Introduction
The star hotel registration process in Nepal is governed by the Tourism Act, 2035 (1978) and the Hotel, Lodge, Restaurant and Tourist Guide Regulation, 2038 (1979). These laws outline the licensing, classification, and compliance requirements for hotels seeking to operate under the star rating system. Star hotels are an integral part of Nepal’s tourism industry, contributing to foreign exchange earnings, employment generation, and the development of the hospitality sector. The registration process ensures that hotels meet minimum standards relating to infrastructure, services, hygiene, and safety before being classified under categories ranging from one-star to five-star. The Ministry of Culture, Tourism and Civil Aviation (MoCTCA) and the Department of Tourism are the primary authorities overseeing this process. Compliance with statutory obligations such as registration, tax clearances, labor law adherence, and environmental approvals are mandatory before operating a star hotel in Nepal. Medha Law and Partners Is a leading law firm in Nepal.
1. Legal Framework Governing Star Hotel Registration in Nepal
The registration and classification of star hotels in Nepal are primarily regulated under the Tourism Act, 2035 and the Hotel, Lodge, Restaurant and Tourist Guide Regulation, 2038. Section 12 of the Tourism Act makes it mandatory for hotels, lodges, and resorts to obtain a license from the Department of Tourism prior to commencing operations. The Regulations classify hotels into various categories, including star hotels, and prescribe detailed criteria such as the minimum number of rooms, facilities, sanitation, staff qualifications, and security provisions. The MoCTCA is responsible for policy formulation, while the Department of Tourism carries out licensing, inspection, and classification functions. Local level bodies also play a role in land use approval, construction permits, and property tax compliance. Together, these laws ensure a uniform system of hospitality regulation across the country.
2. Eligibility Criteria for Star Hotel Registration
Hotels applying for star classification must meet a set of eligibility criteria prescribed under the Hotel, Lodge, Restaurant and Tourist Guide Regulation, 2038. The primary requirements include ownership or leasehold rights over the hotel premises, compliance with land zoning and building codes, financial capacity to operate a hotel business, and fulfillment of basic service benchmarks. For higher categories such as four-star or five-star hotels, additional requirements such as swimming pools, conference halls, multi-cuisine restaurants, parking facilities, and trained managerial staff are mandatory. Applicants must demonstrate compliance with labor laws, including minimum wages, working conditions, and social security contributions. Furthermore, star hotels must obtain fire safety clearance, environmental clearance (if applicable), and sanitation certificates from the relevant government agencies before they can be considered for classification.
3. Government Authorities Involved in the Registration Process
The star hotel registration process in Nepal involves multiple government authorities. The Department of Tourism under the MoCTCA is the principal body responsible for receiving applications, conducting inspections, and issuing star classification certificates. The local municipal or rural municipal office provides building permits, land use approvals, and local tax clearances. The Department of Industry is involved where foreign investment or large-scale operations are concerned, particularly under the Foreign Investment and Technology Transfer Act, 2019. The Inland Revenue Department ensures tax registration, VAT, and PAN compliance. The Department of Labor and Occupational Safety supervises labor-related compliance. In certain cases, the Department of Environment and Ministry of Forests may provide environmental clearance. Each authority ensures the hotel complies with sector-specific legal obligations before the final license is issued.
4. Step-by-Step Star Hotel Registration Procedure in Nepal
The registration process of a star hotel follows a structured procedure:
Step 1: Obtain land ownership certificate or long-term lease agreement.
>Step 2: Secure building construction permit from local authority.
>Step 3: Register the hotel entity as a company under the Companies Act, 2006.
>Step 4: Obtain Permanent Account Number (PAN) and VAT registration from the Inland Revenue Department.
>Step 5: Apply to the Department of Tourism with the prescribed application form, fees, and supporting documents.
>Step 6: Undergo inspection by the hotel classification committee constituted under the Regulations.
>Step 7: Fulfill any deficiencies pointed out by inspectors.
>Step 8: Receive star classification certificate and operate in compliance with regulatory standards.
This process ensures transparency and accountability in the hospitality sector.
5. Documents Required for Star Hotel Registration
Applicants are required to submit the following documents to the Department of Tourism:
-
Certificate of company registration (Companies Act, 2006)
-
PAN and VAT registration certificates (Inland Revenue Department)
-
Land ownership certificate or lease agreement
-
Building construction permit and approved blueprints from local authority
-
Environmental clearance, if applicable (Environment Protection Act, 2019)
-
Fire safety clearance from local authority or Department of Fire Control
-
Sanitation and public health clearance from the Department of Health
-
Employee appointment letters and staff details
-
Tax clearance certificate
-
Application form and prescribed fees
These documents are mandatory to establish legal ownership, financial compliance, and adherence to infrastructure requirements.
