Simplifying the PAN Card Registration Process in Nepal

If you are a foreign company planning to enter Nepal, one of the first decisions you will face is private vs public company in Nepal. That choice directly affects your PAN card registration, tax exposure, governance obligations, and long-term scalability.

Many foreign investors underestimate this step. They assume PAN registration is a simple tax formality. In reality, PAN is the foundation of your legal and fiscal identity in Nepal. It determines how you open bank accounts, hire employees, invoice clients, repatriate profits, and remain compliant.

This guide explains the private vs public company in Nepal debate through a practical lens. We focus on PAN card registration, documentation, timelines, compliance risks, and investor-specific considerations. By the end, you will know which structure fits your goals and how to register your PAN smoothly.

What Is a PAN Card in Nepal and Why It Matters

A Permanent Account Number (PAN) is a unique tax identification number issued by Nepal’s Inland Revenue authorities.

Without a PAN, a company cannot legally operate in Nepal.

Why PAN is non-negotiable

A valid PAN is required to:

• Open corporate bank accounts
• Register for VAT (if applicable)
• File income tax returns
• Hire employees and withhold payroll taxes
• Execute contracts and issue invoices
• Repatriate dividends and profits

For foreign companies, PAN is also a credibility signal. Banks, regulators, and counterparties all verify it.

Private vs Public Company in Nepal: The Legal Context

Before discussing PAN registration, you need clarity on company structure.

Private company in Nepal

A private limited company is the default choice for most foreign investors.

Key characteristics:

• Minimum shareholders: 1
• Maximum shareholders: 101
• Shares are not publicly traded
• Lower disclosure requirements
• Faster incorporation and PAN issuance

Public company in Nepal

A public company is designed for capital-intensive or large-scale operations.

Key characteristics:

• Minimum shareholders: 7
• No upper limit on shareholders
• Can issue shares to the public
• Higher regulatory and disclosure burden
• Longer setup and compliance timelines

How Company Type Affects PAN Card Registration

PAN registration is mandatory for both private and public companies, but the process depth differs.

Private vs public company in Nepal: PAN impact overview

Insight: PAN is issued by the same authority, but public companies undergo additional verification due to shareholder scale and public interest.

Step-by-Step PAN Card Registration Process in Nepal

Regardless of structure, PAN registration follows a defined sequence.

1. Company incorporation approval

You must first complete incorporation under Nepalese company law. PAN cannot be issued before this step.

2. Document preparation

Authorities verify ownership, control, and intended business activities.

3. PAN application submission

Applications are submitted to the Inland Revenue Office assigned to your registered address.

4. Verification and issuance

Officials review documents, may request clarifications, and issue the PAN certificate.

Required Documents for PAN Registration

Documentation is where private vs public company in Nepal differences become visible.

Core documents for all companies

• Certificate of incorporation
• Memorandum of Association
• Articles of Association
• Board resolution for PAN registration
• Registered office address proof

Additional documents for foreign-owned companies

• Foreign investment approval
• Passport copies of foreign shareholders
• Investment remittance evidence
• Power of attorney (if applicable)

Extra requirements for public companies

• Prospectus or capital structure disclosure
• Share allotment details
• Enhanced governance declarations

Common Mistakes Foreign Companies Make

PAN delays usually come from avoidable errors.

Top mistakes to avoid

1. Mismatch between stated activities and approved business scope
2. Inconsistent shareholder information
3. Incorrect registered office address
4. Missing foreign investment approvals
5. Assuming private and public companies follow identical rules

A clean PAN application can save weeks of delay.

Private vs Public Company in Nepal: Tax and Compliance Implications

PAN registration is only the beginning.

Corporate tax exposure

Both structures are subject to corporate income tax, but:

• Public companies face higher scrutiny
• Transfer pricing reviews are more common
• Disclosure thresholds are stricter

Ongoing obligations

• Annual tax filings
• Withholding tax compliance
• VAT filings (if registered)
• Payroll tax reporting

Public companies must also comply with additional reporting standards.

When a Public Company Makes Sense for Foreign Investors

A public company is not wrong. It is simply strategic.

Consider a public company if you:

• Plan to raise capital locally
• Need public credibility at scale
• Operate in regulated infrastructure sectors
• Have long-term listing ambitions

For most foreign service providers, a private company is sufficient.

Practical Comparison: Private vs Public Company in Nepal

PAN Registration Timeline Expectations

Typical timelines

• Private company: 5–10 working days
• Public company: 10–20 working days

Timelines depend on document readiness and regulator workload.

Why PAN Accuracy Matters for Lead-Gen and Operations

Foreign companies often view PAN as a backend task. That is a mistake.

A correctly registered PAN:

• Prevents tax penalties
• Improves bank onboarding speed
• Supports clean audits
• Builds regulator confidence

From a business development perspective, PAN compliance signals serious market intent.

Expert Tips for a Smooth PAN Registration

• Align business activities with actual operations
• Use consistent names across all documents
• Appoint a local compliance coordinator
• Plan PAN registration alongside bank account setup
• Treat PAN as a strategic asset, not paperwork

Conclusion

Choosing between a private vs public company in Nepal is more than a legal formality. It shapes your PAN card registration, tax exposure, compliance workload, and long-term flexibility.

For most foreign companies, a private company offers faster PAN issuance, lower risk, and operational clarity. Public companies suit investors with scale, capital-raising goals, and long-term local presence.

Whichever path you choose, treat PAN registration as a foundational step. Get it right, and everything else becomes easier. Get it wrong, and delays compound quickly.

Frequently Asked Questions (FAQ)

Is PAN mandatory for foreign companies in Nepal?

Yes. All foreign-owned entities must obtain a PAN before operating, hiring, or invoicing in Nepal.

Does PAN registration differ for private vs public company in Nepal?

Yes. Public companies face additional documentation and verification due to shareholder scale and disclosure rules.

How long does PAN registration take in Nepal?

Private companies usually receive PAN within 5–10 working days. Public companies may take longer.

Can PAN be registered before opening a bank account?

Yes. In fact, PAN is required to open most corporate bank accounts in Nepal.

Is VAT registration the same as PAN registration?

No. PAN is mandatory for all companies. VAT is required only if turnover thresholds are met.