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.
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:
In short, the private vs public company in Nepal debate is incomplete without understanding how PAN registration changes your compliance footprint.
A Permanent Account Number (PAN) is a unique tax identification number issued by the Inland Revenue Department.
It applies to:
For companies, PAN links every tax obligation to one identity.
Before registering for PAN, foreign investors must select the correct legal form under the Office of Company Registrar.
A private company is the most common entry vehicle for foreign investors.
Key features:
PAN registration usually happens immediately after incorporation.
A public company is used for large-scale or capital-market-driven investments.
Key features:
PAN registration is similar in process, but document scrutiny is higher.
| Factor | Private Company | Public Company |
|---|---|---|
| Typical investor use | SMEs, subsidiaries, back-office | Infrastructure, banking, telecom |
| PAN registration timeline | 3–7 working days | 7–14 working days |
| Documentation complexity | Moderate | High |
| Post-PAN compliance load | Medium | Heavy |
| IRD scrutiny level | Standard | Enhanced |
| Cost of error | Manageable | Very high |
Insight:
For most foreign companies entering Nepal, the private company + PAN registration route offers the best balance of speed, control, and compliance risk.
PAN registration is governed by:
Company formation itself is governed by:
These laws apply equally to private and public companies, but enforcement intensity differs.
The Inland Revenue Department now supports online PAN registration.
You must first register the company with the Office of Company Registrar.
Required outputs:
PAN applications are submitted through the IRD’s online system.
You will select:
Documents typically include:
IRD officers verify:
Once approved, the PAN number is issued electronically.
Practical tip:
Public companies face more questions at the PAN stage because IRD anticipates higher transaction volumes and public exposure.
Once PAN is issued, compliance obligations begin immediately.
Failure to comply triggers:
PAN is mandatory for all companies. VAT is conditional.
You must register for VAT if:
Foreign companies often confuse these two. PAN comes first. VAT follows if applicable.
From a compliance perspective, PAN registration reveals risk early.
Private companies offer:
Public companies involve:
For market entry, this difference matters more than many investors expect.
Avoid these frequent errors:
Each mistake can delay operations by months.
Most Nepalese banks require:
For foreign-owned companies, PAN is a gateway document for:
Once you hire employees, PAN obligations expand.
You must:
This applies equally to private and public companies.
If your core question is private vs public company in Nepal, PAN registration tilts the decision.
For most foreign investors:
Public company status should be a deliberate second-phase decision, not a default entry choice.
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.
Yes. Any foreign company with Nepal-source income or employees must obtain a PAN. It is legally required under the Income Tax Act, 2002.
Yes. Foreign-owned private companies can apply online through the Inland Revenue Department portal, subject to document verification.
For private companies, it usually takes 3–7 working days. Public companies may take longer due to additional scrutiny.
Yes. PAN is a tax identity. VAT is a transaction tax registration. PAN is mandatory. VAT depends on turnover and activity.
PAN can be deregistered only after company closure and tax clearance. It is not easily reversible.