The Paper Trail: Gathering Documents for Registering a Private Company in Nepal

If you are a foreign investor comparing private vs public company in Nepal, paperwork is where the decision becomes real.
The documents you submit shape ownership, control, timelines, and compliance risk.
Most foreign companies start with a private limited company, but understanding the paper trail clarifies why.

This guide breaks down the documents, approvals, and legal logic behind private vs public company in Nepal, with a practical focus on private company registration. It is written for founders, CFOs, and expansion teams who want clarity, not confusion.

Why “Private vs Public Company in Nepal” Matters for Foreign Companies

Choosing the wrong structure creates friction with regulators, banks, and tax authorities.
For foreign investors, the difference is not cosmetic. It affects capital rules, disclosure, and control.

Private Company at a Glance

• Maximum 101 shareholders
• Share transfer restrictions
• No public share issuance
• Preferred for FDI and subsidiaries

Public Company at a Glance

• Minimum 7 shareholders
• Can issue shares to the public
• Higher disclosure and compliance
• Rare for first-time foreign entrants

For most market entry strategies, private vs public company in Nepal is decided early. Private companies win on speed and flexibility.

Legal Framework Governing Company Registration in Nepal

Before documents, understand the laws behind them.
Nepal’s company system is statute-driven.

Key legislation includes:

• Companies Act, 2006
• Foreign Investment and Technology Transfer Act, 2019
• Industrial Enterprises Act, 2020

Company incorporation is administered by the Office of Company Registrar.
Foreign investment approval is overseen by the Department of Industry.

These laws explain why documentation is detailed and sequential.

Private vs Public Company in Nepal: Document Burden Compared

Foreign companies often ask which structure requires more paperwork.
The answer is clear.

Key Differences in Documentation

This is why private companies dominate foreign registrations.

Core Documents Required to Register a Private Company in Nepal

Here is the heart of the paper trail.
Each document has a legal purpose.

1. Application for Company Registration

Submitted in the prescribed OCR format.
It includes:

• Proposed company name
• Registered office address
• Nature of business

2. Memorandum of Association (MOA)

Defines the company’s scope and capital.

It must state:

• Authorized share capital
• Shareholding structure
• Business objectives

Foreign investors should align objectives with DOI approvals.

3. Articles of Association (AOA)

Sets internal governance rules.

Key clauses include:

• Share transfer restrictions
• Board powers
• Voting rights

This is a critical distinction in private vs public company in Nepal, as private companies rely heavily on AOA control.

4. Shareholder and Director Details

For each individual or entity:

• Full name and address
• Nationality
• Passport copy

Corporate shareholders must submit legalized incorporation documents.

5. Citizenship or Passport Copies

• Nepali promoters submit citizenship certificates
• Foreign promoters submit passports

Passports often require notarization and consular attestation.

Foreign Investment–Specific Documents

When foreign ownership exists, additional paperwork applies.

6. Foreign Investment Approval Application

Filed with the Department of Industry.

It includes:

• Investment amount
• Source of funds
• Shareholding percentage

7. Board Resolution of Foreign Parent Company

This resolution must:

• Approve investment in Nepal
• Authorize a representative
• Specify capital commitment

This document is frequently delayed, so plan early.

8. Corporate Documents of Foreign Investor

Required documents include:

• Certificate of incorporation
• Memorandum and articles
• Company profile

These must be notarized and, in some cases, apostilled.

Capital and Banking Documents

Capital documentation is where many timelines slip.

9. Capital Structure Declaration

This states:

• Authorized capital
• Issued capital
• Paid-up capital

Private companies have flexibility here compared to public companies.

10. Bank Account Opening Letter

After OCR approval, a letter is issued to open a capital account.

Foreign investors must route funds through:

• Approved commercial banks
• Formal banking channels

11. Proof of Capital Inflow

Banks issue certificates confirming foreign currency inflow.
This is mandatory for regulatory closure.

Tax and Statutory Registration Documents

Once incorporated, registration continues.

12. PAN Registration

Permanent Account Number registration with the Inland Revenue Department.

Required for:

• Tax filings
• Invoicing
• Payroll

13. VAT Registration

Mandatory if turnover exceeds the statutory threshold.

14. Local Ward Registration

Municipal registration based on office location.

This step is often overlooked but legally required.

Private vs Public Company in Nepal: Timeline Reality Check

Foreign companies value predictability.
Here is a realistic view.

Typical Timelines

1. Name reservation: 1–2 days
2. OCR incorporation: 3–5 working days
3. DOI approval: 7–15 working days
4. Bank and capital inflow: 5–10 working days

Public company timelines are significantly longer.

Common Mistakes Foreign Companies Make

Avoidable errors cause most delays.

• Mismatch between MOA objectives and DOI approval
• Improperly notarized foreign documents
• Unrealistic capital declarations
• Ignoring post-incorporation filings

These mistakes blur the benefits of choosing private over public structures.

Why Private Companies Are Preferred in Nepal

From an investor’s lens, the conclusion is practical.

Private vs public company in Nepal favors private companies because they offer:

• Faster incorporation
• Lower compliance costs
• Better shareholder control
• Easier exit planning

Public companies suit large-scale capital markets, not initial entry.

Compliance After Registration

Registration is only the start.

Ongoing obligations include:

• Annual financial statements
• Annual general meeting filings
• Tax returns
• Labor and social security compliance

Private companies still carry responsibility, but at a manageable level.

Private vs Public Company in Nepal: Strategic Recommendation

For foreign companies testing the Nepali market, a private limited company is usually optimal.
It balances compliance with flexibility.
Public companies should be considered only for large, capital-intensive ventures.

Frequently Asked Questions

Is a private company better than a public company in Nepal for foreigners?

Yes. Private companies are faster to register, easier to control, and better aligned with FDI rules in Nepal.

Can a foreigner own 100% of a private company in Nepal?

Yes, subject to sectoral restrictions and approval under foreign investment laws.

How long does private company registration take in Nepal?

Typically 2–4 weeks, depending on document readiness and approvals.

What is the minimum capital for a private company in Nepal?

There is no fixed minimum, but foreign investment thresholds may apply based on sector.

Can a private company later convert into a public company?

Yes. Conversion is permitted under the Companies Act, subject to compliance and approvals.

Conclusion

Understanding private vs public company in Nepal starts with understanding the paper trail.
Documents are not bureaucracy. They define control, risk, and scalability.

For most foreign investors, registering a private company in Nepal is the smartest first step.
With the right documentation and planning, Nepal can be a compliant and efficient expansion base.

If you are planning market entry, get the paperwork right from day one.