Corporate Governance in Nepal
Overview
Corporate governance in Nepal is shaped by company legislation, securities market regulation, and specialized requirements applicable to banks and other regulated financial institutions. The framework combines general statutory provisions governing companies with sector-specific rules designed to strengthen accountability, transparency, financial discipline, and investor protection.
The Companies Act, 2063 (2006) provides the principal legal foundation for company formation, administration, shareholder rights, and corporate decision-making. It establishes requirements concerning general meetings, directors, company management, financial statements, auditing, and statutory disclosures. The Office of the Company Registrar, under the Ministry of Industry, Commerce and Supplies, administers company registration and relevant corporate compliance procedures. Governance arrangements depend on the company’s legal form, its articles and memorandum of association, and the obligations imposed by applicable legislation.
The securities market is regulated by the Securities Board of Nepal (SEBON), which oversees securities issuance, stock exchanges, securities businesses, and other authorized market participants. The Securities Act, 2063 (2007), together with related regulations, provides the legal basis for market supervision, registration, disclosure, and enforcement. Public companies issuing securities and companies listed on the Nepal Stock Exchange are subject to additional requirements concerning financial reporting, disclosure of material information, periodic reporting, and compliance with applicable listing and securities regulations. These obligations support market transparency and provide investors with information relevant to their decisions.
Banks and financial institutions operate under a separate supervisory framework administered by Nepal Rastra Bank (NRB). The Bank and Financial Institution Act, 2073 (2017), the Nepal Rastra Bank Act, and the central bank’s directives establish requirements concerning governance structures, directors’ conduct, board responsibilities, internal controls, risk management, compliance, and financial reporting. Licensed institutions must maintain appropriate systems for identifying and managing financial and operational risks. The regulatory framework also addresses conflicts of interest and the responsibilities of directors and senior management, with the precise requirements varying according to the institution’s category and activities.
Corporate governance requirements differ according to the nature and regulatory status of an entity. Private companies are governed principally by company legislation and their constitutional documents, while public companies, listed issuers, and regulated financial institutions face additional obligations. Statutory audits, accurate accounting records, financial disclosures, and oversight by governing bodies are important components of the framework. Companies must also comply with applicable requirements concerning shareholder meetings, dividend decisions, changes in ownership, and other matters reserved for shareholders.
Nepal’s corporate governance environment continues to be influenced by the development of its capital markets, the expansion of the financial sector, and efforts to improve regulatory compliance and corporate accountability. The practical effectiveness of the framework depends on implementation of statutory requirements, reliable financial information, responsible board oversight, protection of minority shareholders, and enforcement by the relevant authorities.
Overall, Nepal combines general company law with specialized securities and financial-sector regulation. The extent of governance obligations depends on the entity’s legal form, size, activities, and regulatory status, with more extensive supervisory requirements applying to listed companies and licensed financial institutions.
References
Office of the Company Registrar – Companies Act and Related Legislation
https://ocr.gov.np/category/act-rules/
Nepal Law Commission – Companies Act, 2063
https://lawcommission.gov.np/
Securities Board of Nepal – Securities Act, 2063
https://www.sebon.gov.np/acts/securities-act%2C-2063
Securities Board of Nepal – Official Website
https://www.sebon.gov.np/
Nepal Rastra Bank – Unified Directives and Corporate Governance Requirements
https://www.nrb.org.np/bfr/unified-_directives-_2067-_english/
Nepal Rastra Bank – Official Website
https://www.nrb.org.np/
Contact
Organization: Securities Board of Nepal (SEBON)
Address: Khumaltar, Lalitpur, Nepal, P.O. Box 9031
Phone: +977 1 5254057, 5253162, 5444077
Email: support@sebon.gov.np
Website: https://www.sebon.gov.np/
Disclaimer: This information was collected in April 2026 using AI tools and may contain errors or be out of date. Please submit any updates to: admin@ecgi.org