How to Register a Cafe or Restaurant in Nepal: Licenses, Cost & Steps

Opening a Cafe or Restaurant in Nepal at a Glance

Step 1: Choose Your Business Structure

Before any food-specific license, you register the business itself. The first decision is firm or company:

• A sole proprietorship firm is the cheapest and fastest option — ideal for a single-owner cafe. The trade-off is unlimited personal liability. See our guide to sole proprietorship registration in Nepal.
• A Pvt. Ltd. company is the better choice if you have co-founders, outside investment, plans for multiple outlets, or simply want limited liability to protect your personal assets. See single-shareholder Pvt. Ltd. registration.

Step 2: Register the Business

Where you register depends on the structure you chose:

You will need the owner’s/partners’ citizenship, photos, your proposed business name, and proof of the premises (Lalpurja or a rent agreement). A Pvt. Ltd. additionally needs an MOA and AOA. Keep your rent agreement in the business’s name — ward offices and the food license process both ask for it.

Step 3: Get Your PAN and VAT Registration

Every business needs a Permanent Account Number (PAN) from the Inland Revenue Department before it can issue valid bills or open a bank account. If you registered a Pvt. Ltd., it now comes with registration — since Asar 15, 2083 you download the PAN and PAN certificate from CAMIS, with no trip to the tax office. A firm still applies at the IRD, with one in-person biometric visit.

VAT becomes mandatory once turnover crosses NPR 30,00,000 for a service or mixed business — which most cafes and restaurants are. Once registered, you charge 13% VAT, issue proper VAT invoices, and file monthly VAT returns. Many hospitality businesses register for VAT voluntarily from day one because corporate clients and suppliers expect VAT bills.

Step 4: Ward Office Registration & Signboard Tax

Register your outlet at your local ward office using your business registration certificate, PAN, and rent agreement. At this stage you typically pay house rent tax (10% of monthly rent, often prepaid for several months) and an annual business / signboard tax that varies by municipality and the size of your premises.

Step 5: Food Business License (Local Level)

Food businesses in Nepal are now governed by the Food Hygiene and Quality Act 2081, which replaced the old Food Act 2023. Under section 9, you must hold a food business license before you start operating. For hotels, restaurants, cafes, food courts, canteens, catering, eateries, and homestays, you apply to your local level — the chief of your rural municipality or municipality, or the officer they designate. (The Department of Food Technology and Quality Control, DFTQC, licenses food importers and exporters instead.)

The Act asks you to attach:

• A copy of your business registration certificate
• Details of the food you’ll prepare or sell, and the expected annual quantity
• A description of the hygiene and quality practices you’ll follow in preparing and storing food
• Your business address, contact number, and the key people managing the business

Your local level may ask for more, such as a kitchen layout or staff health certificates, so get its checklist before you apply. The licensing officer inspects the premises (and can have samples lab-tested) and, if everything is in order, issues the license with its operating conditions within 30 days.

Running a food business without this license is an offence under section 40. If your cafe already holds a license from the old Food Act, section 60 treats anything done under that Act as done under the new one.

Step 6: Liquor License (If You Serve Alcohol)

If your cafe or restaurant will serve beer, wine, or spirits, you need a separate liquor license — an on-premises license for venues serving alcohol for immediate consumption. Alcohol sale is governed by the Liquor Act and excise rules. The District Administration Office (DAO) issues the license, and the core step is obtaining an Excise Duty Certificate (after you have your business registration, ward registration, and VAT). The license and excise certificate are renewed annually.

Once your business and ward registrations are in place, the liquor-licensing step itself is relatively quick — often about 5–10 days. Note that, by law, alcohol can only be sold between 10:00 AM and 10:00 PM. If you won’t serve alcohol, skip this step entirely.

Other Things That May Apply

• Tourist-standard restaurants/bars may register with or seek classification from the Department of Tourism.
• Playing music? Public performance of recorded music can require clearance/royalty payment through the relevant music royalty body.
• Import of equipment or specialty ingredients? You may need an EXIM code to import commercially.

Cost & Timeline Summary

Realistically, a small cafe that doesn’t serve alcohol can be fully registered and licensed for well under NPR 50,000, with the whole process taking 2–4 weeks depending on how quickly the food and ward approvals come through.

After You Open: Running the Cafe

Registration gets you legal — running the place day to day is the next challenge. As a VAT/PAN-registered cafe you’ll be issuing compliant invoices on every sale, tracking inventory, sending orders to the kitchen, and reconciling the day’s takings. Doing all of that on paper is where most new cafes leak money and time.

Purpose-built cafe software handles it for you. TableSathi — a cafe POS and billing platform built for Nepal — automates KOT (kitchen order ticket) printing, generates VAT/PAN invoices with proper fiscal-year numbering, deducts inventory automatically from recipes as items sell, and gives you live table and order status. That means your billing is IRD-compliant from day one and your end-of-day stock count and reconciliation are done automatically — exactly the parts of compliance this guide is about, handled in software.

Quick Checklist

Frequently Asked Questions

How do I register a cafe or restaurant in Nepal?

First register the business — a sole proprietorship firm or a Pvt. Ltd. company. Then get a PAN (and VAT if applicable), register at your ward office, obtain a food business license from your local level, and apply for a liquor license if you’ll serve alcohol. See the full picture in our company registration guide.

What licenses do I need to open a cafe in Nepal?

A business registration certificate, a PAN (plus VAT once turnover crosses NPR 30,00,000), a ward operating permit and signboard tax, and a food business license from your local level. Restaurants serving alcohol also need a liquor license. Requirements vary by municipality — confirm with your local ward.

Do I need VAT registration for a restaurant in Nepal?

VAT is mandatory once turnover crosses NPR 30,00,000 for a service/mixed business, which most cafes are. You then charge 13% VAT, issue VAT invoices, and file monthly returns. Many cafes register voluntarily from day one.

How much does it cost to register a restaurant in Nepal?

The business registration is modest — roughly NPR 5,000–20,000 for a firm or NPR 15,000–35,000 for a Pvt. Ltd. Add the ward permit, food license, and (if serving alcohol) a liquor license, whose fees vary by municipality. A small cafe without alcohol is usually fully licensed for under NPR 50,000.

Do I need a separate food license to run a cafe in Nepal?

Yes. Under the Food Hygiene and Quality Act 2081, a cafe or restaurant needs a food business license from its local level (your rural municipality or municipality) before opening. The premises are inspected and the license is issued within 30 days if everything is in order. It’s valid for two years, renewal is due at least 35 days before expiry, and each local level you operate in needs its own license.

Should a cafe register as a firm or a company?

A small single-owner cafe is often fine as a sole proprietorship firm (cheapest, fastest). Choose a Pvt. Ltd. company if you have co-founders, investors, multiple outlets, or want limited liability to protect personal assets.