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. One in-person biometric visit is required.

VAT becomes mandatory once turnover crosses NPR 20,00,000 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 & Beverage License (DFTQC)

Food businesses in Nepal are regulated under the Food Act and licensed by the Department of Food Technology and Quality Control (DFTQC), often in coordination with your local municipality. Restaurants, cafes, hotels, and catering services — businesses serving prepared food directly to customers — fall under the DFTQC’s Category D (food service) license. You apply after your business is registered and you have your PAN.

Typical documents for the DFTQC application:

• Application form + business registration certificate + PAN certificate
• Citizenship of the owner(s)/directors and property proof (Lalpurja or lease)
• Building permit / approval and a kitchen layout & food-safety plan
• Staff medical / health certificates and food-handler training
• Menu / product list, water-quality test report, and ward/municipality approval

The premises are then inspected for hygiene, kitchen setup, waste management, and safety, and staff undergo medical checkups. Once cleared, you receive the license.

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 through DFTQC/your municipality, 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 20,00,000), a ward operating permit and signboard tax, and a food business license/hygiene clearance. 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 20,00,000 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. Food businesses are licensed by the Department of Food Technology and Quality Control (DFTQC) (often with the local municipality). Restaurants and cafes fall under the DFTQC’s Category D (food service) license. You apply after registering the business and getting a PAN; the premises are inspected, the license is valid one year and renews annually, and fees run roughly NPR 3,000–18,000 all-in over a 2–8 week process.

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.