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Travel Agency Registration in Nepal
25
Apr
What is travel agency registration in Nepal? Travel agency registration in Nepal is the legal process of establishing a tourism business entity authorized to provide travel-related services under the Tourism Act 2035 (1978) and Travel and Trekking Agency Rules 2062 (2005) . This comprehensive procedure involves company incorporation with the Office of Company Registrar (OCR), tax registration with the Inland Revenue Department (IRD), industry registration with the Department of Industry (DOI), obtaining a recommendation letter from the Provincial Tourism Office, and securing a final tourism license from the Department of Tourism or Provincial Tourism Ministry . The process requires NPR 25 lakhs minimum paid-up capital and a NPR 5 lakhs bank guarantee valid for 5 years .
Understanding Nepal's Travel Agency Regulatory Framework
Nepal's tourism industry is one of the strongest pillars of the national economy, contributing approximately 6.7% to GDP in 2024 . To ensure consumer protection, service quality, and financial accountability, the government mandates strict licensing requirements for all travel and tour businesses.
Key Governing Legislation
| Law | Purpose | Regulatory Authority |
|---|---|---|
| Tourism Act 2035 (1978) | Foundation for tourism enterprise regulation | Department of Tourism |
| Travel and Trekking Agency Rules 2062 (2005) | Operational standards and licensing procedures | Department of Tourism |
| Companies Act 2063 (2006) | Company incorporation and corporate governance | OCR |
| Industrial Enterprises Act 2076 (2020) | Industry classification and incentives | DOI |
| Foreign Investment and Technology Transfer Act 2075 (2019) | Regulates foreign investment eligibility | DOI/IBN |
Critical Restriction: Foreign Investment Prohibition
Travel agencies are explicitly included in Nepal's Negative List for Foreign Investment . Under FITTA 2019, foreign nationals cannot register, invest in, or operate travel agencies, trekking businesses, or mountaineering guide services in Nepal . Only Nepali citizens or entities wholly owned by Nepali citizens are eligible for travel agency registration .
Types of Travel Agencies in Nepal
| Agency Type | Activities Permitted | Minimum Capital | Bank Guarantee |
|---|---|---|---|
| Travel Agency | Tour packages, ticketing, hotel booking | NPR 25 lakhs | NPR 5 lakhs |
| Trekking Agency | Organized treks, hiking services | NPR 25 lakhs | NPR 5 lakhs |
| Tour Operator | Heritage, cultural, package tours | NPR 25 lakhs | NPR 5 lakhs |
| Expedition Agency | High-altitude mountaineering | NPR 50 lakhs | NPR 10 lakhs |
| Adventure/Rafting Agency | Rafting, bungee, paragliding | NPR 25 lakhs | NPR 5 lakhs |
| Combined License | All tourism activities | NPR 40 lakhs | NPR 10 lakhs |
Step-by-Step Travel Agency Registration Process
Phase 1: Company Incorporation
Step 1: Reserve Company Name
- Access www.ocr.gov.np (Office of Company Registrar portal)
- Submit 2-3 proposed names in English and Nepali
- Avoid restricted terms ("Royal," "National," "Nepal") requiring special clearance
- Approved names must proceed to registration within 90 days
Step 2: Prepare Corporate Documentation
- Memorandum of Association (MOA) with tourism objectives clearly stated
- Articles of Association (AOA) outlining governance structure
- Citizenship certificates of all shareholders and directors
- Recent passport-sized photographs (2 copies each)
- Proof of registered office address (lease agreement or ownership document)
Step 3: Submit Company Registration
- Upload documents to OCR portal within 90 days of name approval
- Minimum paid-up capital: NPR 25 lakhs for private limited companies
- Pay registration fees based on authorized capital:
| Authorized Capital | Registration Fee |
|---|---|
| Up to NPR 100,000 | NPR 1,000 |
| NPR 100,001 - 500,000 | NPR 4,500 |
| NPR 500,001 - 2,500,000 | NPR 9,500 |
| NPR 2,500,001 - 10,000,000 | NPR 16,000 |
| NPR 10,000,001 - 50,000,000 | NPR 19,000 |
| Above NPR 50,000,000 | NPR 30,000 |
- Obtain Certificate of Incorporation within 3-5 working days
Phase 2: Tax and Local Registration
Step 4: Obtain Permanent Account Number (PAN)
- Register at Inland Revenue Department (ird.gov.np)
- Submit application with company registration certificate and office address proof
- PAN certificate issued within 1 working day
Step 5: VAT Registration
- Mandatory if annual turnover exceeds NPR 3 million
- Standard VAT rate for travel services: 13%
- Export services (packages sold abroad) are zero-rated
Step 6: Ward Office Registration
- Submit company registration certificate, lease agreement, and PAN certificate to local ward office
- Obtain municipal business operating certificate
- Fees vary by location: NPR 8,000 - 15,000
