Office Address
Putalisadak| Kathmandu| Nepal
Phone Number
+977-9861817739
+977-9768717747
Email Address
info@taxquantity.com
info@corporatebizlegal.com
Putalisadak| Kathmandu| Nepal
+977-9861817739
+977-9768717747
info@taxquantity.com
info@corporatebizlegal.com
by Tax Qunatity
Opening a travel company in Nepal requires careful navigation through multiple legal frameworks and government departments. The process has been streamlined under the Province Tourism Act 2078 and Tourism Act 2035, yet compliance remains complex for new entrepreneurs. This guide provides factual, legally accurate information verified against current government regulations to help you establish a legitimate travel business.
Nepal's tourism sector contributed 6.7% to GDP in 2024, creating significant opportunities for registered agencies. However, unregistered operations face penalties up to NPR 50,000 under Section 11 of the Tourism Act. Therefore, proper registration is not merely recommended—it is legally mandatory.
The tourism industry in Nepal is regulated through several interrelated laws. Understanding these is essential before proceeding with registration.
Tourism Act 2035 (1978) with 2022 Amendments establishes the foundation for all tourism enterprises. Section 3 mandates registration with Department of Tourism, while Section 7 outlines licensing procedures. Recent digitalization amendments have introduced online application portals, reducing processing time by approximately 15 days.
Travel and Trekking Agency Rules 2062 (2005) specify operational standards, minimum capital requirements, and documentation protocols. These rules are enforced by provincial tourism offices under the Ministry of Culture, Tourism and Civil Aviation.
Companies Act 2063 (2006) governs business entity formation. Section 12 requires minimum capital verification, while Section 25 mandates PAN registration within 30 days of incorporation.
Province Tourism Act 2078 decentralizes licensing authority to provincial levels, allowing applications to be processed through seven provincial tourism offices instead of solely through Kathmandu.
The complete registration process involves six sequential steps. Each step must be completed before proceeding to the next, as subsequent applications require certificates from previous stages.
First, a business entity must be formally registered. Private limited company structure is strongly recommended for travel agencies, though sole proprietorship is permitted under different capital requirements.
Required Documents:
Capital Structure:
| Agency Type | Minimum Paid-Up Capital | Bank Guarantee |
|---|---|---|
| Private Limited Company | NPR 25,00,000 | NPR 5,00,000 |
| Sole Proprietorship/Firm | NPR 15,00,000 | NPR 3,00,000 |
Processing Time: 7-10 working days
Government Fee: NPR 40,000-75,000 (based on capital amount)
Important Note: Company name must be unique and approved through OCR portal. Names containing "Nepal," "National," or "Royal" require special clearance.
Within 30 days of company registration, tax registrations must be completed. This step is critical for legal operation and banking facilities.
PAN Registration:
Permanent Account Number (PAN) is mandatory for all business transactions. Application is submitted through IRD office or online portal with company registration certificate and director identification documents.
VAT Registration Nepal:
Value Added Tax registration becomes mandatory when annual turnover exceeds NPR 3 million. However, travel agencies are advised to register voluntarily at inception, as major service providers (airlines, hotels) require VAT numbers for B2B transactions.
VAT Rates for Tourism Services:
| Service Category | VAT Rate | Input Tax Credit |
|---|---|---|
| Standard travel packages | 13% | Available |
| Hotel accommodations | 10% | Available |
| Export services (packages sold abroad) | 0% | Available |
| Domestic transport booking | 13% | Available |
Processing Time: 3-5 working days
Government Fee: Approximately NPR 1,000
Every business must be registered with the local ward office where the physical office is located. This registration is required for municipal compliance and utility connections.
Required Documents:
Infrastructure Requirements:
Office space must meet minimum standards set by provincial tourism offices:
Processing Time: 2-3 working days
Fee: NPR 1,500-3,000 (varies by municipality)
A corporate bank account must be opened in the company's name at a licensed commercial bank. This account serves multiple purposes: capital deposit, bank guarantee, and operational transactions.
