If you are evaluating a private vs public company in Nepal, trademark protection must be part of your entry strategy. Your legal structure determines how you own, license, and enforce intellectual property. For foreign companies, this decision affects liability, compliance, taxation, and brand control.
Nepal offers strong statutory protection under the Patent, Design and Trade Mark Act. But ownership flows differently between private and public companies. Choosing the wrong structure can expose your IP to governance risk or compliance delays.
This guide explains both company structures. It also shows how Nepal’s trademark law works in practice. If you are entering Nepal through FDI or local incorporation, this article gives you clarity.
Nepal’s corporate regime is governed by the Companies Act. Foreign investment is regulated under the Foreign Investment and Technology Transfer Act (FITTA).
Trademark protection is administered by the Department of Industries (DOI).
Together, these frameworks determine:
Understanding this regulatory ecosystem builds confidence and reduces entry risk.
A private company is the most common vehicle for foreign investors.
Under the Companies Act 2006:
Private companies are ideal for wholly owned subsidiaries, joint ventures, and branch-style structures.
A public company is structured for capital raising.
Under the Companies Act 2006:
Public companies are regulated by the Securities Board of Nepal (SEBON).
They are appropriate for large-scale infrastructure, banking, insurance, and IPO-driven ventures.
When evaluating a private vs public company in Nepal, foreign investors should assess ownership control, compliance intensity, and trademark strategy.
| Criteria | Private Company | Public Company |
|---|---|---|
| Minimum Shareholders | 1 | 7 |
| Max Shareholders | 101 | Unlimited |
| Public Share Issue | Not allowed | Allowed |
| Regulatory Oversight | Companies Registrar | Companies Registrar + SEBON |
| Disclosure Level | Limited | High |
| Trademark Ownership Simplicity | High | Moderate |
| Compliance Cost | Lower | Higher |
| Best For | FDI subsidiaries | Capital markets |
Original Insight:
For trademark protection, private companies offer faster licensing decisions and cleaner IP ownership structures. Public companies require board-level approvals and greater disclosure.
The Patent, Design and Trade Mark Act 1965 governs trademarks.
Nepal follows a first-to-file principle. This means registration priority goes to whoever files first, not who used the mark first.
Trademark registration is handled by the Department of Industries.
Here is a simplified process foreign companies follow:
The process typically takes 8–18 months depending on objections.
Your corporate structure affects:
A foreign parent sets up a private company in Nepal.
In a public company, royalty arrangements face greater scrutiny.
When choosing between a private vs public company in Nepal, assess:
A private company reduces exposure for early-stage market entry.
Public companies face significantly higher compliance costs.
Under FITTA 2019:
Foreign investors usually begin with a private company model.
Foreign companies should:
Strong documentation strengthens enforceability.
Royalty payments are subject to withholding tax under the Income Tax Act 2002.
Foreign licensors must comply with:
Proper structuring prevents delays.
Enforcement mechanisms include:
The legal system supports registered rights more strongly than unregistered use.
Over 80% of foreign-incorporated subsidiaries in Nepal adopt private company status. This is based on DOI registration trends.
Private companies provide:
They align well with controlled IP management.
Yes. Most foreign investors choose private companies for flexibility and lower compliance.
Yes. Both private and public companies can own trademarks legally.
Typically 8 to 18 months, depending on objections or opposition.
Yes. Registration priority is based on filing date.
Yes, subject to FITTA approval and sector eligibility.
When deciding on a private vs public company in Nepal, consider your capital needs, governance tolerance, and trademark strategy.
For most foreign investors, a private company offers cleaner IP ownership and lower compliance risk. Public companies serve capital-intensive ventures.
Trademark law in Nepal provides solid statutory protection. But structure determines control.
If you are planning entry into Nepal, consult professionals who understand company law, FDI compliance, and intellectual property strategy.