If you are comparing private vs public company in Nepal, one compliance step quietly underpins everything that follows: PAN registration.
Within the first few days of incorporation, every foreign-owned entity must obtain a Permanent Account Number (PAN) to legally operate, hire staff, open tax accounts, and transact with banks.
Foreign investors often underestimate this step. Delays at PAN stage can stall payroll, VAT, banking, and even capital repatriation later. This guide explains how PAN registration works in Nepal, why the process differs slightly for private vs public companies, and how foreign companies can complete it cleanly the first time.
A PAN (Permanent Account Number) is a unique tax identification number issued by Nepal’s Inland Revenue Department (IRD).
It is mandatory for:
Without PAN registration, a company cannot legally operate in Nepal.
For foreign investors, PAN is not just a tax formality. It is a regulatory gateway.
A PAN is required to:
In practice, banks, vendors, and even landlords will ask for your PAN certificate before proceeding.
Yes, slightly. The core process is the same, but documentation and scrutiny differ.
| Aspect | Private Company | Public Company |
|---|---|---|
| Shareholders | Limited number | Public or institutional |
| Regulatory scrutiny | Moderate | High |
| IRD verification | Standard | Enhanced |
| Time to issue PAN | Faster | Slightly longer |
| Typical use case | Subsidiaries, SMEs | Large FDI, capital markets |
Insight:
Foreign investors almost always start with a private company structure. Public companies are rarely used for initial market entry due to disclosure and compliance burden.
PAN registration is compulsory for:
Even non-profit or cost-center entities must register if they incur expenses or hire staff.
Before PAN registration, the company must be incorporated with the Office of Company Registrar (OCR).
You will need:
PAN cannot be issued without legal incorporation.
Foreign companies must submit the following:
Tip:
Mismatch between OCR records and PAN application is the most common reason for rejection.
Applications are filed:
For foreign-owned companies, physical verification is often required.
IRD officers verify:
Public companies and regulated sectors face deeper scrutiny.
Once approved, IRD issues:
This usually takes 3–7 working days for private companies.
Here is a quick reference list.
Having these aligned upfront saves weeks.
Avoid these frequent issues:
These errors delay not only PAN but downstream approvals.
PAN registration triggers multiple next steps.
After PAN, companies must:
PAN is the first domino in Nepal’s compliance chain.
Typical timeline:
Public companies and regulated sectors may take longer.
PAN registration is governed by:
These laws mandate PAN before income generation.
Most foreign investors choose private companies.
Why:
Public companies are usually considered only at scale.
Treat PAN registration as a strategic compliance milestone, not a clerical task.
A clean PAN setup today prevents tax disputes, banking friction, and repatriation issues later.
When evaluating private vs public company in Nepal, PAN registration is one of the first real compliance tests foreign companies face.
Handled properly, it unlocks banking, payroll, and tax operations smoothly.
Handled poorly, it creates compounding delays across your Nepal market entry.
For foreign investors, the smartest approach is to align structure, documentation, and PAN strategy from day one.
Yes. All foreign-owned entities must obtain PAN before operating or earning income in Nepal.
Private companies usually receive PAN within 3–7 working days. Public companies may take longer.
Yes, but foreign-owned entities often require physical verification at IRD.
Yes. Banks will not open operational accounts without a PAN certificate.
Yes. Branch offices require parent company documents and additional verification.