Starting a business in Nepal is exciting. But before you begin, you must know what type of company you want to register. Nepal’s Companies Act 2063 divides companies into different types based on size, ownership, and purpose.
Below is a simple and clear guide.
1. Private Company
A private company is the most common type in Nepal.
Main features:
- Can have 1 to 101 shareholders
- Cannot sell its shares to the public
- Needs less paperwork
- Good for small and medium businesses
Example: Small IT firms, shops, trading companies
2. Public Company
A public company can sell shares to the public.
Main features:
- Must have at least 7 shareholders
- Can invite the public to buy shares
- Must follow more rules and reporting
- Suitable for large businesses
Example: Banks, insurance companies, large industries
3. Non-Profit Company
This type is formed for social causes, not for profit.
Main features:
- Cannot distribute profits to members
- Works for education, health, charity, or community projects
- Must use income for social goals
Example: NGOs, nonprofit organizations
4. Branch Office
A Branch Office is opened in Nepal by a foreign company.
Main features:
- It is not a separate company.
- It works as an extension of the main foreign company.
- It can do business activities allowed by Nepal’s laws.
- It must register with the Office of the Company Registrar (OCR).
- It must pay taxes in Nepal for income earned here.
Example: Foreign IT companies, engineering firms, consultancy services
5. Liaison Office
A Liaison Office is also opened by a foreign company, but with limited work.
Main features:
- It cannot do business in Nepal.
- It cannot earn income inside Nepal.
- Its job is to communicate between the foreign company and Nepali clients or partners.
- It can collect information, promote business, and support communication.
- It must also register with the OCR.
Example: Foreign airlines, trade promotion offices, research offices