Step 7: Open Corporate Bank Account
- Open account at commercial bank in company's name
- Deposit NPR 25 lakhs paid-up capital
- Obtain share registry certificate from OCR confirming capital deposit
Phase 3: Capital Verification and Bank Guarantee
Step 8: Arrange Bank Guarantee
- Obtain NPR 5 lakhs bank guarantee from B-class or higher commercial bank
- Guarantee must be:
- Made payable to "Department of Tourism" or respective Provincial Tourism Office
- Valid for 5 years matching license validity
- Refundable after 5 years upon license cancellation or non-renewal
- Bank charges: 1-2% of guarantee amount annually (NPR 5,000-10,000)
Phase 4: Provincial Tourism Office Recommendation
Step 9: Submit Recommendation Application Apply to Provincial Tourism Office (Bagmati Tourism Office for Kathmandu operations at https://tourismktm.bagamati.gov.np/) : Required Documents:
- Duly filled application form with declaration letter
- Company registration certificate (copy)
- PAN certificate (copy)
- MOA and AOA (notarized copies)
- Share registry showing NPR 25 lakhs capital
- Bank guarantee letter of NPR 5 lakhs
- Citizenship copies of all shareholders
- 5-year house rent agreement with landlord's citizenship, house number, location map, and recent utility bill
- Bio-data and 2 passport photos of authorized representative
- Board resolution approving travel company registration
- Power of attorney (if representative is not director)
- Letter of commitment to tourism office
Physical Presence Requirement:
- All board directors must appear personally at the tourism office for document verification and brief interview
- This requirement cannot be waived
Timeline: Recommendation letter issued within 3 working days after verification
Phase 5: Industry Registration
Step 10: Register with Department of Industry (DOI)
- Submit tourism office recommendation letter, company documents, and capital verification
- Register as "Service Industry" under tourism classification
- Obtain Industry Registration Certificate within 1 working day
Phase 6: Final Tourism License
Step 11: Submit Final License Application Apply to Provincial Tourism Office or Department of Tourism with:
- Industry registration certificate
- Company registration documents
- PAN/VAT certificates
- Bank guarantee of NPR 5 lakhs
- Proof of paid-up capital
- Passport-size photographs of directors
- Tax clearance certificate (if company 1 year old)
- Audit report (if applicable)
Step 12: Undergo Physical Inspection
- Tourism officials conduct physical inspection of business premises
- Verification includes: office infrastructure, signage, communication facilities, staffing, and operational readiness
Step 13: Obtain Tourism License
- Upon successful inspection, license issued within 2 working days
- License fee: NPR 25,000 (provincial) or NPR 15,000 (federal)
- Validity: 5 years from issuance date
Complete Registration Timeline
| Process Step | Expected Duration |
|---|---|
| Company Registration at OCR | 3-5 working days |
| PAN Registration | 1 working day |
| Ward Office Registration | 1 working day |
| Bank Account Opening | 1-3 working days |
| Capital Injection and Share Registry | 1 working day |
| Bank Guarantee Arrangement | 1-2 working days |
| Tourism Office Recommendation | 3 working days |
| Industry Registration at DOI/DSCI | 1 working day |
| Final Tourism License after Inspection | 2 working days |
| Total Estimated Time | 12-18 working days |
| Realistic Timeline (with buffers) | 20-45 days |
Cost Breakdown for Travel Agency Registration
| Cost Category | Amount (NPR) | Payment Recipient |
|---|---|---|
| Company Registration Fee | 9,500 - 75,000 | OCR |
| Ward Office Registration | 8,000 - 15,000 | Municipal ward office |
| PAN Registration | Free | IRD |
| VAT Registration | Free | IRD |
| Industry Registration Fee | 15,000 - 20,000 | DOI/DSCI |
| Tourism License Fee | 15,000 - 25,000 | Department/Provincial Tourism Office |
| Bank Guarantee | 500,000 (refundable) | Commercial bank |
| Paid-Up Capital | 2,500,000 (working capital) | Company bank account |
| Professional/Consultancy Fees | 50,000 - 100,000 | Legal consultants |
| Total Government Fees (excluding capital) | ~97,500 - 155,000 | — |
Post-Registration Compliance Requirements
| Compliance Item | Frequency | Requirement |
|---|---|---|
| License Renewal | Every 5 years | Submit renewal application, updated documents, pay renewal fee |
| Annual Report Filing | Bi-annual | Submit operational reports to Provincial Tourism Office |
| Tax Return Filing | Annual | Audited financial statements and profit tax submission |
| Bank Guarantee Renewal | Annual | Maintain validity; pay bank charges |
| Staff Training Certification | As required | First aid, safety procedures for adventure activities |
