Nepal does not have one standalone franchise-registration office or one generic government franchise form. A franchise is usually a contractual arrangement under which a brand owner or system provider permits a Nepal operator to use a trademark, business model, know-how, operating standards and related support. Fees or royalties may also be part of the commercial arrangement.
The practical task is to set up the underlying business lawfully, document the brand and operating rights, and then follow the domestic or foreign approval route that matches the parties and rights supplied. A franchise agreement alone does not authorise the operating business.
This guide maps the complete high-level journey. The foreign franchise guide covers the foreign-only path; domestic vs foreign franchise provides the deeper comparison.
How a franchise works in Nepal
The franchisor supplies the agreed brand, system or know-how. The franchisee, or Nepal operator, runs the local business through an appropriate entity or industry structure. The agreement allocates use rights, standards, territory, payments and the consequences of termination. The operating business still needs its own company, industry, tax and sectoral compliance work.
For a foreign provider, the same arrangement can also require a technology-transfer analysis. If royalties are later paid abroad, the approval, tax and foreign-exchange records become part of the payment file. These are connected layers, not one universal franchise licence.
Domestic and foreign franchise routes in Nepal
| Route | Starting question | Main focus |
|---|---|---|
| Domestic franchise | Are the provider and operator Nepal-based, with a local brand/system? | Operating entity, contract, IP and sector permissions. |
| Foreign franchise / technology transfer | Is a foreign provider supplying the franchise system, trademark, know-how, process or related services to a Nepal industry? | FITTA assessment, DOI approval where applicable, approved agreement and foreign-exchange records. |
FITTA section 2(f) includes franchise in its technology-transfer definition. The definition concerns an agreement between an industry and a foreign investor. It therefore supports a careful foreign-route analysis; it does not make every domestic franchise a DOI technology-transfer case.
Domestic franchise: the local operating route
A domestic franchise normally starts with the Nepal operator and the actual business activity. At a high level, the operator should establish the right Nepal business or industry structure, prepare a franchise or brand-licence agreement, confirm trademark ownership and permitted use, complete applicable tax and business registrations, and obtain the sector permissions required for the activity.
The domestic route is not a lesser version of a foreign franchise. It still needs a coherent agreement, clear IP rights, tax records and operational compliance. The difference is that it should not be presented as a DOI technology-transfer application unless the foreign-investment structure actually applies.
For the detailed domestic-versus-foreign decision, see Domestic vs Foreign Franchise in Nepal.
How to set up a franchise in Nepal
The first decision is whether the arrangement is domestic or foreign. The steps below give the complete high-level journey; the later sections explain the foreign technology-transfer, trademark and royalty layers in more detail.
Domestic franchise: seven practical steps
- Confirm the Nepal operator and business structure. Match the entity or industry structure to the activity that will actually be carried on.
- Define the arrangement. Identify the brand, operating system, support, territory, standards and commercial terms the operator will receive.
- Prepare the franchise or licence agreement. Make the parties, use rights, fees, reporting, term and termination provisions clear.
- Confirm trademark ownership and use rights. Check who owns each mark and that the Nepal operator has the contractual permission to use it.
- Obtain sector-specific approvals. The operating activity, rather than the word “franchise,” determines any sector permission.
- Complete tax and operational registrations. Keep the operator’s business and tax position aligned with the actual activity.
- Launch and maintain compliance. Use the agreed standards and retain the records needed for the business, brand and any regulator.
Foreign franchise / technology transfer: ten practical steps
- Confirm the Nepal operating entity or industry.
- Map the foreign rights being supplied, including the trademark, know-how, system or services.
- Prepare the franchise or technology-transfer agreement.
- Determine whether the FITTA/DOI route applies.
- Obtain the relevant approval where required.
- Confirm trademark documentation and permitted use.
- Obtain sector-specific licences for the actual activity.
- Prepare tax, banking and foreign-exchange records.
- Follow the approved royalty or repatriation process where applicable.
- Launch operations with the agreement, approvals and records aligned.
For the foreign-only process, use the foreign franchise guide. The technology-transfer approval guide, franchise agreement guide, royalty and repatriation guide, and trademark licensing guide provide the deeper analysis for each stage.
