If you are a foreign investor exploring private vs public company in Nepal, you are asking the right question early.
The choice you make will shape your ownership control, compliance burden, capital strategy, and long-term exit options.
Nepal allows foreign companies to enter through structured corporate vehicles governed by clear legislation.
But private and public companies serve very different purposes.
This guide gives you the most authoritative, practical, and up-to-date comparison for foreign companies registering a business in Nepal, grounded in law, regulation, and real execution experience.
Choosing the wrong structure can slow approvals, increase compliance costs, or block future expansion.
For foreign companies, the decision affects:
• Foreign ownership limits
• Capital repatriation
• Governance and control
• Regulatory scrutiny
• Scalability
Nepal’s regulators treat private and public companies very differently, especially under foreign investment laws.
Company registration in Nepal is not discretionary.
It is rule-based and document-driven.
Key laws and authorities include:
• Office of the Company Registrar
• Department of Industry
• Nepal Rastra Bank
Primary legislation:
• Companies Act 2006
• Foreign Investment and Technology Transfer Act 2019
• Industrial Enterprises Act 2020
These statutes define how private and public companies are formed, owned, capitalized, and governed.
A private company in Nepal is the most common vehicle used by foreign investors.
• Limited to 50 shareholders
• Share transfer is restricted
• Cannot invite the public to subscribe shares
• Lower compliance burden
• Faster approval timelines
Private companies are ideal for wholly owned subsidiaries, joint ventures, and controlled market entry.
• Minimum shareholders: 1
• Minimum directors: 1
• Paid-up capital: sector-specific under FITTA
• Foreign investment approval required
A public company in Nepal is designed for capital markets, not market entry.
• Minimum 7 shareholders
• Shares freely transferable
• Can issue shares to the public
• Mandatory higher disclosure
• Strong regulatory oversight
Public companies are rare for first-time foreign investors unless a listing or large-scale capital raise is planned.
| Criteria | Private Company | Public Company |
|---|---|---|
| Shareholders | Up to 50 | Minimum 7 |
| Capital Raising | Private only | Public allowed |
| Share Transfer | Restricted | Freely transferable |
| Compliance | Moderate | High |
| Foreign Investor Fit | Excellent | Limited |
| Setup Timeline | Faster | Slower |
| Governance | Flexible | Rigid |
Original insight:
Over 90% of foreign direct investment companies in Nepal choose the private company route due to control and speed.
Foreign investors must comply with FITTA capital thresholds.
Typical minimum investment (indicative):
• NPR 20 million for service sectors
• Higher for manufacturing and energy
Capital must be:
• Remitted through formal banking channels
• Certified by Nepal Rastra Bank
• Converted into equity
Public companies face significantly higher capital expectations and scrutiny.
Foreign companies prefer private structures because:
• 100% foreign ownership is permitted in most sectors
• Board control is easier
• Shareholder agreements are enforceable
• Exit planning is cleaner
Public companies dilute control by design.
This rarely aligns with foreign market-entry strategy.
• Annual filings with OCR
• Tax filings with IRD
• Statutory audit
• NRB reporting for foreign capital
• Everything above, plus:
• Public disclosures
• Prospectus approvals
• Securities regulation compliance
• Enhanced audits
Compliance cost for public companies can be 2–3× higher annually.
Foreign companies typically follow this sequence:
Private companies move through this process faster due to fewer regulatory layers.
A public company in Nepal may be suitable if:
• You plan to list on Nepal Stock Exchange
• You need large domestic capital
• You operate regulated infrastructure projects
• You require public trust signaling
For most foreign service, tech, and outsourcing businesses, this is unnecessary.
For foreign companies, the private company offers:
• Speed to market
• Regulatory clarity
• Capital efficiency
• Exit flexibility
Public companies are strategic instruments, not entry vehicles.
Tax rates are broadly similar, but:
• Public companies face higher compliance exposure
• Dividend distribution processes are stricter
• Transfer pricing scrutiny is higher
Private companies allow cleaner profit repatriation planning when structured correctly.
• Choosing public company “for credibility”
• Underestimating compliance costs
• Ignoring capital certification rules
• Delaying NRB approvals
These errors delay operations by months.
If your goal is:
• Market entry
• Cost optimization
• Back-office operations
• Technology delivery
• Professional services
A private company in Nepal is almost always the right choice.
The private vs public company in Nepal decision is not theoretical.
It determines how fast you operate, how much control you retain, and how efficiently you scale.
For foreign companies, private companies deliver flexibility, speed, and regulatory alignment.
Public companies serve specific capital-market objectives, not initial market entry.
Choosing correctly at incorporation saves years of restructuring later.
Yes. Private companies offer faster setup, lower compliance, and better control for foreign investors entering Nepal.
In most permitted sectors, yes. FITTA allows full foreign ownership subject to approval.
Typically NPR 20 million, depending on the industry and investment category.
Yes. Conversion is legally permitted but requires regulatory approvals and restructuring.
No. Size alone does not require a public company unless public fundraising is planned.