Choosing between a private vs public company in Nepal is one of the most strategic decisions a foreign investor will make.
It impacts ownership control, compliance burden, capital raising, and long-term exit options.
Nepal’s legal framework is foreign-investment friendly but highly procedural.
Understanding how private and public companies differ helps you avoid costly restructuring later.
This guide is written for foreign companies exploring Nepal as a destination for operations, back-office, technology, manufacturing, or regional expansion.
We break down legal rules, practical realities, and investor-grade insights so you can decide with confidence.
Company formation in Nepal is governed primarily by the Office of the Company Registrar (OCR) under the Companies Act 2006.
For foreign investors, incorporation is closely linked with:
Both private and public companies operate under the same Act, but with very different obligations.
A private company is the most common structure chosen by foreign investors.
Most foreign companies use Nepal as:
For these use cases, private companies offer speed, control, and flexibility.
A public company is designed for large-scale capital raising and public ownership.
Public companies are typically used when:
For most foreign investors entering Nepal, this structure is unnecessarily complex at the entry stage.
| Criteria | Private Company | Public Company |
|---|---|---|
| Minimum shareholders | 1 | 7 |
| Maximum shareholders | 101 | Unlimited |
| Public share issuance | Not allowed | Allowed |
| Regulatory scrutiny | Moderate | High |
| Compliance cost | Lower | Significantly higher |
| Foreign investor suitability | Very high | Selective use cases |
| Time to incorporate | Faster | Slower |
Foreign shareholders enjoy:
This structure is ideal when control matters more than fundraising.
Public companies require:
This suits mature businesses, not early-stage foreign entrants.
Foreign investors usually begin with a private company and convert later if needed.
For foreign companies managing compliance remotely, private companies are far easier to maintain.
Tax treatment is largely similar, but complexity differs.
Public companies face higher audit scrutiny and documentation expectations.
Private companies allow smoother tax compliance, especially during early operations.
Not all sectors allow public companies or foreign ownership equally.
Foreign investors must review:
Private companies provide more flexibility to navigate sector-specific approvals during setup.
Most foreign investors should choose a private company when:
This covers over 90 percent of foreign incorporations in Nepal.
A public company may be justified if:
Even then, many investors start private and convert later.
Public companies follow similar steps but add securities approvals and governance layers.
For ROI-focused foreign companies, private structures win early.
A common strategy among foreign investors is:
This approach minimizes risk while preserving future flexibility.
Avoid these pitfalls:
Proper structuring at entry saves years of friction.
For most foreign companies, the answer is clear.
A private company offers:
A public company is a strategic tool, not a default choice.
Understanding private vs public company in Nepal ensures your investment structure supports growth, not complexity.
Yes. Most foreign investors choose private companies due to lower compliance, faster setup, and greater control. Public companies suit large-scale fundraising, not early entry.
Yes. Nepalese law allows conversion from private to public company once requirements are met, including shareholder thresholds and regulatory approvals.
There is no universal minimum. Capital depends on the sector and foreign investment rules applicable to the business.
Yes, subject to sectoral restrictions and foreign investment approvals. Compliance requirements are significantly higher than for private companies.
A private company typically takes a few weeks after approvals. Public companies take longer due to additional regulatory layers.