Both of nchar and nvarchar are character data types that are either fixed-length, nchar, or variable-length, nvarchar, Unicode data and use the UNICODE UCS-2 character set.
nchar [ ( n ) ]
Fixed-length Unicode character data of n characters. n must be a value from 1 through 4,000. The storage size is two times n bytes. The ISO synonyms for nchar are national char and national character.
nvarchar [ ( n | max ) ]
Variable-length Unicode character data. ncan be a value from 1 through 4,000. max indicates that the maximum storage size is 2^31-1 bytes. The storage size, in bytes, is two times the number of characters entered + 2 bytes. The data entered can be 0 characters in length. The ISO synonyms for nvarchar are national char varying and national character varying.
From here MSDN