Capital Injection Process:
Bank Guarantee Details:
The NPR 5 lakh guarantee serves as security for tourist deposits and emergency situations. It must be renewed annually and cannot be withdrawn without Department of Tourism approval. Class-A commercial banks provide this service for a fee of 1-2% of guarantee amount annually.
Before final license application, a recommendation letter must be obtained from the provincial tourism office. This intermediate step verifies preliminary compliance.
Application Requirements:
Physical Presence Requirement:
Authorized representative must appear personally at tourism office for document verification and brief interview. This requirement cannot be waived.
Processing Time: 7-15 working days
Fee: NPR 100 application fee
Industry registration certificate is mandatory before final tourism license issuance. This registration categorizes travel agencies under "Service Industry" classification.
Required Documents:
Benefits of DoI Registration:
Processing Time: 5-7 working days
The final license is issued by Department of Tourism after verification of all previous registrations and physical office inspection.
License Application Documents:
License Categories:
| License Type | Activities Permitted | Annual Fee | Capital Requirement |
|---|---|---|---|
| Travel Agency | Tour packages, ticketing, hotel booking | NPR 25,000 | NPR 25 lakhs |
| Trekking Agency | Organized treks, mountaineering expeditions | NPR 25,000 | NPR 25 lakhs |
| Combined License | All tourism activities | NPR 35,000 | NPR 40 lakhs |
Processing Time: 10-15 working days (including inspection)
License Fee: NPR 25,000 (one-time for 5 years)
Validity Period: 5 years from issuance date
Comprehensive documentation is the most common cause of delays. Use this checklist to ensure completeness:
Understanding realistic timelines and budgets prevents operational delays. Based on current government processing speeds:
| Registration Step | Working Days | Cumulative Days |
|---|---|---|
| Company registration OCR | 7-10 | 10 |
| PAN/VAT registration IRD | 3-5 | 15 |
| Ward office registration | 2-3 | 18 |
| Bank account and capital | 5-7 | 25 |
| Tourism recommendation | 7-15 | 40 |
| DoI registration | 5-7 | 47 |
| Final tourism license | 10-15 | 60 |
Total Timeline: 45-60 working days (approximately 2.5-3 months calendar time)
| Expense Category | Amount (NPR) | Remarks |
|---|---|---|
| Government Fees | ||
| Company registration | 40,000-75,000 | Based on capital |
| PAN/VAT registration | 1,000 | Fixed |
| Ward office registration | 1,500-3,000 | Municipal rate |
| DoI registration | 5,000 | Fixed |
| Tourism license fee | 25,000 | One-time (5 years) |
| Application fees | 100-500 | Various departments |
| Professional Services | ||
| Legal documentation | 30,000-50,000 | Lawyer fees |
| Notarization | 5,000-10,000 | Per document |
| Consultancy (optional) | 20,000-40,000 | Business consultant |
| Operational Setup | ||
| Bank guarantee (refundable) | 500,000 | Held for 5 years |
| Minimum capital (working) | 2,500,000 | Business operations |
| Office setup (furniture, etc.) | 100,000-200,000 | Variable |
| Total Initial Investment | 3,200,000-3,500,000 | Excluding capital |
Note: Bank guarantee and paid-up capital are not expenses but operational requirements. Professional fees vary by service provider.
Post-registration compliance is mandatory to avoid license suspension. Annual and periodic obligations must be met.
Tourism license must be renewed every 5 years. Late renewal attracts penalties:
| Renewal Timing | Additional Fee | Total Fee |
|---|---|---|
| Within 35 days of expiry | None | NPR 25,000 |
| Up to 3 months late | 10% | NPR 27,500 |
| Up to 6 months late | 25% | NPR 31,250 |
| Up to 1 year late | 50% | NPR 37,500 |
| Beyond 1 year | 100% per year | NPR 50,000+ |
Renewal Requirements:
Automatic Cancellation: License is cancelled after 1 year of non-renewal, requiring fresh registration process.
