Overview
Starting a distillery or brewery in Nepal requires more than just investment—it demands compliance with a structured legal and regulatory framework. The liquor production license is mandatory for anyone planning to manufacture alcoholic beverages in the country. This guide breaks down the licensing process, documentation, compliance measures, and government approvals required to legally operate an alcohol production facility in Nepal.
1. Introduction to Licensing Requirements
The production of alcohol and liquor is strictly monitored by the Government of Nepal to ensure product safety, maintain industry standards, and regulate distribution. The Department of Industry (DOI) acts as the primary authority for issuing production licenses, in coordination with other regulatory bodies.
Key prerequisites include:
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Adequate capital investment as per production scale.
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Compliance with land zoning and factory location guidelines.
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Technical setup adhering to quality and safety standards.
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Submission of all legal and environmental documentation.
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Passing facility inspections and quality control checks.
2. Legal Framework Governing Alcohol Production
The following laws govern the alcohol and liquor production industry in Nepal:
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Industrial Enterprises Act, 2076 (2020) – Outlines industrial registration and operational requirements.
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Liquor Act, 2031 (1974) – Regulates production, sale, and distribution of alcohol.
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Food Act, 2023 (1966) – Ensures product quality and consumer safety.
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Environment Protection Act, 2076 (2019) – Covers environmental compliance and impact assessments.
3. Documentation Required for License Application
Applicants must prepare and submit a complete set of documents to initiate the process:
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Company Registration Certificate
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PAN/VAT Registration
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Memorandum & Articles of Association
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Feasibility Study Report
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Environmental Impact Assessment (EIA) or Initial Environmental Examination (IEE)
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Land Ownership or Lease Agreement
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Building Permit & Architectural Plans
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Technical Specifications of Production Equipment
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Quality Control & Safety Procedure Documents
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Financial Statements & Proof of Capital Investment
4. Step-by-Step Process to Obtain a License
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Preparation Phase – Gather required documents and feasibility studies.
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Application Submission – File with the Department of Industry (DOI) along with supporting papers.
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Preliminary Review – DOI verifies completeness of documents.
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Site Inspection – Authorities inspect proposed production facilities.
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Technical & Quality Evaluation – Assessment of equipment and production setup.
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Environmental Clearance – Approval from the Ministry of Forests and Environment.
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Committee Review & Approval – Inter-departmental committee evaluates compliance.
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License Issuance – DOI grants the license upon final approval.
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Post-License Compliance – Adhere to ongoing inspections and quality control protocols.
5. Capital Investment Requirements
The minimum capital investment depends on the production scale:
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Small-Scale: NPR 10 million
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Medium-Scale: NPR 50 million
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Large-Scale: NPR 100 million
6. Technical Standards for Production Units
Production facilities must meet strict technical and safety standards, including:
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Stainless steel fermentation and distillation equipment.
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Proper ventilation and temperature control.
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Water treatment and waste management systems.
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In-house laboratory for quality testing.
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Hygienic packaging and bottling lines.
7. Environmental & Quality Compliance
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Conduct EIA or IEE as per factory size and location.
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Implement waste treatment and pollution control measures.
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Follow Nepal Standards (NS) and Good Manufacturing Practices (GMP).
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Maintain detailed production and quality records for inspections.
8. Timeline & Cost Estimates
Estimated processing time: 4–8 months depending on project scale.
Cost Breakdown:
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Application Fee: NPR 10,000 – 50,000
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License Fee (Annual): NPR 100,000 – 500,000
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Environmental Assessment: NPR 500,000 – 2,000,000
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Technical Evaluation & Consulting Fees: Variable
9. Renewal & Post-License Obligations
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Annual license renewal through DOI.
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Submission of updated financial records and tax clearances.
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Regular facility inspections for compliance verification.
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Adherence to excise duty, VAT, and safety standards.
10. FAQs
Q. Is a liquor production license mandatory in Nepal?
Yes. Alcohol production without a license is illegal and subject to penalties.
Q. Can foreign investors apply?
Yes, foreign investors may apply, but compliance with foreign investment laws and potential local partnerships may be required.
Q. How long does it take to get the license?
Typically 4–8 months, depending on application completeness and approvals.
Final Thoughts
Obtaining a liquor production license in Nepal requires careful planning, proper documentation, and strict compliance with legal and environmental standards. Consulting professionals experienced in regulatory procedures can significantly streamline the process and reduce approval delays.