Branch Registration

Branch Registration (शाखा दर्ता) is the mandatory legal process of adding a secondary place of business under an existing corporate entity’s Permanent Account Number (PAN) as per the Income Tax Act, 2058.

Category Business Registration

Introduction: Branch Registration

Expanding your business footprint in Nepal requires more than just a physical lease; it necessitates formal Branch Registration to maintain tax transparency. Whether opening a new outlet in Kathmandu or expanding across provinces, a registered branch ensures your business can legally issue tax invoices and handle localized transactions.

By utilizing the expertise of Present Consultants Private Limited, you ensure that your secondary locations are properly synchronized with your principal place of business. This registration allows for seamless inventory movement and compliant payroll management, providing the structural legitimacy needed to scale your operations while remaining fully aligned with the Inland Revenue Department (IRD) regulations.

Legal Requirements: Compliance Under the Income Tax Act, 2058

Under Section 78 of the Income Tax Act, 2058, every “person” (including corporate entities) is identified by a single Permanent Account Number (PAN). However, the Act and its associated directives mandate that all business locations must be formally disclosed to the tax authorities. Operating an unregistered branch is considered a violation of tax transparency and can lead to the disallowance of localized business expenses.

Compliance is necessary to ensure that Value Added Tax (VAT) and Tax Deduction at Source (TDS) are accurately attributed to the specific geographical area where the revenue is generated.

Unified PAN Requirement: Pursuant to IRD directives, a domestic entity does not receive a new PAN for a branch; instead, the branch is added as a “Business Place” under the existing 9-digit PAN.
Biometric Authentication: In accordance with recent IRD protocols, an authorized representative must undergo biometric verification at the local Inland Revenue Office (IRO) to authenticate the branch location.
Localized Reporting: Under Section 81, the entity must ensure that financial records pertinent to the branch’s transactions are maintained and available for inspection by tax officials.
Ward and Local Level Alignment: Legal compliance requires prior registration at the Local Ward Office as per the Local Government Operation Act, 2074, before the IRD will approve the tax-level branch addition.
Liability and Responsibility: Under the Act, the parent entity remains centrally liable for all tax obligations, penalties, and filings incurred by the branch operations.

Process: Branch Registration

1. Address Finalisation (including Ward Registration)

We assist in securing a formal lease agreement and navigating the Local Ward Office registration. This step is critical, as a recommendation or registration certificate from the local government is a prerequisite for the IRD to recognize the new business address.

2. Physical form preparation and submission in IRD

Our team prepares the necessary dossier, including the Board Resolution for branch expansion and updated company documents. We then facilitate the mandatory physical attendance of an authorized director or representative at the Inland Revenue Office (IRO) governing the branch’s location.

3. Verification and approval by IRD

The tax officer conducts a thorough verification of the lease agreement and ward registration. At this stage, biometric data (digital photo and/or fingerprints) is captured to link the physical location to the company’s digital tax profile.

4. Certificate issuance by IRD

Upon successful verification, the IRD approves the branch addition in the Integrated Tax System. We then collect the updated PAN/VAT Certificate or branch-specific sub-certificate, which must be displayed prominently at the new premises to satisfy legal requirements.

Ready to Register your Branch

Expand Your Business Footprint with Total Legal Confidence. Scaling your company across Nepal requires meticulous attention to local and national tax regulations. Contact Present Consultants Private Limited today to handle your branch registration with precision, ensuring your new locations are fully compliant and ready for commercial operation.