If you are a foreign company planning market entry, one of the first legal decisions you face is private vs public company in Nepal. This choice affects ownership control, capital raising, compliance burden, and long-term scalability.
Nepal’s corporate framework is investor-friendly but documentation-heavy. Picking the wrong structure can slow approvals, increase costs, or limit exit options. This guide breaks down the differences in plain language, with legal backing and practical insight for 2026.
We will cover eligibility, compliance, capital rules, and strategic use cases so you can choose with confidence.
Company formation in Nepal is governed primarily by the Companies Act 2006 and administered by the Office of Company Registrar.
Foreign investors typically enter Nepal through:
For most foreign companies, the real decision is private vs public company in Nepal.
A private company in Nepal is designed for closely held businesses. It is the most common structure for foreign direct investment.
In practice, over 90 percent of foreign-owned companies in Nepal operate as private limited entities, according to OCR registration trends.
A public company in Nepal is structured for large-scale operations and capital markets access.
Public companies fall under additional regulation by the Securities Board of Nepal if listed or issuing securities.
| Criteria | Private Company | Public Company |
|---|---|---|
| Minimum shareholders | 1 | 7 |
| Maximum shareholders | 50 | Unlimited |
| Public share issuance | Not allowed | Allowed |
| Capital requirement | Flexible | Higher statutory minimum |
| Compliance burden | Moderate | High |
| Suitable for FDI | Yes (most common) | Yes (select cases) |
| Regulatory oversight | OCR | OCR + SEBON |
This table alone explains why private vs public company in Nepal is not a close contest for most foreign entrants.
For cost-sensitive or pilot operations, private companies offer significantly more flexibility.
If you value operational simplicity, the private vs public company in Nepal comparison clearly favors private companies.
Both private and public companies are taxed under Nepal’s Income Tax Act, 2002.
The difference lies in administrative cost, not tax savings.
Foreign investors often underestimate control issues.
For most foreign parents, retaining control is a priority. This makes the private vs public company in Nepal decision straightforward.
Despite the complexity, public companies are suitable in specific scenarios:
If none of these apply, a private company is usually the smarter entry vehicle.
Regardless of structure, foreign investors must secure approval under Nepal’s foreign investment framework.
Expect scrutiny on:
Private companies generally clear approvals faster due to simpler governance.
Use this checklist before deciding:
If you answered “no” to the first two, private vs public company in Nepal resolves itself in favor of a private company.
Avoiding these mistakes saves months of delay and significant advisory cost.
For most foreign investors, the private vs public company in Nepal decision is not about legality. It is about efficiency, control, and risk.
Private companies dominate foreign investment for a reason. They are easier to manage, cheaper to operate, and faster to scale. Public companies serve a purpose, but only in capital-intensive or regulated sectors.
If your goal is market entry with flexibility, a private company is almost always the right starting point.
For most foreign investors, yes. Private companies offer lower compliance and stronger control.
Yes, subject to sector eligibility and foreign investment approval.
Yes. Conversion is allowed under the Companies Act with regulatory approval.
No. Tax rates are sector-based, not structure-based.
Private companies are significantly faster to incorporate and operationalize.