If you are evaluating Private vs public company in Nepal, you are already thinking strategically. The legal structure you choose determines control, tax exposure, compliance burden, investor flexibility, and long-term scalability.
Nepal is entering a new phase of economic modernization. Reforms in foreign direct investment (FDI), digitization of the Department of Industry (DOI), and updated regulatory clarity under the Companies Act 2006 and Foreign Investment and Technology Transfer Act 2019 have made the country significantly more attractive for global businesses.
For foreign companies exploring South Asia, Nepal offers:
But the real question is simple:
Should you incorporate a private limited company or a public limited company in Nepal?
This guide gives you a clear, executive-level breakdown.
Nepal is no longer viewed as a frontier-only market. It is becoming a controlled-growth opportunity.
According to Nepal Rastra Bank annual reports, foreign investment commitments have steadily increased across energy, tourism, IT, and manufacturing sectors.
For foreign investors, structure matters before capital flows.
Choosing between a private and public company in Nepal is not merely administrative. It is strategic.
Let us break it down clearly.
Both company types are governed by the Companies Act 2006.
Foreign investment eligibility is governed by the Foreign Investment and Technology Transfer Act 2019 (FITTA).
Regulatory oversight includes:
A private limited company is the most common vehicle for foreign investors.
Most foreign investors entering Nepal choose this structure.
A public limited company is designed for larger-scale operations and capital market access.
Public companies intending to list must comply with rules of the Securities Board of Nepal (SEBON).
| Factor | Private Limited Company | Public Limited Company |
|---|---|---|
| Ownership | Restricted (1–101) | Unlimited shareholders |
| Public Share Offering | Not allowed | Allowed |
| Capital Raising | Private funding only | IPO possible |
| Compliance Burden | Moderate | High |
| Governance Structure | Flexible | Rigid |
| Director Requirement | Minimum 1 | Minimum 3 |
| Foreign Ownership | Permitted (sector-based) | Permitted |
| Strategic Use | Subsidiary / JV / Controlled Ops | Large infrastructure / IPO plans |
Insight:
For foreign companies entering Nepal for operational control, private limited structure provides efficiency and predictability.
Public company structure makes sense when:
Under FITTA 2019:
Repatriation of profits requires:
The Nepal Rastra Bank regulates foreign currency repatriation flows.
Choose private limited if:
It works well for:
Choose public company if:
However, public company compliance is heavier.
It includes:
The cost difference can be significant.
Corporate income tax is governed by the Income Tax Act 2002.
Key points:
Both private and public companies are taxed similarly. Structure does not change corporate tax rate.
But governance affects compliance exposure.
Foreign companies often underestimate this distinction.
A private company prioritizes:
A public company prioritizes:
For first-time foreign investors in Nepal, private limited is generally the safest entry vehicle.
Structure must align with capital strategy.
Private companies offer flexible governance.
You can:
Public companies require:
For foreign holding companies, control architecture matters more than size.
In practice:
The private model allows:
Then, if required, conversion to public structure is possible.
Yes. Under FITTA 2019, 100% foreign ownership is permitted in most sectors, subject to minimum investment thresholds and restricted industry lists.
No general minimum capital under the Companies Act. However, FDI minimum thresholds apply for foreign investors.
Yes. Conversion is permitted subject to regulatory compliance and capital restructuring.
A public limited company is mandatory for listing on Nepal’s stock exchange and issuing shares to the public.
No. Corporate income tax rates apply equally under the Income Tax Act 2002.
When evaluating Private vs public company in Nepal, foreign investors should begin with strategy, not structure.
For most foreign companies entering Nepal:
Private limited company = control, speed, and flexibility.
Public company = scale, capital markets, and broader ownership.
Nepal presents a real opportunity. But success depends on structuring correctly from day one.
If you are planning market entry, structuring decisions must align with:
Choosing correctly at incorporation stage avoids years of restructuring later.