Your Guide to the Office of Company Registrar: Facilitating Company Registration in Nepal

Private vs public company in Nepal is one of the first strategic decisions foreign companies must make before entering the market.
The choice affects ownership control, capital requirements, compliance burden, and long-term scalability.

Nepal welcomes foreign investment, but its corporate framework is highly structured. All companies are registered and regulated through the Office of the Company Registrar (OCR) under the Companies Act 2006.

This guide is written for foreign founders, CFOs, and expansion teams.
It explains the legal, operational, and strategic differences between private and public companies in Nepal, using practical examples and regulatory insight.

Understanding Company Registration in Nepal

Every company in Nepal must be incorporated with the OCR.
The OCR oversees:

• Company incorporation and name approval

• Memorandum and Articles of Association review

• Share capital structure validation

• Ongoing statutory filings and disclosures

Foreign investors cannot bypass this process.
Choosing the wrong structure early creates friction later.

What Is a Private Company in Nepal?

A private company in Nepal is the most common structure for foreign-owned businesses.

Key legal characteristics

• Minimum shareholders: 1

• Maximum shareholders: 101

• Share transfer is restricted

• Public invitation to subscribe shares is prohibited

This structure is designed for control, flexibility, and operational focus.

Why foreign companies prefer private companies

Private companies align well with foreign direct investment models.
They are ideal for:

• Subsidiaries

• Joint ventures

• Holding companies

• Operating companies

For most foreign entrants, this is the default choice.

What Is a Public Company in Nepal?

A public company in Nepal is designed for large-scale capital mobilisation.

Key legal characteristics

• Minimum shareholders: 7

• No maximum shareholder limit

• Shares can be offered to the public

• Higher disclosure and governance requirements

Public companies are typically used by banks, insurers, hydropower firms, and listed entities.

Private vs Public Company in Nepal: Core Differences

At a glance

Insight:
Over 90 percent of foreign-owned companies in Nepal choose the private company route due to control and speed.

Private vs Public Company in Nepal: Capital and Ownership Rules

Share capital flexibility

Private companies allow tailored capital structures.
Foreign investors can align equity with funding milestones.

Public companies require higher paid-up capital from day one.

Ownership control

Private companies enable:

• Majority or full foreign ownership

• Shareholder agreements

• Reserved matters and veto rights

Public companies dilute control by design.

Compliance Burden: What Foreign Companies Must Know

Private company compliance

• Annual financial statements

• Annual general meeting

• OCR annual return filing

• Tax filings with Inland Revenue

Public company compliance

• Quarterly disclosures

• Independent directors

• Mandatory audits and reporting

• Higher scrutiny from regulators

Foreign companies value predictability.
Private companies provide it.

Role of the Office of Company Registrar in Company Formation

The OCR is not just a filing office.
It is the gatekeeper of corporate legality.

OCR responsibilities include

• Approving company names

• Reviewing constitutional documents

• Registering directors and shareholders

• Enforcing statutory compliance

Foreign companies must ensure documents are accurate, notarised, and compliant with Nepali law.

Private vs Public Company in Nepal for FDI Structuring

Why private companies dominate FDI

Foreign Direct Investment frameworks in Nepal are structured around private companies.

They allow:

• Faster approvals

• Easier governance

• Cleaner exit planning

Public companies are rarely used for first-time foreign entry.

Practical Scenarios for Foreign Companies

Choose a private company if you plan to:

1. Establish a Nepal subsidiary

2. Operate a services or tech company

3. Maintain parent-level control

4. Scale gradually

Choose a public company only if you plan to:

• Raise capital from the Nepali public

• List on the stock exchange

• Operate in regulated infrastructure sectors

Cost Implications: Private vs Public Company in Nepal

Private companies are significantly cheaper to operate.

Typical cost differences

• Registration fees are lower

• Compliance costs are predictable

• Professional fees remain manageable

Public companies require ongoing governance spending.

Common Mistakes Foreign Investors Make

Foreign companies often:

• Choose public companies unnecessarily

• Underestimate compliance requirements

• Ignore OCR documentation standards

These mistakes delay operations and approvals.

Strategic Recommendation from an Industry Perspective

For foreign companies, the decision is clear in most cases.

A private company in Nepal is the optimal structure for:

• Market entry

• Operational subsidiaries

• Cost control

• Legal clarity

Public companies serve a narrow purpose.

Conclusion: Private vs Public Company in Nepal — The Smart Choice

When evaluating private vs public company in Nepal, foreign companies should prioritise control, compliance ease, and scalability.

For over a decade, Nepal’s corporate framework has consistently favoured private companies for foreign investors.
The OCR, the Companies Act, and FDI regulations all reinforce this reality.

Choosing the right structure from day one saves time, capital, and risk.

Frequently Asked Questions 

1. Can a foreigner fully own a private company in Nepal?

Yes. Subject to FDI approval, foreigners can own up to 100 percent of a private company in permitted sectors.

2. Is a public company mandatory for large projects in Nepal?

Only for specific regulated sectors. Most projects can operate as private companies.

3. What is the minimum capital for a private company in Nepal?

There is no fixed minimum. Capital depends on business nature and regulatory approvals.

4. How long does company registration take in Nepal?

Private company registration typically takes 7 to 15 working days after document submission.

5. Can a private company convert into a public company later?

Yes. Conversion is legally permitted but involves regulatory approvals and restructuring.