Types of companies in Nepal is one of the first and most important questions foreign investors ask when entering the Nepali market. The structure you choose affects ownership rights, tax exposure, compliance burden, profit repatriation, and long-term scalability. Choosing the wrong company type can slow expansion or increase regulatory risk.
This expert guide explains which type of company you should register in Nepal, with clear pros and cons, practical use cases, and compliance insights designed specifically for foreign companies.
Under the Companies Act, 2006, Nepal recognises several legal structures for doing business. Foreign investors typically choose from the following:
Private Limited Company
Public Limited Company
Branch Office
Liaison (Representative) Office
Non-Profit Company (Not-for-Profit)
Each option suits a different investment objective, risk appetite, and operating model.
A Private Limited Company is a separate legal entity with limited liability, owned by shareholders. It is the most common choice among foreign investors entering Nepal.
Minimum 1 shareholder (foreigners allowed)
Maximum 101 shareholders
Separate legal identity
Can earn revenue locally
Eligible for Foreign Direct Investment (FDI)
Full operational freedom
Limited liability protection
Eligible for profit repatriation
Easier to raise capital than branches
Preferred by banks and regulators
Higher compliance than liaison offices
Annual audits mandatory
Corporate income tax applies
Dividend withholding tax on repatriation
Technology companies
Professional services firms
Manufacturing and trading businesses
Long-term market entry strategies
A Public Limited Company can offer shares to the public and must meet higher capital and disclosure requirements.
Minimum 7 shareholders
No upper limit on shareholders
Higher paid-up capital requirement
Mandatory public disclosures
Can raise capital from the public
Strong corporate credibility
Suitable for large infrastructure projects
Complex compliance
Higher setup and governance costs
Heavy regulatory oversight
Hydropower projects
Infrastructure and energy sectors
Large manufacturing ventures
A Branch Office is not a separate legal entity. It operates as an extension of the foreign parent company.
100% foreign ownership
No local shareholding
Approved under foreign investment laws
Limited scope defined by approval
Full foreign control
Easier exit than company liquidation
Suitable for project-based work
Limited permitted activities
No independent legal identity
Profit repatriation restrictions
Higher regulatory scrutiny
EPC contractors
Infrastructure projects
Fixed-term assignments
A Liaison Office acts as a representative office and cannot generate revenue in Nepal.
No commercial activity allowed
Funded entirely by head office
Limited operational scope
Fast setup
Minimal compliance
No corporate tax exposure
Cannot invoice clients
Cannot earn profits
Limited long-term viability
Market research
Relationship building
Initial feasibility studies
A Non-Profit Company operates for charitable, educational, or social objectives and cannot distribute profits.
Tax incentives for approved activities
Suitable for development projects
Strict activity limitations
No dividend or profit distribution
NGOs
Social enterprises
Educational initiatives
| Company Type | Can Earn Revenue | Foreign Ownership | Compliance Level | Best Use Case |
|---|---|---|---|---|
| Private Limited | Yes | Up to 100% | Medium | Long-term operations |
| Public Limited | Yes | Allowed | High | Large projects |
| Branch Office | Limited | 100% | Medium-High | Project-based |
| Liaison Office | No | 100% | Low | Market entry |
| Non-Profit | Restricted | Limited | Medium | Social impact |
When evaluating types of companies in Nepal, foreign investors should consider:
Nature of business activity
Investment size and horizon
Profit repatriation needs
Regulatory tolerance
Exit strategy
A private limited company is usually the optimal balance between control, scalability, and compliance.
Corporate tax rate generally ranges around 25%, depending on sector
Annual audit and filings required
Foreign investment governed by FITTA 2019
Employment governed by Labour Act 2017
Social security contributions mandatory
(Source: Government of Nepal legislation and official guidelines)
Choosing a liaison office when revenue is needed
Underestimating compliance timelines
Ignoring sector-specific approvals
Misjudging repatriation rules
Professional structuring advice prevents costly restructuring later.
For most foreign investors, a Private Limited Company offers the best balance of control, revenue generation, and repatriation flexibility.
Yes. Many sectors allow 100% foreign ownership, subject to FDI approval and sectoral rules.
A branch office suits short-term or project-based work, while a subsidiary is better for long-term growth.
Typically 2–4 weeks, depending on approvals, documentation, and investment structure.
Yes, profits can be repatriated after tax, subject to compliance with foreign exchange regulations.
Understanding the types of companies in Nepal is critical for foreign investors who want to enter the market confidently. While multiple structures exist, most international businesses succeed with a Private Limited Company due to its flexibility, credibility, and scalability.
Choosing the right company type upfront saves time, cost, and regulatory risk.
Planning to register a company in Nepal?
Speak with our Nepal market entry specialists for a free structuring consultation. We help foreign companies choose the right entity, secure approvals, and stay compliant from day one.