6. Hotel Classification Standards in Nepal
The classification of star hotels is based on the criteria outlined in Schedule 8 of the Hotel, Lodge, Restaurant and Tourist Guide Regulation, 2038. The standards cover room size, furnishing, sanitation, restaurant facilities, reception services, safety, parking, and staff qualifications. For one-star hotels, basic facilities such as clean rooms, drinking water, and sanitation are mandatory. Three-star hotels must provide additional facilities such as a restaurant, telephone service, and adequate staffing. Four-star and five-star hotels must meet international standards, including conference facilities, swimming pools, fitness centers, multiple restaurants, 24-hour reception, and professional management. The Department of Tourism carries out periodic inspections to ensure continued compliance with classification standards.
7. Renewal and Compliance Obligations
Star hotel registration is not a one-time process. The license issued by the Department of Tourism must be renewed periodically, typically every five years, as per Section 15 of the Tourism Act, 2035. Renewal requires submission of updated tax clearance, labor compliance, and operational details. Hotels must maintain fire safety standards, sanitation certificates, and employee welfare obligations continuously. Non-compliance with regulations can result in fines, suspension, or cancellation of the license under Section 20 of the Tourism Act. Regular inspections are conducted by the Department of Tourism to verify compliance. Star hotels are also required to submit periodic reports on occupancy, revenue, and services to the Department.
8. Fees and Charges for Registration
The fee structure for star hotel registration is prescribed under the Regulations. The charges vary depending on the classification applied for, with higher fees for five-star hotels compared to one-star hotels. Fees include application processing fees, inspection charges, and classification certificate issuance fees. Additionally, hotels must pay renewal fees at the time of license extension. Other government levies include local property tax, service charges, tourism service fees, and VAT registration obligations. These fees are designed to ensure cost recovery for regulatory oversight and to standardize the classification process.
9. Challenges Faced by Star Hotels in Registration
Hotels often face challenges during the registration process. These include delays in obtaining building permits from local bodies, difficulties in securing environmental clearance, and meeting stringent infrastructure requirements for higher star categories. Foreign investment hotels must comply with additional procedures under the Foreign Investment and Technology Transfer Act, which can be time-consuming. Tax compliance and labor law obligations also require substantial administrative work. Despite these challenges, the regulatory framework ensures that hotels operate within internationally recognized standards, thereby safeguarding tourists and strengthening Nepal’s hospitality industry.
10. Conclusion
The star hotel registration process in Nepal is a comprehensive legal and administrative framework designed to standardize hospitality services. By adhering to the Tourism Act, 2035 and Hotel, Lodge, Restaurant and Tourist Guide Regulation, 2038, hotel operators ensure compliance with service quality, safety, and labor obligations. While the process requires multiple clearances and strict adherence to infrastructure standards, it ultimately strengthens Nepal’s tourism sector. Proper registration enhances credibility, builds trust among international tourists, and contributes to Nepal’s economic growth.
FAQs on Star Hotel Registration in Nepal
Q1: Which authority issues the star hotel registration license in Nepal?
The Department of Tourism under the Ministry of Culture, Tourism and Civil Aviation issues star hotel registration licenses. It inspects the premises, evaluates documents, and grants the classification certificate under the Tourism Act, 2035 and Hotel, Lodge, Restaurant and Tourist Guide Regulation, 2038.
Q2: What are the mandatory documents for registration?
Mandatory documents include company registration, PAN and VAT, land ownership or lease agreement, construction permit, sanitation and fire safety clearances, environmental clearance (if required), and tax clearance certificates. These documents ensure the hotel’s legal and operational compliance.
Q3: How long is a star hotel license valid?
The star hotel license is generally valid for five years. Hotels must apply for renewal with updated compliance documents, tax clearance, and operational records to maintain their classification and legal operation under the Tourism Act.
Q4: Can a foreign investor register a star hotel in Nepal?
Yes. Foreign investors can register star hotels under the Foreign Investment and Technology Transfer Act, 2019. They must obtain approval from the Department of Industry, register a company in Nepal, and comply with the star classification standards issued by the Department of Tourism.
Q5: What happens if a hotel fails to comply with star classification standards?
Non-compliance can result in fines, suspension, or cancellation of the license under Section 20 of the Tourism Act, 2035. The Department of Tourism conducts inspections and requires corrective measures. Persistent non-compliance leads to revocation of the classification.