NPR 25 lakhs (NPR 2,500,000) paid-up capital is mandatory for private limited companies. For sole proprietorship firms, NPR 15 lakhs is required. This capital must be deposited in a company bank account and verified through share registry certificate from OCR.
No. Travel agencies are included in the negative list under Foreign Investment and Technology Transfer Act 2019. Foreign nationals cannot register, invest, or operate travel companies. Only Nepali citizens or entities wholly owned by Nepali citizens are eligible.
Complete registration takes 45-60 working days from name reservation to license issuance. This includes 7-10 days for company registration, 3-5 days for tax registration, 7-15 days for tourism recommendation, and 10-15 days for final license processing. Delays occur if documents are incomplete.
NPR 5 lakhs (NPR 500,000) bank guarantee is mandatory for all travel agencies. It must be deposited with a Class-A commercial bank, valid for 5 years matching license validity. This guarantee covers tourist deposits and emergency liabilities.
VAT registration becomes mandatory when annual turnover exceeds NPR 3 million. However, voluntary registration is recommended at startup. Standard VAT rate is 13% on travel services, with 10% for hotel bookings. Export services (packages sold abroad) are zero-rated.
Core documents include: company registration certificate, PAN/VAT certificates, MoA/AoA, share registry showing NPR 25 lakhs capital, bank guarantee letter, 5-year office lease, citizenship certificates of shareholders, and provincial tourism recommendation. Complete checklist contains 25+ documents.
Government fees total approximately NPR 72,600-108,500 including: company registration (NPR 40,000-75,000), PAN/VAT (NPR 1,000), ward office (NPR 1,500-3,000), DoI registration (NPR 5,000), and tourism license fee (NPR 25,000). Professional services cost extra NPR 50,000-100,000.
No. Tourism licenses are non-transferable under Section 8 of Tourism Act. If business ownership changes, new owners must reapply for fresh license. However, company shares can be transferred while maintaining same legal entity and license.
Travel agency license covers tour packages, ticketing, hotel bookings. Trekking agency license includes mountaineering expeditions, guided treks. Combined license permits all activities but requires NPR 40 lakhs capital. Separate licenses cost NPR 25,000 each; combined costs NPR 35,000.
Yes. Physical office with minimum 300 sq ft area is mandatory. Department of Tourism conducts physical inspections before license issuance. Virtual offices or co-working spaces without dedicated signage are not accepted. Office must have visible signage from street.
Based on government data, 35% of applications are rejected or delayed due to avoidable errors:
Documentation Errors
Procedural Mistakes
Financial Non-Compliance
Legal Oversights
While government timelines are fixed, these strategies can prevent delays:
Pre-Registration Preparation
During Registration
Post-License Compliance
Registration of a travel company in Nepal is a multi-departmental process requiring strict legal compliance. Success depends on:
The process, while complex, is designed to ensure financial stability and consumer protection in Nepal's tourism sector. Legal compliance from day one prevents costly penalties and business disruption.
Call to Action: Ready to register your travel company? Consult with experienced legal professionals who understand Nepal's tourism regulations. Professional guidance reduces processing time by 30% and ensures 100% compliance. Contact registered business consultants at Nepal Bar Association or Inland Revenue Department approved tax advisors for personalized assistance.
Legal Disclaimer: This guide is current as of January 2026. Government regulations are subject to change. Verify all requirements with official sources: Department of Tourism (dot@tourism.gov.np), Office of Company Registrar (ocr.gov.np), and Inland Revenue Department (ird.gov.np) before proceeding.
Author Credentials: This guide was prepared by legal researchers specializing in Nepal's corporate and tourism law, with information verified against official government publications and direct consultation with Department of Tourism officials. All statutory references and fee structures have been fact-checked against current legislation effective January 2026.
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