If you are evaluating private vs public company in Nepal, PAN card registration is not a side issue. It is a legal gatekeeper. Every company operating in Nepal must obtain a Permanent Account Number (PAN) before it can hire staff, open bank accounts, or issue invoices.
For foreign companies, the choice between a private and public company directly affects PAN eligibility, compliance exposure, disclosure, and future scalability. This guide explains the rules clearly, without legal clutter, and shows how foreign investors should think about structure, tax registration, and long-term control.
By the end, you will know which structure works, when PAN is mandatory, and how to avoid regulatory missteps.
A PAN (Permanent Account Number) is a tax identification number issued by Nepal’s Inland Revenue Department. It tracks all tax-related activities of an individual or entity.
Without a PAN, a company cannot legally operate in Nepal.
PAN registration is compulsory for:
In short, if you exist legally, PAN applies.
Foreign investors often focus on incorporation first. That is only half the picture.
PAN registration is what activates the company in the tax system.
Without PAN:
PAN is not optional. It is foundational.
Before diving into PAN mechanics, it helps to clarify the core difference.
A private company is the default entry vehicle for foreign investors.
Key characteristics:
Most foreign-owned subsidiaries in Nepal are private companies.
A public company is designed for capital markets and public ownership.
Key characteristics:
Public companies are rare for first-time foreign entrants.
PAN registration is mandatory for both structures. There is no exemption.
However, the process, scrutiny, and post-registration compliance differ.
PAN must be obtained:
Delays trigger penalties and compliance flags.
PAN registration follows a defined administrative flow.
Most registrations complete within a few working days if documents are clean.
| Factor | Private Company | Public Company |
|---|---|---|
| PAN mandatory | Yes | Yes |
| Registration complexity | Moderate | High |
| Disclosure after PAN | Limited | Extensive |
| Ongoing tax reporting | Standard | Enhanced |
| Audit depth | Annual audit | Statutory + regulatory |
| Best for foreign entrants | Yes | Rarely |
Insight: PAN compliance cost scales faster in public companies. This matters for early-stage foreign investors.
Once PAN is issued, tax obligations begin immediately.
PAN is not a one-time event. It is a continuous compliance anchor.
Private companies offer predictability and control.
After PAN registration:
For foreign subsidiaries operating as cost centers or service hubs, this structure aligns best.
Public companies face expanded oversight.
After PAN registration:
This structure only makes sense if public capital is a real objective.
Avoid these recurring issues:
PAN is necessary, but not sufficient, for full compliance.
Foreign companies must align PAN registration with:
Misalignment creates bottlenecks later, especially during dividend remittance.
For most foreign companies:
Public company structures should be strategic, not default.
Choosing the right structure upfront matters more than speed.
When assessing private vs public company in Nepal, PAN card registration is the common denominator that turns legal existence into operational reality.
For foreign companies, private companies provide faster PAN registration, lower compliance friction, and better control. Public companies amplify obligations and should only be chosen with a clear capital-raising strategy.
If your goal is stable market entry, predictable taxation, and compliant operations, start with structure, secure PAN early, and build forward with confidence.
Yes. All foreign-owned entities must obtain PAN before commencing operations.
No. Operating without PAN is illegal and triggers penalties.
The obligation is the same, but documentation and scrutiny are higher for public companies.
No. VAT requires a separate registration once thresholds apply.
Typically a few working days if documents are complete.