Your Roadmap to Company Name Registration in Nepal

Choosing between a private vs public company in Nepal is one of the first strategic decisions foreign businesses must make. It affects ownership, compliance, capital raising, and even how your company name is approved. Within the first 100 days of market entry, most regulatory delays come from selecting the wrong structure or misunderstanding name registration rules.

This guide is written for foreign founders, CFOs, and legal teams. It explains the differences clearly, links them to company name registration in Nepal, and gives you a practical roadmap to move forward with confidence.

You will not just learn definitions. You will understand consequences.

Why “Private vs Public Company in Nepal” Matters for Foreign Companies

Foreign investors often assume that public companies offer credibility while private companies are limiting. In Nepal, the reality is different.

Your choice impacts:

• How many shareholders you can have

• Whether foreign ownership is allowed

• How your company name is reviewed and approved

• Reporting, audit, and disclosure requirements

• Exit options in the future

Most foreign-owned operating companies in Nepal start as private limited companies. Public companies are usually reserved for banks, hydropower, insurance, or capital-market-driven ventures.

Understanding this distinction early prevents restructuring later.

Overview of Company Types Under Nepalese Law

Nepal’s corporate framework is governed primarily by the Companies Act, 2006 and sectoral regulations.

The two most relevant structures are:

1. Private Limited Company

A closely held entity with limited shareholders and restricted share transfer.

2. Public Limited Company

A company allowed to invite the public to subscribe to shares, subject to strict regulation.

Both must register with the Office of Company Registrar, commonly known as OCR.

What Is a Private Company in Nepal?

A private company in Nepal is the default choice for foreign investors entering through FDI or joint ventures.

Key Legal Characteristics

• Minimum shareholders: 1

• Maximum shareholders: 101

• Share transfer is restricted

• Cannot invite the public to subscribe to shares

• Foreign ownership allowed, subject to sector approval

Why Foreign Companies Prefer Private Companies

Private companies offer flexibility and speed.

They are suitable for:

• Back-office operations

• IT and software development

• Consulting and professional services

• Trading and distribution

• Wholly foreign-owned subsidiaries

From a name registration perspective, private companies face fewer objections, as long as the proposed name is distinctive and compliant.

What Is a Public Company in Nepal?

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

Key Legal Characteristics

• Minimum shareholders: 7

• No maximum shareholder limit

• Shares may be offered to the public

• Mandatory compliance with securities regulations

• Higher paid-up capital requirements

Typical Use Cases

Public companies are common in:

• Commercial banking

• Hydropower and infrastructure

• Insurance

• Large manufacturing enterprises

For most foreign SMEs, this structure is unnecessarily complex.

Private vs Public Company in Nepal: Side-by-Side Comparison

This comparison alone explains why over 90 percent of foreign companies choose private incorporation.

How Company Name Registration Works in Nepal

Company name registration is not a branding exercise alone. It is a legal vetting process.

All companies must apply through the OCR’s online system, followed by document verification.

Core Rules for Name Approval

Your proposed name must:

• Not be identical or deceptively similar to an existing company

• Reflect the company type (Private Limited or Limited)

• Not violate morality, public order, or national interest

• Avoid restricted or regulated terms unless approved

Foreign companies often face rejection due to similarity or misuse of regulated words.

Step-by-Step Roadmap to Company Name Registration in Nepal

This roadmap applies whether you choose a private or public company, but private companies move faster.

1. Preliminary Name Search

Conduct a similarity check on the OCR database.

2. Name Reservation Application

Submit up to three name options, ranked by preference.

3. Regulatory Review

OCR reviews for legal compliance, not marketing appeal.

4. Approval or Objection

You may receive approval or a request for modification.

5. Validity Period

Once approved, the name is reserved for incorporation filing.

This process typically takes 2–5 working days for private companies.

How Company Type Affects Name Approval

This is where private vs public company in Nepal becomes practical.

Private Companies

• Greater flexibility in naming

• Fewer sector-specific objections

• Faster approval cycles

Public Companies

• Stricter scrutiny

• Often require sector regulator no-objection letters

• Higher likelihood of name modification

If speed matters, private incorporation is the safer path.

Common Name Rejection Reasons Foreign Companies Face

Foreign investors often underestimate local nuances.

Common rejection triggers include:

• Using “international” or “global” without justification

• Using regulated terms like “bank,” “insurance,” or “finance”

• Transliteration conflicts in Nepali language

• Similarity to dormant or inactive companies

These risks increase significantly for public companies.

Foreign Investment Considerations You Must Know

Foreign investment is governed by the Foreign Investment and Technology Transfer Act, 2019.

Key points:

• Most service and manufacturing sectors allow 100 percent foreign ownership

• Certain sectors require minimum investment thresholds

• Approval is needed before incorporation if foreign capital is involved

Private companies integrate more smoothly with FDI approvals.

Compliance Differences After Registration

Choosing the wrong structure affects your operational life.

Private Company Compliance

• Annual filings with OCR

• Tax filings and audits

• Board meetings as per Articles

Public Company Compliance

• Enhanced disclosures

• Mandatory external audits

• Securities reporting obligations

Foreign SMEs rarely benefit from public company compliance.

Strategic Insight: Think in Phases, Not Labels

The smartest foreign investors treat incorporation as a phase.

Start private. Scale later.

Nepalese law allows conversion from private to public when your capital and governance are ready. The reverse is far more difficult.

When a Public Company Actually Makes Sense

Despite the complexity, public companies are justified when:

1. You plan to raise capital from the Nepali public

2. Your sector requires public status

3. You are preparing for a future IPO

If none of these apply, private is the rational choice.

Practical Checklist for Foreign Founders

Before choosing between private vs public company in Nepal, ask:

• Do I need public capital now?

• Is my sector regulated?

• Do I want speed or scale first?

• Am I prepared for high disclosure?

For most, the answer points to private incorporation.

Frequently Asked Questions 

Is a private company better than a public company in Nepal?

For foreign investors, yes in most cases. Private companies are faster, simpler, and fully compliant for operations.

Can a foreigner own 100 percent of a Nepali company?

Yes, in permitted sectors under FITTA 2019, typically through a private company.

How long does company name registration take in Nepal?

Usually 2–5 working days if the name complies with OCR rules.

Can I change my company name later?

Yes, but it requires shareholder resolutions and OCR approval.

Can a private company convert into a public company?

Yes. Nepalese law allows conversion once legal requirements are met.

Conclusion: Making the Right Choice from Day One

Understanding private vs public company in Nepal is not about theory. It is about execution.

For foreign companies, private incorporation offers speed, control, and regulatory clarity. It simplifies company name registration and aligns with FDI rules. Public companies serve a different purpose and should be chosen only with intent.

If your goal is to enter Nepal efficiently, protect your capital, and stay compliant, start private. You can always scale later.