Confirm the Nepal operator and operating activity
The franchisee needs a lawful way to operate the actual business. That can involve company incorporation, industry registration, tax registration and activity-specific permissions depending on the structure and sector. A franchise contract does not itself authorise a food outlet, school, clinic, financial service or other regulated activity.
Write down the planned activity before selecting the route. It lets the parties check the operator’s registrations, the industry context and any sector approvals without assuming that a brand licence settles them.
Assess the foreign technology-transfer route when it applies
For a foreign-provider arrangement, FITTA section 7 permits foreign investment through technology transfer to an industry established in Nepal. The technology-transfer agreement must state its terms, cannot provide royalty repatriation above the prescribed ceiling and is approved by the foreign-investment approving body. DOI is the approving body up to the statutory threshold, with the Investment Board above it. The technology-transfer approval guide explains that procedure without duplicating it here.
DOI’s current Citizen Charter lists technology-transfer approval as a 3–7 day administrative service standard, free of charge. It is a DOI service standard, not an end-to-end promise for incorporation, sector permissions, banking or remittance.
Prepare the agreement and approval record
For the DOI technology-transfer service, the current Charter lists the prescribed application, original agreement, certified industry-registration certificate and approved-scheme copy; the latter is not needed for a TTA renewal. The list also identifies provider records, recipient industry board decision, and power-of-attorney/representative identification where used. The exact package differs for an individual or company provider.
The agreement should identify the parties, rights supplied, territory, operating standards, fees, reporting, term, termination and IP use. It should match the application rather than being a different commercial story. Use the franchise agreement guide for clause planning.
Protect the trademark and operating system
The agreement should state who owns each mark and how the Nepal operator may use it. DOI’s Industrial Property Section publishes current domestic and foreign trademark-registration checklists. DOI’s TTA materials also call for a valid trademark-registration certificate where a technology transfer includes a trademark.
This is not evidence of a universal standalone trademark-licence recordal. It is a reason to confirm both the mark’s registration evidence and the contract permissions. See trademark licensing for franchise businesses and the trademark registration guide.
Plan royalty, tax and foreign exchange before payment
For a foreign technology-transfer royalty, the NRB framework uses a Schedule 9 application based on the relevant approval or recommendation. The published evidence list includes corporate decisions, NRB foreign-investment recording proof, audited financials, tax evidence and compliance declarations; for TTA royalty it additionally lists the DOI approval letter, approved agreement, invoice and certified-auditor statement of amount due.
Do not publish or contract around a purported general royalty ceiling or current withholding rate without checking the current governing instrument. The royalty and repatriation guide explains the money-out stage.
Who does what in franchise setup?
| Authority | Role in franchise setup | When it matters |
|---|---|---|
| Office of Company Registrar (OCR) | Company incorporation and company records for an operator using a company structure. | When the Nepal operator is incorporated as a company. |
| Department of Industry (DOI) | Technology-transfer approval where the FITTA route applies; its Industrial Property Section publishes trademark service information. | Foreign technology-transfer analysis and trademark registration evidence. |
| Inland Revenue Department (IRD) | Tax registration and tax-compliance framework for the operating business. | When the operator completes applicable tax registrations and later maintains tax records. |
| Nepal Rastra Bank (NRB) | Foreign-exchange framework relevant to an approved foreign payment or repatriation. | When a foreign franchisor is to receive royalty or another outward payment. |
| Relevant sector regulator | Activity-specific operating permission. | Where the business is regulated, such as food, education, tourism, healthcare or financial services. |
| DOI Industrial Property Section | Published trademark registration and renewal checklists. | When protecting or evidencing the brand rights used by the franchise. |
Documents and records: domestic vs foreign route
There is no universal document bundle for every franchise. The documents depend on the operator, the activity and whether a foreign technology-transfer route applies.
