If you are a foreign company planning to expand into Nepal, one of your first and most important decisions will be private vs public company structure. It may seem like a legal checkbox. In reality, it shapes everything—from FDI approval and banking to compliance, capital flexibility, and long-term exit strategy.
This guide is written specifically for foreign investors, multinational groups, and regional expansion teams entering Nepal. Whether you are setting up a tech subsidiary, manufacturing unit, liaison office upgrade, or joint venture, structure matters.
In this post, we’ll explain what private vs public company means in Nepal, why it matters for foreign companies, and provide a practical step-by-step roadmap to incorporate your business smoothly. I’ll also share common pitfalls we see when advising international investors so you can move forward confidently.
Before incorporating in Nepal, you must decide between a private limited company and a public limited company.
A private company:
For most foreign investors, this is the preferred structure.
A public company:
Choosing correctly impacts:
In practice, over 90% of foreign investors entering Nepal choose a private company unless they are planning public listing or regulated financial operations.
If you get this decision wrong, restructuring later can be costly and time-consuming.
Below is a structured roadmap tailored for foreign companies.
Start with clarity on your objective:
Ask yourself:
Example:
An Australian mortgage tech company entering Nepal for back-office operations should use a private limited company. A large infrastructure project planning public fundraising may require a public company.
For most FDI-backed subsidiaries, private limited company is the efficient route.
Once structure is finalized:
Tip: Always check trademark conflicts before finalizing.
You will need:
For foreign investors, additional documentation includes:
Accuracy at this stage prevents regulatory delays later.
This is the most critical step for foreign companies.
Depending on the sector and investment size, approval may come from:
Documents typically required:
Approval timelines vary from 2–8 weeks depending on documentation quality.
Practical insight: Incomplete financial projections are the #1 cause of delays.
After FDI approval:
This officially creates your legal entity in Nepal.
Foreign investment must be:
Failure to document capital properly can create repatriation issues later.
Once incorporated, you must:
Compliance calendar includes:
This is where many foreign companies underestimate ongoing responsibilities.
| Feature | Private Company | Public Company |
|---|---|---|
| Minimum shareholders | 1 | 7 |
| Max shareholders | 101 | Unlimited |
| Public share offering | Not allowed | Allowed |
| Compliance level | Moderate | High |
| Suitable for FDI | Yes (most common) | Rare unless large project |
| Regulatory burden | Lower | Higher |
For most foreign subsidiaries, a private limited company offers flexibility, lower compliance cost, and easier governance.
Don’t choose public status just for “image.” Governance complexity increases significantly.
Declared capital should reflect realistic operations. Over-declaration increases audit and compliance cost.
Regulators focus heavily on sustainability and foreign currency inflow.
Dividend repatriation requires clean audit history and regulatory compliance.
Cross-border misunderstandings cause delays more than regulation itself.
Incorporating in Nepal is not complicated but it requires precision. The decision between private vs public company sets the foundation for your regulatory relationship, operational flexibility, and long-term scalability.
For most foreign investors, a private limited company is the right starting point. But each business model is different. The key is alignment between structure, sector regulation, and strategic goals.
When done properly, Nepal offers strong opportunities in technology, manufacturing, outsourcing, infrastructure, and cross-border services.
The roadmap is clear. The execution must be deliberate.
Yes, 100% foreign ownership is allowed in most sectors, subject to FDI approval. Certain industries remain restricted or capped.
No. Most foreign investors use private limited companies. Public companies are generally required only for specific large-scale or regulated sectors.
If documentation is complete, incorporation can take 3–6 weeks including FDI approval. Delays usually occur due to incomplete financial projections.
There is no fixed minimum for most sectors, but regulators expect capital aligned with project scale and operational feasibility.
Yes, dividends can be repatriated after tax clearance, audit completion, and central bank approval.
If you are evaluating private vs public company options for your Nepal entry strategy, our team works directly with foreign investors to:
👉 Book a strategic consultation today to ensure your Nepal incorporation is structured correctly from day one.