Foreign Business Franchise in Nepal: Franchise Lawyer in Nepal

Franchise is a joint venture business. Business owner (Franchisor) grants permission to individual businessman or business group (Franchisee) to use their business brand/name/ trademark/process and run the business. It is mandatory to register trademark of foreign business brand in Nepal for franchising business in Nepal.

Allowing the franchisee to sell a product or service under the franchisor’s business name. Business model of franchisee shall be similar to franchisor and shares the some revenue to franchisor creating the commercial and legal relationship between them.

Foreign Business Franchise in Nepal is about:

• A franchise works on the business model where a franchisee uses the trademark of the business owner.
• The franchisee and franchisor have a commercial and legal relationship.
• In the franchise business model, a franchisor sells its brand name, for which a franchisee sells products and services.
• After signing the contract and other legal formalities, the franchisee can open a new branch.
• Franchise registration is acceptable both in accepted and restricted foreign investment in Nepal.

The Foreign Investment and Technology Transfer Act, 2019 and Patent Design and Trademark Act, 1965 are the governing laws for allowing franchise of local and international business in Nepal.

Authority for registering foreign and local brand franchise:

a. Department of Industry (DOI) – Registration of trademark / Franchise Agreement

a. Office of Company Registrar (OCR) – business registration

b. Inland Revenue Office -VAT/ PAN registration

c. Industry specific license form concerned government authorities

d. Governing Franchise agreement between Franchisor and Franchisee.

a. MOA and AOA of Franchisor
b. Certificate of registration
c. Trademark Certificate
d. License of both foreign and local business
e. Recent compliances and tax clearance documents
f. Industry registration certificate
g. Franchise Agreement between Franchisor and Franchisee
h. Board Minute declaring the business franchise of both local and foreign business
i. Company ‘s Profile
j. Shareholders passports copies
k. Power of Attorney

Approval from Nepal Rastriya Bank (NRB) should be taken before the repatriation of the revenue of the franchising business or approval is granted after paying the applicable 15% tax liabilities.

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