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.
A Permanent Account Number (PAN) in Nepal is a unique tax identification number issued by the Inland Revenue Department (IRD).
It is mandatory for:
Without a PAN, a business cannot legally operate in Nepal.
When foreign investors assess private vs public company in Nepal, tax visibility is often underestimated.
PAN determines:
Both private and public companies must obtain a PAN immediately after incorporation.
| Aspect | Private Company | Public Company |
|---|---|---|
| PAN Requirement | Mandatory | Mandatory |
| Issuing Authority | Inland Revenue Department | Inland Revenue Department |
| Timing | After incorporation | After incorporation |
| Tax Filings | Corporate income tax | Corporate income tax |
| Public Disclosure | Limited | Higher |
| Foreign Investor Scrutiny | Moderate | High |
Insight:
From a PAN perspective, the obligation is identical. The difference lies in reporting depth and audit intensity, not registration itself.
PAN is required for all income-earning or tax-liable entities, including:
If income or payments exist, PAN is non-negotiable.
The documents vary slightly based on private vs public company in Nepal, but core requirements remain consistent.
The PAN registration process follows a predictable structure.
PAN cannot be issued before legal registration.
Application is submitted to the Inland Revenue Office.
Authorities verify corporate and shareholder details.
PAN is issued, often within a few working days.
The PAN becomes active for tax filings and payroll.
Foreign companies often ask whether PAN can be obtained fully online.
Current reality:
This is especially relevant for foreign investors unfamiliar with Nepal’s tax system.
No. PAN and VAT serve different purposes.
A private or public company in Nepal may have:
Once a PAN is issued, compliance becomes ongoing.
Key obligations include:
Failure to comply can block:
Foreign investors often underestimate local nuances.
These mistakes can create long-term regulatory friction.
Profit repatriation approvals rely heavily on clean PAN records.
Authorities review:
A weak PAN compliance trail can delay remittances by months.
From a pure PAN perspective:
Foreign investors usually start with a private company unless capital raising or listing is required.
To stay compliant and reduce friction:
This approach saves time, cost, and regulatory risk.
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:
For foreign companies, treating PAN as a strategic asset rather than a formality makes all the difference.
Yes. All foreign-owned entities must obtain a PAN to operate legally.
Yes, if the director receives income or remuneration in Nepal.
Typically a few working days after document submission.
Yes. Banks require PAN for corporate account opening.
No. The PAN process is the same, but compliance scrutiny differs.