Understanding private vs public company in Nepal is one of the first strategic decisions foreign companies must make. This choice directly affects PAN card registration, tax compliance, ownership rules, and future scalability.
Whether you are an individual investor, a startup founder, or a multinational planning market entry, securing a Permanent Account Number (PAN) is legally mandatory in Nepal. The PAN acts as your tax identity. Without it, you cannot open a bank account, invoice clients, hire employees, or repatriate profits.
This guide explains the private vs public company in Nepal distinction and walks you through key steps to secure a PAN card for personal and business purposes, with a clear foreign-investor lens.
A Permanent Account Number (PAN) is a unique tax identification number issued by Nepal’s tax authority.
It is regulated and issued by the Inland Revenue Department under the Income Tax Act, 2002.
A PAN is required to:
Without a PAN, no legal commercial activity is possible in Nepal.
Before applying for a PAN, foreign companies must decide how they will operate legally.
A private limited company is the most common structure for foreign investors.
Key characteristics:
This structure is ideal for foreign-owned subsidiaries, joint ventures, and back-office operations.
A public limited company is designed for large-scale operations.
Key characteristics:
Public companies are usually chosen for banking, insurance, hydropower, and IPO-driven projects.
The PAN registration process differs based on whether the applicant is:
Your private vs public company in Nepal decision determines:
Below is a clear, regulator-aligned process followed by both individuals and companies.
PAN applications fall into two broad categories:
Foreign investors almost always require a business PAN.
For businesses, PAN is issued only after legal formation.
This means:
PAN is not a substitute for company registration. It comes after.
Documentation varies by structure, but accuracy matters more than volume.
Typical documents include:
Any mismatch between documents can delay approval.
PAN applications are filed at the local Inland Revenue Office where the entity is registered.
The application includes:
Processing is manual but increasingly digitized.
Once verified:
In most cases, issuance occurs within 3 to 7 working days if documents are correct.
| Criteria | Personal PAN | Business PAN |
|---|---|---|
| Applicant | Individual | Company or entity |
| Usage | Salary, personal income | Commercial activities |
| Mandatory for foreigners | Rare | Always |
| Linked to | Citizenship or passport | Company registration |
| Tax filings | Individual returns | Corporate tax, VAT |
Foreign companies cannot operate using a personal PAN.
| Aspect | Private Company | Public Company |
|---|---|---|
| PAN type | Business PAN | Business PAN |
| Approval complexity | Moderate | High |
| Capital scrutiny | Lower | Higher |
| Reporting obligations | Standard | Extensive |
| Best for foreigners | Yes | Sector-specific |
For most foreign investors, a private company with a business PAN is the optimal route.
Foreign investors often underestimate Nepal’s procedural discipline.
Avoid these common errors:
Each mistake can delay operations by weeks.
Once PAN is issued, compliance begins immediately.
Obligations include:
PAN is not a one-time step. It is an ongoing compliance gateway.
From a strategic standpoint, foreign investors prefer private companies because they offer:
Unless regulations require a public structure, private companies dominate foreign investment inflows.
This guide aligns with:
These frameworks govern PAN issuance and corporate taxation in Nepal.
Choosing between a private vs public company in Nepal is not just a legal decision. It directly shapes how smoothly you secure a PAN card, open bank accounts, and begin operations.
For most foreign companies, a private company structure combined with a business PAN offers the fastest, safest, and most scalable entry into Nepal.
Getting this right from day one saves time, cost, and regulatory friction later.
Yes. Every foreign company must obtain a business PAN before starting any commercial activity in Nepal.
Yes, but it is only relevant for personal income, not business operations.
Typically 3 to 7 working days, provided documents are complete and accurate.
No. PAN validity is permanent, but compliance obligations vary by company type.
No. Each legal entity must have its own PAN.