| Monthly Tourist Reports | Monthly | Tourist arrivals and activities to Department of Tourism |
Common Mistakes to Avoid
| Mistake | Consequence | Prevention Strategy |
|---|---|---|
| Insufficient paid-up capital | Application rejection | Deposit full NPR 25 lakhs before applying |
| Short-term lease agreement | Recommendation denial | Secure minimum 5-year lease |
| Missing director physical presence | Processing delay or rejection | Ensure all directors attend interview |
| Incorrect bank guarantee format | Application return | Specify "Department of Tourism" as beneficiary |
| Operating without tourism license | Fines up to 25% of annual turnover, closure | Complete full registration before commencing business |
| Attempting foreign ownership | Automatic rejection | Confirm 100% Nepali ownership structure |
Frequently Asked Questions (FAQs)
Q1: What is travel agency registration in Nepal? Travel agency registration is the legal process of establishing a tourism business involving company incorporation at OCR, tax registration, industry registration, Provincial Tourism Office recommendation, and final tourism license issuance .
Q2: Can foreigners register a travel agency in Nepal? No. Travel agencies are on Nepal's FDI Negative List. Only Nepali citizens or 100% Nepali-owned entities can register travel agencies .
Q3: What is the minimum capital required for travel agency registration? The minimum paid-up capital is NPR 25 lakhs for private limited companies, plus a NPR 5 lakhs bank guarantee valid for 5 years .
Q4: How long does travel agency registration take? The complete process typically requires 12-18 working days under optimal conditions, though 20-45 days is more realistic accounting for document preparation and scheduling .
Q5: What documents are required for tourism license? 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, board resolution, and director photographs .
Q6: Where do I apply for travel agency license? For Bagmati Province operations, apply at Bagmati Tourism Office (https://tourismktm.bagamati.gov.np/). Other provinces have respective Provincial Tourism Offices .
Q7: Is the bank guarantee refundable? Yes, the NPR 5 lakhs bank guarantee is refundable after 5 years upon license cancellation or non-renewal, provided no pending claims exist against the agency .
Q8: What are the penalties for operating without a license? Operating without a tourism license can result in fines up to 25% of annual turnover, business shutdown, and legal action under the Tourism Act .
Q9: Can one company operate multiple tourism services? Yes, with a Combined License (NPR 40 lakhs capital) allowing all tourism activities including tours, trekking, and expeditions .
Q10: How often must tourism licenses be renewed? Tourism licenses are valid for 5 years and must be renewed before expiry with updated compliance documents and renewal fees .
Conclusion: Building Compliant Travel Operations in Nepal
Understanding travel agency registration in Nepal requires mastery of the multi-departmental process spanning company incorporation, capital verification, bank guarantee arrangements, and tourism-specific licensing. The strict NPR 25 lakhs capital requirement and NPR 5 lakhs bank guarantee demonstrate the government's commitment to ensuring financially stable and accountable tourism operators. Success depends on meticulous document preparation, adherence to the sequential registration process, and maintaining ongoing compliance with renewal and reporting obligations. With Nepal's tourism sector continuing to grow post-pandemic, properly registered travel agencies position themselves for sustainable operations and access to government tourism promotion programs. For comprehensive travel agency registration services, contact CorporateNp – your trusted partner for navigating Nepal's tourism licensing landscape with expertise in OCR incorporation, Provincial Tourism Office coordination, and ongoing compliance management.
Disclaimer: This guide is provided for informational purposes only and does not constitute legal advice. Tourism regulations and licensing requirements may change. Consult qualified legal professionals and verify current requirements with the Department of Tourism, Provincial Tourism Offices, and other official government sources before making investment decisions. Service Provider: CorporateNp specializes in travel agency registration, tourism license acquisition, Provincial Tourism Office coordination, and ongoing compliance management for Nepali tourism entrepreneurs. References:
- Tourism Act 2035 (1978)
- Travel and Trekking Agency Rules 2062 (2005)
- Companies Act 2063 (2006)
- Industrial Enterprises Act 2076 (2020)
- Foreign Investment and Technology Transfer Act 2075 (2019)
- Department of Tourism, Government of Nepal
- Bagmati Tourism Office
- Office of Company Registrar (OCR)
