in Nepal:
Public companies are often used by:
They are regulated by the Securities Board of Nepal (SEBON).
| Criteria | Private Company | Public Company |
|---|---|---|
| Minimum Shareholders | 1 | 7 |
| Maximum Shareholders | 101 | Unlimited |
| Minimum Directors | 1 | 3 |
| Public Share Offering | Not allowed | Allowed |
| Regulatory Oversight | OCR + NRB (for FDI) | OCR + SEBON + NRB |
| Listing on NEPSE | Not permitted | Permitted |
| Disclosure Burden | Moderate | High |
| Typical Use | Foreign subsidiaries |
|
Original Insight:
If your strategy depends on structured foreign capital repatriation and tight shareholder control, a private company reduces governance friction. If your strategy depends on raising local capital and brand legitimacy, a public company may be justified.
Nepal does not impose a uniform minimum capital for private companies under the Companies Act. However:
All foreign equity must be approved by:
Dividend repatriation requires NRB approval and tax clearance under the Income Tax Act 2002.
Public companies face significantly higher governance requirements.
For most foreign investors, compliance cost matters. Public company governance can be 2–3 times more expensive annually.
Choose a private company if:
Most foreign companies entering Nepal’s IT, BPO, consulting, trading, or manufacturing sectors choose this model.
It offers operational flexibility and clean dividend repatriation structure
A public company may be suitable if:
Hydropower companies frequently list on NEPSE to fund development. Banks are legally required to operate as public companies.
Corporate tax rates apply equally unless sector-specific exemptions apply.
Under the Income Tax Act:
Dividend withholding tax applies upon repatriation.
Foreign investors must also comply with:
From a strategic advisory perspective, the key risks are:
Private companies reduce dilution risk. Public companies increase transparency but also scrutiny.
If you are a foreign SME entering Nepal:
Start with a private limited company.
You can later convert into a public company if capital markets become relevant.
This phased approach reduces upfront complexity.
This process typically takes 4–8 weeks depending on documentation quality.
Yes. FITTA allows 100% foreign ownership in most sectors. Some industries are restricted. Approval is required before capital injection.
Yes. Conversion is allowed under the Companies Act. It requires compliance restructuring and shareholder approval.
Yes. Public companies must meet prescribed capital thresholds. Sector-specific laws may impose higher requirements.
No. A private company cannot invite public subscription.
For most foreign investors, a private limited company is more efficient and flexible.
When analyzing private vs public company in Nepal, the answer depends on your capital strategy, control requirements, and regulatory appetite.
For most foreign companies entering Nepal for operational expansion, a private limited company offers:
Public companies are powerful vehicles. But they are best suited for capital-intensive projects.
If you want a strategic, compliant, and tax-efficient Nepal entry structure, start with clarity.