Can You Actually Get a PayPal Account in Nepal? Here’s the Fix

A PayPal account in Nepal cannot be opened using a Nepali address, ID, or bank account, since PayPal doesn’t support Nepal. A functioning solution involves creating a US LLC, obtaining an EIN, and opening a US business bank account. Once that’s in place, opening a PayPal business account is a quick, simple process.

Entrepreneurs in Nepal’s major cities (Kathmandu, Pokhara, and Biratnagar) face the same barriers. Transacting with clients who prefer or only accept payments through PayPal, working with online marketplaces that only pay out through PayPal, and using software products that require or enable PayPal for subscription payments are just some of the barriers faced.

In many cases, PayPal is considered available in Nepal, but a careful review of the service’s terms and conditions may provide more insight into the barriers encountered. As with many products and services, customers in Nepal, and possibly in other South Asian countries, will face barriers to opening a payment processing account.

Why You Can’t Open a PayPal Account in Nepal With a Local Address

Although many articles state that PayPal is available in Nepal, opening a PayPal account to receive payments requires that the country be on PayPal’s list of supported payment account countries, and Nepal is not on that list. There is no information about when that may change. 

There have been reports of talks between PayPal and Nepal Rastra Bank regarding PayPal’s entry into the Nepalese market. These talks have been confirmed. However, nothing has been launched. Until PayPal modifies its country list, all should assume that PayPal is not available in Nepal, and baseless claims that PayPal is available in Nepal, or that only the function to receive payments is restricted, should be ignored.

In the meantime, PayPal customers in restricted countries can create PayPal accounts in unrelated, unrestricted countries. The country that accepts the account application determines whether the application is successful, not the customer’s citizenship. For example, a Nepalese citizen applying for a PayPal account in the U.S. would apply for a different account than one in Nepal.

The Three Prerequisites You Need Before Applying for PayPal

There are three prerequisites for the PayPal signup process. They are:

• Formation of a US Limited Liability Company (US LLC) by the founder or the US member who will control the company.
• An Employer Identification Number (EIN) with a CP 575 confirmation letter issued by the IRS.
• A US business bank account.

As mentioned above, a freelancer in Nepal who has clients and invoices them through Wise still needs an LLC and an EIN to set up a PayPal account in the name of the US business. Payment transactions will not substitute for the LLC and EIN.

Documents and Information PayPal’s Business Signup Requires

Once you have an active LLC and a business bank account, PayPal’s business signup asks for:

• LLC’s official name as documented in the state formation records
• EIN
• Business address located in the US
• Business bank account details
• Government-issued ID of the individual beneficially owning and/or controlling the business
• Business email address and business phone number
• Products or services the business sells

Inconsistency is the main reason for application delays. Documents and records must be reviewed and compared to one another. PayPal reviewers will flag an inconsistency in records as a potential error.

Step-by-Step: How to Open the PayPal Business Account

1. Choose the business account type to avoid having to switch later.
2. Add the LLC’s information, including the name, the state where the LLC was formed, the type of LLC, and the nature of the LLC’s business, and provide it exactly as it appears in the formation papers.
3. Enter the EIN if asked. PayPal usually doesn’t ask for this, but including it avoids the hassle of having to provide it later.
4. Add the person’s name, date of birth, and address, and also add the person’s ID and upload the ID. This person is the Responsible Person.
5. Link a US bank account. This account should be the LLC’s bank account.
6. Enter a phone number and an email address associated with the LLC.
7. Be specific when providing information about the business. “Consulting” or “Online sales” could result in a manual review.
8. Wait for the outcome. Any inconsistency in the information provided may result in a manual review.

Common Reasons PayPal Accounts Get Flagged or Held

The first large payment gets processed immediately. An account receiving a very large payment by way of its first (and possibly only) transaction will raise a flag with PayPal. Establishing a normal transaction pattern with smaller payments first will avoid a hold.

The business description is inconsistent with the product or service sold. An account registered with PayPal with a business description of “consulting” may sell products and services under that business and receive a review and a possible hold.

Miscellaneous errors occur due to carelessness or oversight. Simple orthographic and syntactic errors (spelling and word order) can lead to a hold being placed on a payment. This is particularly problematic with the formation documents and papers used to obtain an EIN.

A founder tries to cut corners. Using a relative’s or friend’s PayPal account to receive payment for a business service or product will result in a hold on that account. Likewise, that account can be restricted or frozen without any recourse to the business owner.

Other Payment Processors to Consider Besides PayPal

Once the business has an LLC and a business bank account, other options besides PayPal become available. For businesses that require more robust payment solutions, refer to our payment processing resource for online businesses to learn about Stripe, Shopify Payments, and other merchant-of-record providers.

Why Keeping Your LLC in Good Standing Matters for PayPal

PayPal or not, if the LLC is not in good standing, it will not matter. The bank account and PayPal will also be closed. It is good practice to check the status of the annual reports and ensure they are up to date. A good practice to also ensure the business is collecting payments legally is to review the status of the annual report each year.

Frequently Asked Questions About PayPal in Nepal

Can I use a personal PayPal account?

PayPal accounts are tied to a country, and business accounts are tied to the same countries as personal accounts. The PayPal account itself will not change anything. The US entity will.

Do I need to be in the US to set up the account?

No. If you have an EIN and a business bank account, you can set up PayPal from anywhere.

Will PayPal come to Nepal?

PayPal has been in talks to come to Nepal, but it is not available there yet. Check their website to be sure.

Does my EIN affect my PayPal application?

Not at all. You can apply with or without it. However, if your business is not verified, it will be verified later, and it probably already has a bank account.

Why is my account limited?

Limits are usually imposed due to a name mismatch on IDs, a large first transaction, or a business description that is too vague.

Can I use my relative’s PayPal account to do business?

Yes, but that account can be restricted at any time for any reason, and there is nothing the business owner can do about it.