Surrogacy Laws in Nepal |
Is Surrogacy Legal?
Paternity & Legal Guide
The franchise model is booming in Nepal from food (KFC, Pizza Hut, Bota), retail (MINISO, Adidas), and education (Kumon, Abroad consultancies), to hospitality and fitness. With rising demand and reduced risk, franchising has become one of the most profitable business approaches for Nepali entrepreneurs.
But opening a franchise in Nepal is not as simple as signing a contract. You must comply with Nepal's foreign investment laws, company registration requirements, intellectual property rules, and local licensing procedures.
This guide explains how to start, register, and legally operate a franchise business in Nepal, step-by-step.
Yes. Franchising is fully legal in Nepal. However, Nepal does not yet have a specific “Franchise Law.”
Instead, franchise businesses are regulated through:
Contract Act 2056 — governs franchise agreements
Foreign Investment and Technology Transfer Act (FITTA) 2019 — if foreign brand is involved
Company Act 2063 — business registration
Intellectual Property Laws — trademark & brand protection
Tax laws (Income Tax Act + VAT Act)
Local Government Licensing Rules
Foreign franchise entry requires prior approval; local Nepali franchise startups only need company registration.
Product Franchise
Step 1: Choose the Franchise Brand
Consider:
Brand reputation
Royalty fees
Training & support
IP protection
Market demand
Step 2: Get the Franchise Agreement
This is the legal contract between franchisor and franchisee.
Includes:
Territory
Fees
Royalty structure
Brand usage rights
Quality standards
Termination clauses
Step 3: Register a Company in Nepal
Register a Private Limited Company under OCR.
Documents required:
MOA/AOA
Shareholders’ IDs
Registration forms
Office address proof
Step 4: Apply for PAN/VAT
Mandatory for all franchise businesses.
Step 5: Trademark & IP Protection (Highly Recommended)
Register the brand logo/name at the Department of Industry (optional for Nepali franchise, mandatory for foreign one).
Step 6: Get Local Licenses
Depending on the business type:
Food license
Health license
Municipality operating license
Fire safety clearance
Tourism license (hotels/restaurants)
Step 7: Open the Franchise Location
Follow franchisor’s:
Branding
Design
SOP
Training guidelines
Step 8: Annual Compliance & Renewals
Company renewal
VAT returns
Tax filings
Local renewal
Royalty payment compliance
Foreign franchise registration requires government approval under FITTA 2019.
Requirements
Franchise Agreement
Technology Transfer Agreement
Royalty payment structure
FDI approval (if foreign investment is involved)
RBI-equivalent approval for outward payments (for franchisor)
Process
Draft Franchise & Technology Transfer Agreement
Get approval from Industry Department
Register company at OCR
Register as a taxpayer (PAN/VAT)
Operate as per franchisor guidelines
Costs vary depending on:
Type of franchise
Foreign or Nepali brand
Royalty fees
Initial franchise fee
Setup cost
Local franchise setup cost: NPR 5–20 lakhs
International franchise fee: USD 5,000–50,000
Royalty fee: 4%–10% of revenue
Company registration: NPR 15,000–25,000
Local operating license: NPR 5,000–15,000
Fit-out & equipment: NPR 5–50 lakhs
Low-risk compared to starting new brand
Brand recognition & trust
Training & operational support
Standardized business model
High chance of profitability
Faster ROI than new startups.
Disclaimer: This article is for informational purposes only and shall not be construed as legal advice, advertisement, personal communication, solicitation or inducement of any sort from the firm or any of its members. The firm shall not be liable for consequences arising out of any action undertaken by any person relying on the information provided herein.
-icon.webp){kind=icon}
-icon.webp){kind=icon}
