If you are evaluating private vs public company in Nepal, you are already asking the right question.
Your entry structure determines control, compliance exposure, capital access, taxation outcomes, and exit flexibility. It is not just a legal formality. It is a strategic decision that shapes your long-term Nepal investment journey.
In 2026, Nepal’s foreign investment climate is more structured than ever. Reforms under the Companies Act 2006, Foreign Investment and Technology Transfer Act (FITTA) 2019, and Industrial Enterprises Act 2020 have clarified investor rights. The result is a more predictable framework for foreign companies exploring South Asia expansion.
This guide breaks down everything you need to know.
Nepal is positioning itself as a regional hub for:
According to Nepal Rastra Bank data, FDI commitments have steadily increased over the past five years, particularly in energy and services sectors. The government continues to promote export-oriented and employment-generating industries.
Key investor protections include:
However, your choice between a private limited company and a public limited company will significantly influence how you operate within this framework.
Understanding the difference begins with the Companies Act 2006. This legislation governs company formation, governance, shareholder rights, and disclosure obligations.
A private company in Nepal:
This is the most popular structure for foreign investors entering Nepal.
A public company:
Public companies are typically used for:
Below is a practical comparison for foreign companies evaluating market entry.
| Factor | Private Company in Nepal | Public Company in Nepal |
|---|---|---|
| Governing Law | Companies Act 2006 | Companies Act 2006 + Securities laws |
| Minimum Shareholders | 1 | 7 |
| Max Shareholders | 101 | Unlimited |
| Public Share Offering | Not allowed | Allowed |
| Compliance Burden | Moderate | High |
| Best For | FDI subsidiaries, tech, services | Infrastructure, hydropower, banking |
| Board Requirements | 1 director | 3 directors minimum |
| Disclosure | Limited | Extensive |
| Capital Raising | Private funding | Public + institutional |
Strategic Insight:
Foreign investors focused on operational control and flexibility typically choose a private limited company. Public companies are used when large-scale capital mobilization is required.
From a practical standpoint, a private limited company offers:
For technology firms, outsourcing providers, consulting subsidiaries, and service exporters, this structure is optimal.
Under FITTA 2019, foreign investors can own up to 100% equity in most sectors, subject to the negative list.
A public company is not wrong. It is simply specialized.
It makes sense when:
Hydropower is a classic example. Many energy projects in Nepal adopt public limited structures to raise domestic capital.
Both private and public companies must comply with:
Foreign investors must additionally comply with:
Here is a simplified overview of incorporation steps:
Public companies follow similar steps but include additional compliance under securities law.
In addition to the above:
Compliance costs can be significantly higher.
Corporate income tax in Nepal generally ranges around 25%, with variations depending on sector.
In SEZs:
These incentives apply regardless of private or public status, provided eligibility criteria are met.
Private companies rely on:
Public companies can access:
If capital intensity is moderate, a private company remains more efficient.
Foreign investors should consider:
A private company offers easier share transfers within shareholder agreements.
Public companies face stricter securities regulations during exits.
Ask yourself:
If most answers favor flexibility and control, a private company is likely optimal.
Under FITTA 2019, foreign investors are allowed to repatriate:
This applies to both private and public companies, provided compliance is maintained.
Structure determines long-term operational efficiency.
Yes. FITTA 2019 allows 100% foreign ownership in most sectors, except those listed in the negative list.
Not always, but many hydropower projects adopt public structures to raise domestic capital.
Private companies have lower compliance and reporting requirements.
Yes. The Companies Act allows conversion, subject to regulatory approvals.
Capital depends on sector regulations. There is no universal minimum for all industries.
Choosing between a private vs public company in Nepal is not just about incorporation. It is about strategy.
Private companies offer control, efficiency, and flexibility. Public companies offer capital access and scale.
For most foreign companies entering Nepal in 2026, a private limited company remains the preferred structure. However, large-scale infrastructure or capital-heavy ventures may benefit from a public model.
If you are planning to establish operations in Nepal, the right structure can reduce risk, optimize tax exposure, and simplify compliance.
A well-structured entry today creates sustainable growth tomorrow.