Online PAN Card Registration in Nepal: What You Need to Know

If you are comparing private vs public company in Nepal, one compliance step quietly underpins everything that follows: PAN card registration.
For foreign companies, this is not just a tax formality. It determines how you hire staff, open bank accounts, invoice clients, and repatriate profits.

In Nepal, both private and public companies must register for a Permanent Account Number (PAN) with the Inland Revenue Department. The process is now largely online, but the requirements, timing, and risk exposure differ sharply depending on your company type.

This guide gives you the most authoritative, practical explanation available. It connects company structure, PAN registration, and foreign investor compliance, so you avoid delays and regulatory missteps.

Why PAN Registration Matters in the Private vs Public Company Decision

PAN registration is often treated as an administrative afterthought. That is a mistake.

For foreign companies, PAN is the activation switch for Nepal operations.

Without a PAN, you cannot:

• File income tax returns
• Withhold employee taxes
• Register for VAT
• Open fully operational corporate bank accounts
• Execute lawful contracts in Nepal

In short, the private vs public company in Nepal debate is incomplete without understanding how PAN registration changes your compliance footprint.

What Is a PAN Card in Nepal?

A Permanent Account Number (PAN) is a unique tax identification number issued by the Inland Revenue Department.

It applies to:

• Companies
• Branch offices
• Representative offices
• Individuals and employees
• Non-resident entities with Nepal-source income

For companies, PAN links every tax obligation to one identity.

Private vs Public Company in Nepal: Structural Differences That Affect PAN

Before registering for PAN, foreign investors must select the correct legal form under the Office of Company Registrar.

Private Company in Nepal

A private company is the most common entry vehicle for foreign investors.

Key features:

• Limited to 101 shareholders
• No public share issuance
• Faster incorporation timeline
• Lower disclosure requirements

PAN registration usually happens immediately after incorporation.

Public Company in Nepal

A public company is used for large-scale or capital-market-driven investments.

Key features:

• Minimum 7 shareholders
• Can issue shares to the public
• Higher capital thresholds
• Heavier governance and disclosure rules

PAN registration is similar in process, but document scrutiny is higher.

Private vs Public Company in Nepal: PAN Registration Comparison

Insight:
For most foreign companies entering Nepal, the private company + PAN registration route offers the best balance of speed, control, and compliance risk.

Legal Basis for PAN Registration in Nepal

PAN registration is governed by:

• Income Tax Act, 2002
• Income Tax Rules, 2003
• Directives issued by the Inland Revenue Department

Company formation itself is governed by:

• Companies Act, 2006
• Foreign Investment and Technology Transfer Act (FITTA), 2019

These laws apply equally to private and public companies, but enforcement intensity differs.

Online PAN Card Registration in Nepal: Step-by-Step Process

The Inland Revenue Department now supports online PAN registration.

Step 1: Company Incorporation Completed

You must first register the company with the Office of Company Registrar.

Required outputs:

• Certificate of Incorporation
• Memorandum of Association
• Articles of Association

Step 2: Access the IRD Online Portal

PAN applications are submitted through the IRD’s online system.

You will select:

• Taxpayer type (company)
• Business nature
• Office jurisdiction

Step 3: Upload Required Documents

Documents typically include:

• Company registration certificate
• Board resolution authorizing PAN registration
• Director or authorized signatory ID
• Office lease agreement or utility bill

Step 4: Verification and Review

IRD officers verify:

• Company structure
• Shareholding details
• Declared business activities

Step 5: PAN Issuance

Once approved, the PAN number is issued electronically.

Documents Required for PAN Registration (Private vs Public Company)

Common Documents for Both

• Certificate of Incorporation
• MOA and AOA
• Director identification
• Registered office address proof

Additional Scrutiny for Public Companies

• Share capital structure details
• Prospectus or issuance plans
• Enhanced board resolutions

Practical tip:
Public companies face more questions at the PAN stage because IRD anticipates higher transaction volumes and public exposure.

How PAN Registration Impacts Ongoing Tax Compliance

Once PAN is issued, compliance obligations begin immediately.

Core Obligations

• Monthly withholding tax filings
• Advance tax payments
• Annual income tax returns
• Employee tax deductions

Failure to comply triggers:

• Monetary penalties
• Interest charges
• Banking restrictions
• Repatriation delays

VAT Registration vs PAN Registration in Nepal

PAN is mandatory for all companies. VAT is conditional.

You must register for VAT if:

• Annual turnover exceeds NPR 5 million
• You are engaged in VATable goods or services
• Required by sector-specific rules

Foreign companies often confuse these two. PAN comes first. VAT follows if applicable.

Private vs Public Company in Nepal: Risk Lens for Foreign Investors

From a compliance perspective, PAN registration reveals risk early.

Private companies offer:

• Lower audit exposure
• Faster regulatory responses
• Easier corrections if errors occur

Public companies involve:

• Higher regulatory visibility
• Slower issue resolution
• Stronger enforcement actions

For market entry, this difference matters more than many investors expect.

Common PAN Registration Mistakes Foreign Companies Make

Avoid these frequent errors:

1. Selecting the wrong business activity code
2. Inconsistent shareholding disclosure
3. Registering PAN before bank readiness
4. Using nominee directors without clarity
5. Treating PAN as a one-time task

Each mistake can delay operations by months.

PAN Registration and Banking in Nepal

Most Nepalese banks require:

• PAN certificate
• Company registration documents
• Tax clearance expectations

For foreign-owned companies, PAN is a gateway document for:

• Capital inflow accounts
• Operating accounts
• FX approvals

Employee Hiring and PAN Compliance

Once you hire employees, PAN obligations expand.

You must:

• Deduct employee income tax
• File monthly TDS returns
• Issue annual tax statements

This applies equally to private and public companies.

Strategic Recommendation for Foreign Companies

If your core question is private vs public company in Nepal, PAN registration tilts the decision.

For most foreign investors:

• Choose a private company
• Secure PAN early
• Stabilize compliance
• Scale later if needed

Public company status should be a deliberate second-phase decision, not a default entry choice.

Conclusion

Understanding private vs public company in Nepal without understanding PAN registration leaves a dangerous gap.

PAN is not paperwork. It is regulatory activation.

Foreign companies that treat PAN strategically move faster, face fewer audits, and protect profit repatriation. Those that ignore it pay later.

If you want Nepal to be an operational base rather than a compliance headache, start with the right structure and get PAN registration right the first time.

Frequently Asked Questions 

Is PAN registration mandatory for foreign companies in Nepal?

Yes. Any foreign company with Nepal-source income or employees must obtain a PAN. It is legally required under the Income Tax Act, 2002.

Can a foreign-owned private company get PAN online?

Yes. Foreign-owned private companies can apply online through the Inland Revenue Department portal, subject to document verification.

How long does PAN registration take in Nepal?

For private companies, it usually takes 3–7 working days. Public companies may take longer due to additional scrutiny.

Is PAN different from VAT in Nepal?

Yes. PAN is a tax identity. VAT is a transaction tax registration. PAN is mandatory. VAT depends on turnover and activity.

Can PAN registration be canceled later?

PAN can be deregistered only after company closure and tax clearance. It is not easily reversible.