| Document or record | Domestic franchise | Foreign franchise / TTA | Notes |
|---|---|---|---|
| Nepal operator’s company, business or industry record | Usually relevant to the operating structure. | Required for the Nepal recipient or industry context. | The correct record depends on the chosen structure and activity. |
| Applicable PAN/VAT and tax records | Relevant to the operating business where applicable. | Relevant to the operating business and later payment records where applicable. | Not a substitute for sector permission. |
| Franchise or brand-licence agreement | Core commercial record. | Original technology-transfer agreement is part of DOI’s listed TTA record. | The agreement should match the route and the rights actually supplied. |
| Trademark certificate or IP evidence | Confirms ownership and permitted use where relevant. | DOI TTA materials call for valid trademark-registration evidence where a trademark is included. | A trademark licence is distinct from a universal licence-recordal procedure. |
| Provider, recipient and authority records | Parties’ corporate approvals or authority records may be needed. | DOI’s Charter lists provider documents, recipient industry board decision and representative/POA records as applicable. | The Charter differentiates individual and company providers. |
| Sector-licence documents | Required only where the underlying activity is regulated. | Required only where the underlying activity is regulated. | A franchise agreement does not replace them. |
| Approval, invoice, audit and royalty records | Relevant if the commercial model calls for them. | Important for an approved foreign royalty or repatriation file. | NRB’s published TTA royalty evidence includes DOI approval, approved agreement, invoice and auditor statement. |
What Does Franchise Registration in Nepal Cost?
There is no single government franchise-registration fee for every arrangement. The identifiable charges arise from separate routes: company or business registration, trademark work, sector licences and any professional, drafting, notarisation or banking work. Those amounts vary by service and should not be presented as one franchise fee.
Where the foreign technology-transfer route applies, DOI’s current Citizen Charter lists the technology-transfer approval service as free of charge. That service entry does not make company, trademark, sector-licence, banking or professional costs free. Use the technology-transfer approval guide and the trademark registration guide for the relevant separate route.
How Long Does Franchise Setup Take in Nepal?
DOI’s current Citizen Charter gives a 3–7 day administrative service standard for technology-transfer approval where that service applies. It is not a promise that a complete franchise setup will finish within 3–7 days.
The full timetable also depends on the operator’s company or industry work, sector permissions, trademark process, banking and any royalty or repatriation stage. Treat the DOI figure as an official service standard for that one approval, not as an end-to-end transaction estimate.
Sector licences can be a separate gate
A franchise agreement does not replace permission to run the actual business. Food and restaurant operations, education, travel or tourism, healthcare, financial services and other regulated activities may each require a sector-specific approval or licence. The applicable regulator and route depend on the real activity, not on whether the parties call the arrangement a franchise.
Identify these permissions before launch so the agreement, operator’s registration and operating records tell the same story.
Common Franchise Setup Mistakes in Nepal
- Treating every franchise as a DOI technology-transfer case instead of first distinguishing a domestic arrangement from a foreign one.
- Assuming the franchise agreement itself authorises the business to operate.
- Signing royalty terms before checking the approval, tax and foreign-exchange records that may be needed for an outward payment.
- Leaving trademark ownership, registration evidence or the Nepal operator’s permitted use unclear.
- Submitting an approval file whose agreement, corporate decisions and description of rights do not match.
- Discovering sector-licence requirements after the commercial arrangement is already signed.
- Confusing a domestic brand licence with foreign technology transfer.
Before You Launch
Use this final check before opening the business:
- The Nepal entity or industry is ready for the actual activity.
- The franchise or technology-transfer agreement is signed and approved where applicable.
- Trademark ownership and the operator’s use rights are clear.
- All applicable sector permissions are ready.
- Tax and operational registrations are complete.
- Any foreign-exchange or royalty structure is documented with the appropriate approval, agreement and payment records.
- The operating, approval and contractual records remain aligned.
Need help mapping a foreign franchise to the correct approval record? Technology-transfer approval support can help organise the application and supporting documents for professional review.
Official Sources and Further Reading
- Office of Company Registrar — company registration information
- Office of Company Registrar — after-incorporation activities
- Foreign Investment and Technology Transfer Act, 2019 — sections 2(f), 7 and 15–17.
- DOI Foreign Investment and Technology Transfer Section
- DOI Citizen Charter — technology-transfer service row.
- DOI Technology Transfer Rules page
- DOI Industrial Property Section
- Inland Revenue Department — Income Tax Act
- NRB Foreign Exchange Management Department
