When evaluating Private vs public company in Nepal, foreign investors must look beyond structure. The decision shapes ownership, compliance exposure, capital access, taxation, and exit strategy.
Nepal is positioning itself as a regional investment destination. Strategic reforms, infrastructure expansion, and liberalized FDI sectors are driving momentum. According to the Government of Nepal’s recent economic surveys, FDI commitments have steadily increased across energy, tourism, IT, and manufacturing sectors.
But here is the critical question:
Should you register a private limited company or a public limited company in Nepal?
This guide provides a structured, legislation-backed, investor-focused analysis under:
If you are planning to enter Nepal in 2026 and beyond, this is the clarity you need.
Nepal recognizes two primary corporate structures for equity-based business operations:
Both are governed under the Companies Act 2063, but they differ significantly in governance, shareholding, capital requirements, and disclosure obligations.
Let’s break them down.
A private limited company is the most common business vehicle for foreign investors.
Foreign investors can hold up to 100% ownership in most sectors permitted under FITTA 2019, subject to minimum investment thresholds.
Private companies offer:
For market entry, pilot projects, tech companies, consulting firms, outsourcing centers, and manufacturing units, the private structure is typically the preferred route.
A public limited company is designed for large-scale enterprises seeking capital from the public.
Public companies may be listed on the Nepal Stock Exchange (NEPSE), subject to securities regulations.
This structure is generally suitable for:
Below is a structured comparison foreign investors rely on during decision-making.
| Criteria | Private Limited Company | Public Limited Company |
|---|---|---|
| Governing Law | Companies Act 2063 | Companies Act 2063 |
| Minimum Shareholders | 1 | 7 |
| Maximum Shareholders | 101 | Unlimited |
| Public Share Offering | Not Allowed | Allowed |
| Capital Requirement | Lower | Higher |
| Regulatory Oversight | Moderate | High |
| Disclosure Requirement | Limited | Extensive |
| Ideal For | SMEs, foreign subsidiaries | Large capital-intensive ventures |
| Conversion Possibility | Can convert to public | Cannot revert easily |
For most foreign investors entering Nepal for the first time, a private limited company provides optimal risk control and flexibility.
Public structures make sense only when raising domestic capital or scaling into national infrastructure markets.
Foreign investors must align company structure with Nepal’s FDI framework.
This Act governs:
Minimum FDI threshold currently stands at NPR 20 million for most sectors. Always verify current thresholds with the Department of Industry (DOI) before filing.
Defines:
Corporate tax rate generally stands at 25%, though sector-specific incentives apply (hydropower, SEZ, etc.).
Choose a private company if you:
Private companies reduce exposure while preserving scalability.
A public limited company becomes strategic if:
Public companies improve credibility in large institutional financing scenarios.
Compliance intensity is a major differentiator.
Higher compliance equals higher transparency but also higher cost.
Funding strategy often determines structure choice.
If public capital markets are part of your 5-year strategy, early structural planning is critical.
Corporate income tax generally applies equally. However:
Always structure holding models carefully to optimize repatriation and double taxation considerations.
Yes.
Under the Companies Act 2063, a private limited company may convert to a public limited company by:
Many foreign investors start private and convert once expansion stabilizes.
This staged strategy reduces early risk.
Before deciding between Private vs public company in Nepal, assess:
A misaligned structure can increase long-term compliance burden.
Here is a simplified investor decision logic:
Is public fundraising required?
If no → Private likely suitable.
Can you manage public reporting obligations?
If no → Private structure.
Will listing be part of exit strategy?
If yes → Consider early public structuring.
Nepal’s economic outlook shows:
The government continues simplifying company registration via OCR digital platforms.
For foreign companies seeking South Asian market diversification, Nepal offers cost advantages and strategic location between India and China.
Yes, in most permitted sectors under FITTA 2019. Certain industries remain restricted. Approval from DOI is required.
The general FDI threshold is NPR 20 million, but sector-specific rules may apply.
Not always initially, but many hydropower developers convert to public companies for fundraising.
Private limited companies have significantly lower reporting and governance costs.
Yes, after converting into a public limited company under Companies Act procedures.
Choosing between Private vs public company in Nepal is not merely administrative. It is strategic.
For most foreign investors entering Nepal, a private limited company offers flexibility, control, and reduced compliance burden.
Public limited companies serve capital-intensive, infrastructure-driven, or IPO-focused ventures.
The right decision aligns legal structure with capital plan, governance capacity, and long-term scaling strategy.
If you are planning foreign investment in Nepal and want a structured, regulation-aligned setup roadmap, connect with our advisory team today.
We help foreign investors design compliant, scalable entry strategies from day one.