When foreign investors explore private vs public company in Nepal, the first institution they encounter is the Office of Company Registrar (OCR).
The OCR is not just a registration office. It actively shapes how businesses enter, operate, scale, and exit Nepal.
For global founders, tech companies, and holding groups, the choice between a private company and a public company affects ownership, fundraising, compliance costs, and long-term strategy. This guide explains those differences clearly, while showing how the OCR influences every stage of the business lifecycle.
If you want a structure that aligns with Nepalese law, investor expectations, and future growth, this article is your roadmap.
The OCR operates under the Companies Act 2006 and functions as Nepal’s central corporate authority.
Every private or public company must pass through the OCR before becoming a legal entity.
The OCR is responsible for:
Company name approval
Incorporation and registration
Maintaining shareholder and director records
Monitoring statutory compliance
Enforcing disclosure obligations
For foreign companies, the OCR acts as the gatekeeper to legal market entry.
A private company in Nepal is designed for closely held ownership. It is the most common structure for foreign subsidiaries and operating entities.
Key characteristics:
Shareholders limited to a maximum of 101
Shares not offered to the public
Lower compliance and disclosure requirements
Faster incorporation process
A public company is structured for scale, capital markets, and broad ownership.
Key characteristics:
Minimum of seven shareholders
Shares may be offered to the public
Mandatory compliance with securities regulations
Higher governance and reporting standards
The OCR does not merely register companies. It enforces structural differences that make private and public companies fundamentally distinct.
The OCR scrutinizes:
Memorandum and Articles of Association
Board composition and director eligibility
Capital structure and share classes
Public companies face deeper OCR oversight due to public interest considerations.
Private companies restrict share transfers.
Public companies allow free transferability, subject to securities law.
Private companies rely on internal funding or private investors.
Public companies can issue shares to the public and list on stock exchanges.
Public companies must file extensive disclosures with the OCR.
Private companies follow simpler annual filing requirements.
| Criteria | Private Company | Public Company |
|---|---|---|
| Minimum shareholders | 1 | 7 |
| Maximum shareholders | 101 | Unlimited |
| Public share offering | Not allowed | Allowed |
| OCR compliance level | Moderate | High |
| Ideal for foreign firms | Yes | Rare initially |
| Incorporation timeline | Faster | Longer |
This table highlights why most foreign investors start with a private company.
Foreign companies usually prioritize control, speed, and cost efficiency.
Common reasons include:
Full ownership retention
Easier profit repatriation planning
Lower statutory compliance risk
Alignment with FDI approval processes under Foreign Investment and Technology Transfer Act 2019
For most foreign entrants, a private company acts as a scalable base.
Name reservation with the OCR
Preparation of constitutional documents
Submission of incorporation application
Capital declaration and director details
OCR approval and company registration
The OCR timeline is predictable when documentation is accurate.
Both private and public companies must submit:
Annual return
Financial statements
Shareholding updates
Public companies face additional audit and disclosure scrutiny.
The OCR has authority to:
Impose fines
Suspend company activities
Strike off dormant entities
Compliance discipline is essential for foreign companies.
When deciding private vs public company in Nepal, foreign companies should assess:
Market entry objectives
Funding roadmap
Regulatory risk appetite
Exit strategy
For most, starting private and converting later is optimal.
Public companies are suitable when:
Large capital is required
Public fundraising is planned
Long-term Nepal presence is confirmed
Corporate governance capacity exists
Conversion from private to public is possible but regulated by the OCR.
The OCR’s enforcement improves:
Corporate transparency
Investor trust
Regulatory predictability
This strengthens Nepal’s credibility as an emerging investment destination.
For foreign companies, a private company offers flexibility, speed, and control.
A public company is best reserved for later growth stages.
The OCR ensures both structures operate within a stable legal framework.
Choosing between a private vs public company in Nepal is not just a legal formality. It is a strategic decision shaped by the Office of Company Registrar, corporate law, and long-term business goals.
For most foreign investors, incorporating a private company under OCR supervision provides the ideal balance of compliance, control, and scalability.
Yes. Private companies offer simpler compliance, faster setup, and full ownership control for foreign investors.
Yes. The Companies Act allows conversion, subject to OCR approval and compliance requirements.
Typically 7 to 15 working days if documents are complete and compliant.
The OCR applies the same company law, but foreign companies must also meet FDI approval conditions.
No. A public company may remain unlisted, but it must comply with enhanced disclosure rules.