Travel & Trekking Agency Licensing at a Glance
Quick answer — what the Rules require:
- Firm or company, your choice. Rule 5(1) expressly contemplates both — you do not have to incorporate.
- Paid-up capital — travel agency: NPR 5,00,000 (firm) or NPR 10,00,000 (company). Trekking agency: NPR 3,00,000 (firm) or NPR 6,00,000 (company).
- Bank guarantee in the Ministry’s name for the whole licence tenure — NPR 3,00,000 (travel) or NPR 2,00,000 (trekking).
- Licence fee NPR 15,000; valid five years; renewal NPR 10,000.
- Late renewal costs +25% for three months, then +50% for three more — after that the licence is void.
A correction worth making. Several widely circulated guides state that a travel agency in Nepal needs NPR 25,00,000 paid-up capital, a NPR 5,00,000 bank guarantee, or a NPR 25,000 licence fee, and that the agency must be a private limited company. None of those figures appears in the Travel and Trekking Agency Rules 2062, and the Rules expressly allow a firm. The figures in this guide are quoted from the Rules with rule numbers attached so you can verify them yourself rather than take our word for it.
Source: Travel and Trekking Agency Rules, 2062 (2005), Rules 4, 5 and 7, as published by the Nepal Law Commission. Subordinate rules are amended from time to time — confirm the current figures with the Department of Tourism before you transfer money.
Which Licence Do You Actually Need?
The Tourism Act 2035 treats a travel agency and a trekking agency as different licensed activities, and the requirements differ by roughly a third. In practice:
- A travel agency sells the journey — ticketing, hotel bookings, transport, inbound and outbound tour arrangements.
- A trekking agency organises trekking and expeditions, which brings staff, porters, routes and permits into scope.
Agencies that do both need to be licensed for both. The cheaper trekking licence does not cover ticketing, and the travel licence does not cover putting clients on a mountain. Deciding this before you file matters, because your registered capital has to match the licence you are asking for.
| Requirement | Travel agency | Trekking agency | Rule |
|---|---|---|---|
| Paid-up capital — firm | NPR 5,00,000 | NPR 3,00,000 | 5(1)(a) |
| Paid-up capital — company | NPR 10,00,000 | NPR 6,00,000 | 5(1)(b) |
| Bank guarantee (Ministry’s name) | NPR 3,00,000 | NPR 2,00,000 | 5(2) |
| Licence fee | NPR 15,000 | 4 | |
| Licence duration | 5 years | 7(1) | |
| Renewal fee (before expiry) | NPR 10,000 | 7(2) | |
Firm or Company? The Rules Let You Choose
Rule 5(1) sets one capital figure for a firm and a higher one for a company, which means a sole proprietorship or partnership firm can hold a travel or trekking licence. That is worth knowing, because a firm halves the capital you must show.
That said, most agencies should still incorporate. A tourism business carries real liability — you are moving people through mountains and holding client money in advance — and a firm gives the owner unlimited personal liability for it. The extra NPR 5,00,000 or NPR 3,00,000 of capital buys you a separate legal person, the ability to bring in shareholders, and a business that survives a change of owner. Register the firm only if capital is genuinely the binding constraint.
Note for public companies. Rule 5(4) provides that if the agency is registered as a public limited company, the paid-up capital required under prevailing company law applies instead — which is far higher. Public limited is not a route to take casually here.
See our company registration guide for the full firm-versus-company comparison.
The Bank Guarantee — and the Trap in It
Rule 5(2) requires the guarantee to be lodged in the name of the Ministry, before the licence is issued, and maintained for the tenure of the licence. It is security, not a fee — but it is money your bank will hold against your facilities for five years.
The trap is in Rule 5(3b): if a licence holder fails to maintain either the paid-up capital or the bank guarantee, the licence becomes ipso facto void. Not suspended, not subject to a warning letter — void. Agencies that let a guarantee lapse when renewing bank facilities, or that quietly reduce capital, can discover they have been trading without a licence.
Licence Fee, Duration and the Renewal Schedule
The licence costs NPR 15,000 (Rule 4) and runs for five years (Rule 7(1)). Renewal is NPR 10,000 and must be paid before expiry (Rule 7(2)).
If you miss the date, Rule 7(3) adds a surcharge on a sliding scale:
| When you renew | What you pay |
|---|---|
| Before expiry | NPR 10,000 |
| Within 3 months after expiry | Renewal fee + 25% |
| The following 3 months | Renewal fee + 50% |
| After that | Licence ipso facto void (Rule 7(4)) |
Five years is long enough that the renewal date falls outside most people’s working memory, which is exactly why agencies lose licences this way. Diarise it the day the licence is issued, and set the reminder for four years and nine months.
Hotels, Resorts and Lodges
Accommodation is licensed separately from agency work. Larger hotels and resorts deal with the Department of Tourism, including star classification above a certain size, while smaller lodges and guesthouses are generally handled at the local level.
