Choosing between a private vs public company in Nepal is one of the first strategic decisions foreign companies must make. The structure you select affects ownership, taxation, compliance, capital raising, and long-term scalability. Nepal welcomes foreign investment, but its corporate framework follows specific legal and procedural rules. Understanding those rules upfront saves time, cost, and regulatory friction later.
This guide is written for foreign founders, CFOs, and expansion leaders. It explains how private and public companies differ in Nepal and walks you through the essential steps to register a company confidently.
In Nepal, company type is not a formality. It directly impacts how regulators, banks, tax authorities, and even employees engage with your business.
Your decision influences:
For most foreign companies entering Nepal for back-office, IT, outsourcing, or regional support, the choice comes down to private vs public company in Nepal, with private companies dominating FDI registrations.
Nepal’s corporate framework is governed primarily by the Companies Act, 2063 (2006). The Act recognizes several entities, but foreign investors usually evaluate only two.
A private company is the most common entry vehicle for foreign businesses.
Key characteristics:
Private companies are ideal for subsidiaries, captive back-offices, and controlled operating entities.
A public company is designed for large-scale capital mobilization.
Key characteristics:
Public companies are uncommon for first-time foreign entrants unless listing or public fundraising is a core objective.
The table below highlights practical differences that matter to foreign investors.
| Criteria | Private Company | Public Company |
|---|---|---|
| Minimum shareholders | 1 | 7 |
| Maximum shareholders | 101 | Unlimited |
| Public share issuance | Not allowed | Allowed |
| Compliance burden | Moderate | High |
| Suitable for FDI | Yes | |
Insight: Over 90% of foreign-invested companies in Nepal register as private companies due to speed, control, and lower compliance exposure.
Regardless of whether you choose a private or public company, the registration journey follows a structured process.
Start by aligning your Nepal strategy with your global objectives.
Ask yourself:
For most foreign companies, a private company limited by shares is the optimal answer.
Company registration begins with name approval from the Office of Company Registrar (OCR).
Rules to note:
Name approval is typically granted within one to three working days.
You must prepare two core documents:
These define:
For foreign companies, objectives must align with approved FDI activities.
If foreign ownership is involved, approval under the Foreign Investment and Technology Transfer Act (FITTA), 2019 is mandatory.
Approval is sought through:
This step differentiates domestic and foreign registrations.
Once approvals and documents are ready, incorporation is filed at OCR.
You receive:
At this point, the company legally exists in Nepal.
After incorporation, the company must complete statutory activations.
This includes:
These registrations are essential before hiring or invoicing.
Foreign-owned companies must:
Capital inflow must be reported and certified.
Ongoing compliance is where many foreign companies struggle.
You must plan for:
Private companies enjoy simpler reporting than public companies.
Tax treatment is similar for both structures, but compliance differs.
Tax applies to profits generated in Nepal.
Public companies face more disclosure scrutiny around distributions.
Choosing the wrong structure increases hidden costs.
Public companies must:
Private companies benefit from:
This is why private entities dominate FDI structures.
A public company may be justified if:
For most foreign service or technology companies, these conditions do not apply.
Foreign companies often face delays due to avoidable errors.
Typical pitfalls include:
Early advisory support prevents these issues.
The decision between private vs public company in Nepal is not just legal. It is strategic. It affects taxation, risk exposure, and operational flexibility.
A properly structured private company allows foreign investors to:
For foreign investors, the private vs public company in Nepal decision sets the foundation for long-term success. While public companies offer capital access, private companies deliver speed, control, and compliance efficiency.
Most foreign companies entering Nepal choose private company registration for good reason. With the right planning and expert guidance, Nepal can be a compliant, cost-effective, and scalable destination for your regional operations.
Yes. Private companies offer lower compliance, faster setup, and full foreign ownership in most sectors.
Yes, subject to sector eligibility and foreign investment approval.
Typically two to four weeks, including foreign investment approvals.
There is no fixed minimum, but capital must align with business objectives.
Yes. Conversion is allowed but requires regulatory approvals.