Understanding the types of companies in Nepal is the first and most important decision for any foreign business planning to enter the Nepali market. Nepal offers multiple legal structures, each with distinct ownership rules, compliance requirements, tax implications, and foreign investment thresholds.
This 2026-updated guide is written specifically for foreign companies, founders, and international groups. It explains every legally recognised company type in Nepal in clear, practical language. You will learn which structure fits your expansion strategy, budget, and long-term goals.
If you want certainty, compliance, and speed, this guide will save you months of confusion.
Company formation and classification in Nepal are governed primarily by:
Companies Act 2006
Foreign Investment and Technology Transfer Act 2019
Industrial Enterprises Act 2020
Income Tax Act 2002 and NRB foreign exchange directives
All companies are registered with the Office of Company Registrar (OCR) through Nepal’s online registration portal.
Selecting the wrong structure can result in:
Delays in approvals
Rejection of foreign investment
Restrictions on profit repatriation
Unexpected tax exposure
Non-compliance penalties
Choosing the correct type of company in Nepal ensures regulatory approval, operational flexibility, and investor confidence.
Under the Companies Act, Nepal recognises several distinct company types. These fall into commercial, non-profit, and foreign entity categories.
Minimum shareholders: 1
Maximum shareholders: 101
Foreign ownership: Allowed up to 100% (FDI sectors permitting)
Separate legal entity
Limited liability
Foreign startups
IT and outsourcing firms
Professional services companies
Subsidiaries of overseas corporations
Full operational control
Eligible for FDI and profit repatriation
Scalable structure
Cannot invite public share subscriptions
This is the most commonly recommended option for foreign companies entering Nepal.
Minimum shareholders: 7
No maximum shareholder limit
Minimum paid-up capital as prescribed
Can issue shares publicly
Banks and financial institutions
Hydropower and infrastructure projects
Large manufacturing entities
Access to public capital
Enhanced corporate credibility
High compliance burden
Mandatory disclosures and audits
A Single Shareholder Company allows one individual or entity to own 100% of a private company.
One shareholder only
Can be foreign-owned
Same legal status as Pvt. Ltd.
Solo foreign founders
Holding companies
Asset-owning entities
This structure is increasingly popular with foreign consultants and digital entrepreneurs.
Not a separate legal entity
Parent company bears full liability
Allowed only in approved sectors
Project execution
Technical support
Contract-based operations
Cannot conduct unrestricted commercial trading
Strict regulatory oversight
A Liaison Office is used strictly for non-commercial activities.
Market research
Brand promotion
Coordination and communication
Revenue generation
Contract signing
Invoicing
This option is suitable for companies testing the Nepali market before committing capital.
A Non-Profit Company is established for social, educational, research, or charitable objectives.
No dividend distribution
Profits reinvested into objectives
Foreign participation allowed with approvals
NGOs and INGOs
Research organisations
Educational institutions
This structure is used where members guarantee a fixed amount instead of contributing share capital.
Industry associations
Chambers of commerce
Professional bodies
It is rarely used for commercial foreign investment.
| Company Type | Foreign Ownership | Commercial Activity | Liability | Best For |
|---|---|---|---|---|
| Private Limited | Up to 100% | Yes | Limited | Most foreign businesses |
| Public Limited | Allowed | Yes | Limited | Large capital projects |
| Single Shareholder | 100% | Yes | Limited | Solo foreign founders |
| Branch Office | 100% | Restricted | Unlimited | Project execution |
| Liaison Office | 100% | No | Unlimited | Market entry |
| Non-Profit Company | Allowed | No | Limited | NGOs / INGOs |
For most foreign investors, the answer is clear.
Private Limited Company with FDI approval is the most efficient, compliant, and scalable structure.
Choose alternatives only if:
You cannot generate revenue yet (liaison office)
You operate under a specific government project (branch office)
You require public capital (public company)
All company types in Nepal must comply with:
Annual filings with OCR
Tax registration and filings
Audit requirements
Labour and Social Security Fund registration
Foreign exchange reporting (for FDI entities)
Failure to comply can result in fines, blacklisting, or investment restrictions.
Avoid these frequent errors:
Choosing a liaison office for revenue activities
Underestimating minimum capital requirements
Ignoring sector-specific FDI restrictions
Delaying post-registration compliance
Structuring without repatriation planning
Professional guidance prevents these issues.
Understanding the types of companies in Nepal is essential for successful and compliant market entry. Nepal’s legal framework is investor-friendly when navigated correctly, but unforgiving when misunderstood.
For most foreign companies in 2026, a Private Limited Company with FDI approval remains the gold standard. The right structure protects your investment, simplifies compliance, and enables long-term growth.
Planning to register a company in Nepal?
Speak with a Nepal incorporation specialist to choose the right structure, secure approvals, and launch with confidence.
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For most foreigners, a Private Limited Company with FDI approval offers maximum control, limited liability, and profit repatriation.
Yes. Foreigners can own 100% shares in permitted sectors under FITTA 2019.
FDI companies generally require a minimum foreign investment threshold as prescribed by law, depending on sector.
Only limited activities are allowed via a liaison office. Commercial operations require registration.
With proper documentation, registration typically takes 2–4 weeks, excluding FDI approvals.