The Complete Guide to Obtaining a PAN Card in Nepal

If you are comparing private vs public company in Nepal, one requirement cuts across both structures: PAN registration.
A Permanent Account Number (PAN) is not a formality. It is the foundation of tax compliance, banking, payroll, and profit repatriation in Nepal.

For foreign companies, misunderstandings around PAN often delay incorporation, bank account opening, and even FDI approvals. This guide explains how PAN works in Nepal, why it matters when deciding between a private vs public company in Nepal, and how foreign investors can obtain it smoothly.

By the end, you will know exactly who needs a PAN, how to apply, what documents are required, and how PAN obligations differ by company structure.

What Is a PAN Card in Nepal?

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

It is mandatory for:

• Companies
• Foreign investors
• Branch offices
• Representative offices
• Employees and contractors

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

Why PAN Matters When Comparing Private vs Public Company in Nepal

When foreign investors assess private vs public company in Nepal, tax visibility is often underestimated.

PAN determines:

• How your entity is tracked by tax authorities
• Whether you can open a corporate bank account
• Your eligibility for VAT registration
• Payroll and withholding tax compliance
• Profit repatriation documentation

Both private and public companies must obtain a PAN immediately after incorporation.

Private vs Public Company in Nepal: PAN Obligations at a Glance

Insight:
From a PAN perspective, the obligation is identical. The difference lies in reporting depth and audit intensity, not registration itself.

Who Needs a PAN in Nepal?

PAN is required for all income-earning or tax-liable entities, including:

• Foreign-owned private companies
• Public companies with foreign shareholding
• Branch offices of foreign companies
• Representative offices (for withholding compliance)
• Directors receiving remuneration
• Employees and consultants

If income or payments exist, PAN is non-negotiable.

Documents Required for PAN Registration in Nepal

The documents vary slightly based on private vs public company in Nepal, but core requirements remain consistent.

For Companies

• Certificate of incorporation
• Memorandum and Articles of Association
• Board resolution for PAN registration
• Registered office address proof
• Details of directors and shareholders
• Passport copies for foreign shareholders

For Foreign-Owned Entities

• FDI approval letter
• Company registration certificate
• Power of attorney (if filed by a representative)

Step-by-Step PAN Registration Process in Nepal

The PAN registration process follows a predictable structure.

1. Company Incorporation

PAN cannot be issued before legal registration.

2. Application Submission

Application is submitted to the Inland Revenue Office.

3. Document Verification

Authorities verify corporate and shareholder details.

4. PAN Issuance

PAN is issued, often within a few working days.

5. Activation for Compliance

The PAN becomes active for tax filings and payroll.

Online vs Offline PAN Registration in Nepal

Foreign companies often ask whether PAN can be obtained fully online.

Current reality:

• Application forms are available online
• Physical verification is still common
• Local representation is usually required

This is especially relevant for foreign investors unfamiliar with Nepal’s tax system.

PAN and VAT: Are They the Same?

No. PAN and VAT serve different purposes.

• PAN identifies the taxpayer
• VAT applies when turnover exceeds statutory thresholds

A private or public company in Nepal may have:

• PAN only, or
• PAN plus VAT registration

PAN Compliance Obligations After Registration

Once a PAN is issued, compliance becomes ongoing.

Key obligations include:

• Annual income tax returns
• Withholding tax filings
• Advance tax payments
• Payroll tax reporting

Failure to comply can block:

• Bank transactions
• Profit repatriation
• FDI renewals

Common Mistakes Foreign Companies Make

Foreign investors often underestimate local nuances.

Frequent errors include:

• Delaying PAN after incorporation
• Using incorrect shareholder details
• Ignoring withholding obligations
• Treating representative offices as exempt

These mistakes can create long-term regulatory friction.

How PAN Impacts Profit Repatriation

Profit repatriation approvals rely heavily on clean PAN records.

Authorities review:

• PAN filings
• Tax clearance certificates
• Consistency between filings and bank records

A weak PAN compliance trail can delay remittances by months.

Private vs Public Company in Nepal: Which Structure Is Easier for PAN Compliance?

From a pure PAN perspective:

• Private companies are simpler
• Public companies face higher scrutiny

Foreign investors usually start with a private company unless capital raising or listing is required.

Best Practices for Foreign Investors

To stay compliant and reduce friction:

1. Register PAN immediately after incorporation
2. Align shareholder details across all filings
3. Maintain clean payroll and withholding records
4. Engage local tax professionals early

This approach saves time, cost, and regulatory risk.

Conclusion

Choosing between a private vs public company in Nepal is a strategic decision.
But regardless of structure, PAN registration is the first compliance milestone.

A properly obtained and maintained PAN:

• Enables lawful operations
• Supports banking and payroll
• Protects profit repatriation rights
• Signals regulatory credibility

For foreign companies, treating PAN as a strategic asset rather than a formality makes all the difference.

Frequently Asked Questions

Is PAN mandatory for foreign companies in Nepal?

Yes. All foreign-owned entities must obtain a PAN to operate legally.

Can a foreign director apply for PAN personally?

Yes, if the director receives income or remuneration in Nepal.

How long does PAN registration take?

Typically a few working days after document submission.

Is PAN required before opening a bank account?

Yes. Banks require PAN for corporate account opening.

Does PAN differ for private vs public company in Nepal?

No. The PAN process is the same, but compliance scrutiny differs.