Hospitality Company Registration in Nepal

What is a Hospitality Company?

A hospitality company is a business entity that primarily focuses on providing services related to accommodation, food and beverage, entertainment, and travel. In Nepal, these companies play a crucial role in the tourism industry, which is a significant contributor to the country’s economy.

Hospitality companies in Nepal can include:

Hotels and resorts
Restaurants and cafes
Travel agencies
Tour operators
Event management firms
Catering services
Transportation services catering to tourists

These businesses aim to create memorable experiences for guests, whether they are local residents or international tourists. Hospitality companies in Nepal often showcase the country’s rich cultural heritage, natural beauty, and renowned hospitality, making them an integral part of the nation’s tourism sector.

Why Register a Hospitality Company in Nepal?

Registering a hospitality company in Nepal offers numerous advantages for entrepreneurs looking to tap into the country’s growing tourism industry. Here are some compelling reasons to consider:

Booming tourism sector: Nepal’s tourism industry has been steadily growing, attracting millions of visitors annually. This presents ample opportunities for hospitality businesses to thrive.
Government support: The Nepalese government has implemented various policies to encourage foreign investment in the tourism sector, making it an attractive option for both local and international entrepreneurs.
Rich cultural and natural resources: Nepal’s diverse landscapes, from the Himalayas to lush national parks, along with its rich cultural heritage, provide a unique backdrop for hospitality ventures.
Legal recognition: Registration gives your company legal status, allowing you to operate officially and enjoy the benefits of a formal business structure.
Access to financing: Registered companies have better access to loans and other financial services from banks and financial institutions.
Credibility: A registered company gains credibility among customers, partners, and suppliers, which is crucial in the hospitality industry.
Tax benefits: Registered companies may be eligible for certain tax incentives and deductions, particularly those operating in the tourism sector.

By registering your hospitality company in Nepal, you position yourself to take advantage of these benefits while contributing to the country’s growing tourism industry.

Where to Register a Hospitality Company in Nepal?

Registering a hospitality company in Nepal involves interacting with several government bodies. The primary institutions you’ll need to engage with are:

1. Office of Company Registrar (OCR)

The OCR is the main authority responsible for company registration in Nepal. This office handles the initial registration process, including:

Name approval
Document submission
Issuance of company registration certificate

Location: Tripureshwor, Kathmandu

2. Inland Revenue Department (IRD)

After company registration, you’ll need to register for tax purposes with the IRD. This includes:

Obtaining a Permanent Account Number (PAN)
Registering for Value Added Tax (VAT), if applicable

Location: Lazimpat, Kathmandu

3. Department of Tourism (DoT)

For specific hospitality businesses like hotels, resorts, and travel agencies, you’ll need to obtain additional licenses from the DoT. They handle:

Tourism industry-specific licenses
Classification of hotels and resorts

Location: Bhrikutimandap, Kathmandu

4. Local Municipality Office

Depending on your business location, you’ll need to register with the local municipality for:

Business operating license
Local tax registration

Location: Varies based on your business address

5. Nepal Tourism Board (NTB)

While not directly involved in registration, the NTB can provide valuable information and support for hospitality businesses. They offer:

Industry insights
Promotional opportunities
Networking events

Location: Bhrikutimandap, Kathmandu

It’s important to note that while these are the main offices involved, the registration process may require interaction with other government bodies depending on the specific nature of your hospitality business. Consider seeking assistance from a local business consultant or lawyer to navigate the process smoothly.

What is the Process of Registering a Hospitality Company in Nepal?

Registering a hospitality company in Nepal involves several steps. Here’s a detailed breakdown of the process:

Name Reservation:
- Submit a company name application to the Office of Company Registrar (OCR).
- The OCR will check for name availability and approve if unique.
Document Preparation:
- Draft the Memorandum of Association (MOA) and Articles of Association (AOA).
- Prepare other required documents like citizenship copies of shareholders, passport-sized photos, etc.
Company Registration:
- Submit all prepared documents to the OCR.
- Pay the registration fee.
- Receive the Company Registration Certificate.
PAN Registration:
- Apply for a Permanent Account Number (PAN) at the Inland Revenue Department (IRD).
- Submit required documents and pay the fee.
Industry-Specific Registration:
- For hotels, restaurants, or travel agencies, register with the Department of Tourism.
- Submit necessary documents and pay applicable fees.
Local Registration:
- Register your business with the local municipality.
- Obtain a business operating license.
Additional Permits:
- Depending on your specific hospitality service, you may need additional permits (e.g., liquor license for bars).

Throughout this process, it’s crucial to ensure all documents are accurately prepared and submitted. Each step may involve waiting periods for processing and approval. It’s advisable to start the process well in advance of your planned business launch date.

Remember, while this outlines the general process, specific requirements may vary based on the type of hospitality business you’re registering. Consulting with a local business expert or lawyer can help ensure you don’t miss any crucial steps in the registration process.

