Choosing between a private vs public company in Nepal is one of the first strategic decisions foreign investors face. It shapes ownership, compliance, fundraising options, and timelines at the Office of Company Registrar (OCR). Make the wrong choice, and you risk delays, excess regulation, or limited scalability. Make the right one, and Nepal becomes a predictable, compliant market entry.
This guide explains the differences in plain English. You will learn how OCR registration works, which structure fits foreign ownership, and how to align with Nepal’s legal framework—without unnecessary complexity.
The Office of Company Registrar is the statutory authority that incorporates companies in Nepal. Every private or public company must be registered here before commencing operations.
Memorandum and Articles of Association
Shareholding structure
Director appointments
Capital declaration
Compliance with foreign investment rules
OCR scrutiny is document-driven. Accuracy and structure matter.
Company formation is governed primarily by the Companies Act 2006. Additional laws apply depending on sector and ownership.
Key supporting legislation includes:
Industrial Enterprises Act 2020
Foreign Investment and Technology Transfer Act (FITTA) 2019
Income Tax Act 2002
Together, these determine eligibility, compliance, and post-incorporation duties.
A private company is the most common structure for foreign investors entering Nepal.
Minimum 1 shareholder, maximum 101
Share transfer restrictions
No public share issuance
Lower compliance burden
Private companies are ideal for subsidiaries, joint ventures, and wholly foreign-owned entities.
A public company is designed for large-scale operations and public fundraising.
Minimum 7 shareholders
Can issue shares to the public
Higher capital thresholds
Enhanced regulatory oversight
This structure suits banks, hydropower, insurance, and IPO-bound ventures.
| Factor | Private Company | Public Company |
|---|---|---|
| Minimum shareholders | 1 | 7 |
| Maximum shareholders | 101 | Unlimited |
| Public fundraising | Not allowed | Allowed |
| Compliance intensity | Moderate | High |
| Foreign investor suitability | Excellent | Selective |
| OCR processing time | Faster | Longer |
Insight: Over 90% of foreign investors choose private companies due to speed and control.
Foreign companies can own up to 100% of a Nepalese private company in permitted sectors under FITTA 2019.
Sector eligibility matters
Minimum capital thresholds apply
Approval from DOI may be required
Public companies face additional scrutiny
Private companies provide more flexibility during approval.
No statutory minimum for most sectors
FITTA may impose sector-based minimums
Higher paid-up capital
Mandatory capital disclosures
Ongoing reporting to regulators
Capital planning should match your growth horizon.
Annual returns to OCR
Financial statements
Tax filings
All private company requirements
Mandatory audits
Shareholder disclosures
Regulatory reporting
Compliance costs rise sharply with public status.
A private company limits fundraising to private placements. This is sufficient for most foreign-led operations.
A public company enables:
IPOs
Public debt instruments
Large institutional funding
Choose based on capital strategy, not prestige.
There is no difference in corporate tax rates between private and public companies in Nepal.
Tax outcomes depend on:
Industry
Incentives
Location-based benefits
Structure affects compliance, not tax rates.
Choose a private company if you want:
Full foreign control
Faster OCR approval
Lower compliance costs
Operational flexibility
This is the default choice for foreign investors.
A public company is appropriate if you plan to:
Raise capital from the public
Operate in regulated sectors
List on Nepal Stock Exchange
Otherwise, it adds unnecessary complexity.
Choosing a public company too early
Underestimating OCR documentation standards
Ignoring FITTA capital thresholds
Misaligning structure with exit plans
Avoid these to save months of delays.
Name reservation
Document preparation
OCR filing
Certificate issuance
PAN registration
A private company can be incorporated within weeks if documents are correct.
Your company type influences:
Regulatory exposure
Investor perception
Exit flexibility
Compliance overhead
Structure is a risk management tool, not a formality.
For most foreign companies, the private vs public company in Nepal decision is clear. Private companies offer speed, control, and compliance efficiency. Public companies suit only capital-intensive, regulated ambitions. Align your structure with your strategy, and OCR registration becomes a gateway—not a hurdle.
For most foreign investors, yes. Private companies offer faster setup, lower compliance, and full ownership control.
Yes. 100% foreign ownership is allowed in permitted sectors under FITTA 2019.
Private company registration typically takes 2–4 weeks if documents are accurate.
Yes. Conversion is legally permitted but involves regulatory approvals and restructuring.
No. Corporate tax rates are the same. Differences lie in compliance, not taxation.