The thing that surprises operators is how many separate approvals a hotel needs. Accommodation licensing is one. A food business licence from the local level under the Food Hygiene and Quality Act 2081 is another, because a kitchen is a food business regardless of the hotel licence. A liquor licence is a third if you serve alcohol. Budget for three, not one.
Homestays
Homestays are the lightest route into this sector, and deliberately so. They sit outside the Department of Tourism’s agency licensing and are registered at the local level under the Homestay Working Procedure, through the Local Homestay Management Committee together with your municipality or rural municipality.
The defining constraint is size: the commonly cited limit is four rooms and eight beds. Below that you are a homestay; above it you are running a lodge, and you fall into the accommodation rules above with the heavier registration that implies. Homestays must also satisfy conditions on cleanliness, sanitation and fire safety, and community homestays register collectively through their committee rather than individually.
If you are testing the idea, start as a homestay. It is the one part of Nepali tourism where you can legally take paying guests without capital requirements, a bank guarantee or a Department of Tourism licence. Growing past four rooms is a decision to take deliberately, with the heavier regime priced in — not something to drift into.
Party Palaces and Banquets
A party palace is not a tourism licence at all. It is a local-level business licence plus a food licence, and a liquor licence if you serve alcohol. Venues also commonly need local approvals around parking, noise and fire safety, and these are set municipality by municipality — ask your ward before signing a lease on a hall.
Cost and Timeline
Indicative, for a trekking agency registered as a Pvt. Ltd., as of Ashwin 2083:
| Item | Indicative cost (NPR) | Time |
|---|---|---|
| Pvt. Ltd. registration (OCR, all-in) | 15,000 – 35,000 | 7 – 12 working days |
| Paid-up capital to be shown | 6,00,000 (company) | — |
| Bank guarantee (held, not spent) | 2,00,000 | Bank-dependent |
| Dept. of Tourism licence fee | 15,000 | Inspection-dependent |
| PAN / VAT, local business licence | Varies | A few days |
The headline: the capital and the guarantee are the cost, not the fees. The government charges NPR 15,000 for the licence; what actually determines whether you can open is whether you can park six to twelve lakh in the business and leave a guarantee with your bank for five years.
Want the figures checked against the current Rules before you commit? Subordinate rules get amended and published guides go stale — tell us whether you are opening a travel agency, a trekking agency or both, and we will confirm the capital and guarantee you actually need today.
Check my requirements“UdhamSathi helped me build my company.” — UdhamSathi client
Quick Checklist
Before you register
- Decide travel, trekking, or both — it sets your capital.
- Decide firm or company; the Rules allow either, at different capital.
- Talk to your bank about the guarantee early — it is the long pole.
Registering and licensing
- Register at the OCR (company) or DoCSCP/DCSI (firm) with the right paid-up capital.
- Get the PAN; register for VAT if applicable.
- Lodge the bank guarantee in the Ministry’s name.
- Apply to the Department of Tourism with the NPR 15,000 fee.
- Take your local-level business licence.
Staying licensed
- Maintain the capital and the guarantee — losing either voids the licence.
- Diarise renewal at four years nine months.
- Keep separate food and liquor licences current if you also run accommodation.
Frequently Asked Questions
How much capital is required for a travel or trekking agency in Nepal?
Rule 5(1): a travel agency needs NPR 5,00,000 as a firm or NPR 10,00,000 as a company; a trekking agency needs NPR 3,00,000 or NPR 6,00,000. The Rules expressly allow a firm. Guides quoting NPR 25,00,000 are not reflecting the Rules.
What bank guarantee does a trekking agency need?
Rule 5(2): NPR 2,00,000 for a trekking agency and NPR 3,00,000 for a travel agency, held in the Ministry’s name for the whole licence tenure. Fail to maintain it — or the capital — and the licence is void under Rule 5(3b).
What does the licence cost and how long does it last?
NPR 15,000 (Rule 4), valid five years (Rule 7(1)). Renewal is NPR 10,000 before expiry, +25% for three months after, +50% for three months after that, then the licence is void.
Do I need a Department of Tourism licence for a homestay?
No. Homestays register at the local level under the Homestay Working Procedure via the Local Homestay Management Committee. The commonly cited limit is four rooms and eight beds — beyond that you are a lodge, with the heavier accommodation rules.
Does a hotel need a food licence too?
Yes — a kitchen is a food business under the Food Hygiene and Quality Act 2081 regardless of your accommodation licence, and alcohol needs a separate liquor licence. Expect three approvals: accommodation, food, liquor.
About this guide. Figures are quoted from the Travel and Trekking Agency Rules, 2062 (2005) (Rules 4, 5 and 7) and the Tourism Act, 2035 as published by the Nepal Law Commission, current to the amendments in that published text. Subordinate rules are amended from time to time and departmental practice can move ahead of the published text, so confirm with the Department of Tourism before transferring money. We do that check as part of any filing we handle.
Starting a Travel or Trekking Agency?
We handle the registration, the capital structuring, the bank guarantee paperwork and the Department of Tourism application — and confirm every figure against the current Rules before you commit.
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