What Documents are Needed for Hospitality Company Registration?

When registering a hospitality company in Nepal, you’ll need to prepare and submit various documents. Here’s a comprehensive list of the essential paperwork:

Company Registration Application Form
Proposed company name (at least 3 options)
Memorandum of Association (MOA)
Articles of Association (AOA)
Citizenship certificates of all shareholders (for Nepali citizens)
Passport copies (for foreign shareholders)
Recent passport-sized photographs of all shareholders
No Objection Letter from the concerned authority (if applicable)
Board resolution for company formation
Lease agreement or ownership document of the company’s registered office
Bank statement showing the initial capital deposit
Power of Attorney (if someone is applying on behalf of the shareholders)
Feasibility study report (for large-scale hospitality projects)
Environmental Impact Assessment (EIA) or Initial Environmental Examination (IEE) report (if required)
Letter of recommendation from the Ministry of Culture, Tourism and Civil Aviation (for certain tourism-related businesses)

For specific hospitality businesses, additional documents may be required:

For Hotels/Resorts:
- Building completion certificate
- Fire safety clearance
- Health and sanitation certificate
For Restaurants:
- Food handler’s certificate
- Kitchen and dining area layout plan
For Travel Agencies:
- Proof of office space (minimum 100 sq. ft.)
- Guarantee deposit certificate

Remember, the exact documentation requirements may vary based on the specific type of hospitality business and any changes in government regulations. It’s always advisable to check with the Office of Company Registrar or a local business consultant for the most up-to-date list of required documents.

How Long Does it Take to Register a Hospitality Company in Nepal?

The timeline for registering a hospitality company in Nepal can vary depending on several factors. Here’s a general overview of the expected duration for each stage of the process:

Name Reservation: 1-3 days
- This process is usually quick if your proposed name is unique and acceptable.
Document Preparation: 3-7 days
- The time needed depends on how quickly you can gather and prepare all necessary documents.
Company Registration: 7-14 days
- Once all documents are submitted, the Office of Company Registrar typically processes the application within this timeframe.
PAN Registration: 2-3 days
- Obtaining a Permanent Account Number from the Inland Revenue Department is usually a swift process.
Industry-Specific Registration: 14-30 days
- Registering with the Department of Tourism can take longer, especially for larger hospitality projects that require more scrutiny.
Local Registration: 3-7 days
- The time required for local municipality registration can vary depending on the location.
Additional Permits: Varies
- The timeline for obtaining additional permits (like liquor licenses) can vary significantly based on the specific permit and local regulations.

In total, the entire process of registering a hospitality company in Nepal typically takes about 1 to 2 months. However, this is an estimate, and the actual time can be shorter or longer depending on various factors such as:

Completeness and accuracy of submitted documents
Complexity of the hospitality business
Current workload of government offices
Any unforeseen bureaucratic delays

It’s important to note that larger hospitality projects, such as resort developments, may take longer due to additional requirements like environmental impact assessments.

To ensure a smooth and timely registration process, it’s advisable to:

Prepare all documents thoroughly before starting the process
Double-check all information for accuracy
Follow up regularly with the relevant offices
Consider hiring a local business consultant familiar with the process

Remember, patience is key when dealing with bureaucratic processes. While the registration timeline can sometimes be frustrating, proper planning and preparation can help minimize delays.

What is the Cost of Registering a Hospitality Company in Nepal?

The cost of registering a hospitality company in Nepal can vary depending on several factors, including the type of company, its authorized capital, and specific business activities. Here’s a breakdown of the main costs involved:

Name Reservation Fee: NPR 100-500
- This nominal fee is paid to the Office of Company Registrar.
Company Registration Fee:
- Private Limited Company:
  - Up to NPR 1 million capital: NPR 9,500
  - NPR 1-5 million capital: NPR 16,500
  - Above NPR 5 million: NPR 19,500 + 0.1% of additional capital
- Public Limited Company:
  - Starts at NPR 40,000 and increases based on authorized capital
PAN Registration: NPR 200-500
- Fee for obtaining Permanent Account Number from IRD.
VAT Registration: Free
- But compulsory for businesses with annual turnover exceeding NPR 5 million.
Industry-Specific Registration:
- Department of Tourism registration fees vary:
  - Hotels: NPR 5,000 – 100,000 (depending on star rating)
  - Travel Agencies: NPR 5,000 – 40,000
  - Restaurants: NPR 2,000 – 10,000
Local Municipality Registration: NPR 1,000 – 5,000
- Varies by municipality and business size.
Additional Costs:
- Lawyer/Consultant fees: NPR 20,000 – 100,000 (if hired)
- Notary charges: NPR 500 – 2,000
- Document preparation and printing: NPR 2,000 – 5,000
Minimum Capital Requirements:
- Private Limited Company: No minimum
- Public Limited Company: NPR 10 million

It’s important to note that these are approximate costs and can change. Larger hospitality projects may incur additional expenses for environmental assessments, feasibility studies, and other specialized reports.

