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.
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.
A private company in Nepal is the most common structure for foreign-owned businesses.
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.
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.
A public company in Nepal is designed for large-scale capital mobilisation.
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.
| Criteria | Private Company | Public Company |
|---|---|---|
| Minimum shareholders | 1 | 7 |
| Maximum shareholders | 101 | Unlimited |
| Public share offering | Not allowed | Allowed |
| Minimum capital | Flexible | NPR 10 million or more |
| Regulatory burden | Moderate | High |
| Best for foreign investors | Yes | Rarely |
Insight:
Over 90 percent of foreign-owned companies in Nepal choose the private company route due to control and speed.
Private companies allow tailored capital structures.
Foreign investors can align equity with funding milestones.
Public companies require higher paid-up capital from day one.
Private companies enable:
Majority or full foreign ownership
Shareholder agreements
Reserved matters and veto rights
Public companies dilute control by design.
Annual financial statements
Annual general meeting
OCR annual return filing
Tax filings with Inland Revenue
Quarterly disclosures
Independent directors
Mandatory audits and reporting
Higher scrutiny from regulators
Foreign companies value predictability.
Private companies provide it.
The OCR is not just a filing office.
It is the gatekeeper of corporate legality.
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.
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.
Establish a Nepal subsidiary
Operate a services or tech company
Maintain parent-level control
Scale gradually
Raise capital from the Nepali public
List on the stock exchange
Operate in regulated infrastructure sectors
Private companies are significantly cheaper to operate.
Registration fees are lower
Compliance costs are predictable
Professional fees remain manageable
Public companies require ongoing governance spending.
Foreign companies often:
Choose public companies unnecessarily
Underestimate compliance requirements
Ignore OCR documentation standards
These mistakes delay operations and approvals.
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.
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.
Yes. Subject to FDI approval, foreigners can own up to 100 percent of a private company in permitted sectors.
Only for specific regulated sectors. Most projects can operate as private companies.
There is no fixed minimum. Capital depends on business nature and regulatory approvals.
Private company registration typically takes 7 to 15 working days after document submission.
Yes. Conversion is legally permitted but involves regulatory approvals and restructuring.