Also, consider ongoing costs such as annual renewal fees, audit fees, and tax payments. While not part of the initial registration, these are important for budgeting purposes.

To get the most accurate and up-to-date cost information, it’s advisable to consult with the Office of Company Registrar or a local business consultant. They can provide a detailed breakdown based on your specific hospitality business plan.

What are the Post-Registration Requirements for a Hospitality Company?

After successfully registering your hospitality company in Nepal, there are several post-registration requirements you need to fulfill to ensure compliance with local laws and regulations. These ongoing obligations are crucial for maintaining your company’s good standing. Here are the key post-registration requirements:

Annual Returns Filing:
- Submit annual returns to the Office of Company Registrar within 6 months of the fiscal year-end.
- This includes financial statements, shareholder details, and other company information.
Tax Compliance:
- File monthly VAT returns (if VAT registered)
- Submit quarterly advance tax payments
- File annual income tax returns within 3 months of fiscal year-end
Audit Requirements:
- Appoint an auditor annually
- Conduct annual audits of financial statements
- Submit audited reports to tax authorities
Social Security Fund (SSF) Registration:
- Register with SSF if you have employees
- Make regular contributions as per SSF regulations
License Renewals:
- Renew business operating license annually with the local municipality
- Renew industry-specific licenses (e.g., hotel license, restaurant permit) as required
Compliance with Labor Laws:
- Maintain proper employee records
- Ensure compliance with minimum wage laws
- Provide mandatory benefits like paid leave, overtime pay, etc.
Environmental Compliance:
- Adhere to environmental regulations relevant to your hospitality business
- Conduct periodic environmental audits if required
Health and Safety Standards:
- Maintain hygiene standards, especially for food-related businesses
- Ensure fire safety measures are in place and regularly inspected
Foreign Investment Reporting:
- If your company has foreign investment, report to Nepal Rastra Bank annually
Board Meetings and Minutes:
- Hold regular board meetings as per company law
- Maintain proper minutes of these meetings
Update Company Information:
- Inform the Company Registrar of any changes in company structure, directors, or registered address

Remember, failing to meet these post-registration requirements can result in penalties, fines, or even the suspension of your business license. It’s advisable to set up a compliance calendar to track these obligations and ensure timely fulfillment.

Consider engaging a local accountant or business consultant to help manage these ongoing requirements, especially in the initial years of operation. This can help ensure full compliance and allow you to focus on running and growing your hospitality business.

What are the Specific Requirements for Hospitality Companies in Nepal?

Hospitality companies in Nepal face several industry-specific requirements beyond general business regulations. These requirements are designed to ensure quality service, safety, and adherence to tourism standards. Here are the key specific requirements for hospitality companies:

Tourism Industry License:
- Obtain a license from the Department of Tourism
- Specific licenses required for hotels, resorts, restaurants, travel agencies, etc.
Star Classification (for Hotels):
- Hotels must apply for star classification
- Meet specific criteria for facilities, services, and staff qualifications
Minimum Infrastructure Requirements:
- Hotels: Specified number of rooms, restaurants, conference facilities based on category
- Restaurants: Adequate kitchen space, dining area, restrooms
- Travel Agencies: Minimum office space (usually 100 sq. ft.)
Staff Qualifications:
- Employ staff with relevant qualifications in hospitality management
- Provide regular training to staff on hospitality skills and customer service
Health and Hygiene Standards:
- Maintain cleanliness in all areas, especially in food preparation and service
- Regular health check-ups for staff handling food
Safety Measures:
- Install fire safety equipment and conduct regular drills
- Implement security measures to ensure guest safety
Environmental Compliance:
- Adhere to waste management regulations
- Implement eco-friendly practices, especially in sensitive ecological areas
Foreign Currency Handling:
- Obtain permission to accept foreign currency payments
- Maintain proper records of foreign currency transactions
Menu and Pricing Transparency:
- Clearly display menu items and prices
- Include all taxes in the displayed prices
Tourist Information:
- Provide accurate information about local attractions, customs, and safety
Accessibility:
- Ensure facilities are accessible to persons with disabilities
Insurance:
- Maintain appropriate insurance coverage for the business and guests
Local Community Engagement:
- Participate in local tourism development initiatives
- Support local communities through employment and sourcing

These requirements may vary slightly depending on the specific type of hospitality business and its location within Nepal. It’s crucial to stay updated on any changes in regulations by maintaining regular contact with the Department of Tourism and relevant local authorities.

Remember, meeting these specific requirements not only ensures legal compliance but also contributes to the overall quality of Nepal’s tourism industry. This, in turn, can enhance your business’s reputation and attract more customers.

What are the Benefits of Registering a Hospitality Company in Nepal?

Registering a hospitality company in Nepal offers numerous advantages that can significantly contribute to your business’s success and growth.

Banasthali, Kathmandu, Nepal

info@companynp.com

+977 9802360825