Direct selling in Nepal is no longer a legal grey area it’s a regulated, compliance-driven business model with real opportunities and real risks. Over the past few years, Nepal has seen a sharp rise in network marketing, home-based selling, and multi-level distribution models. Some succeeded. Many failed. A few were shut down overnight.
The difference? Licensing and legal structure.
If you’re planning to start or already operating a direct selling business, this guide will walk you through everything you need to know about obtaining a direct selling license in Nepal—clearly, practically, and without fluff.
Direct selling refers to a business model where goods or services are sold directly to consumers, usually outside fixed retail locations. Sales often happen through individual distributors, agents, or representatives, sometimes using multi-level marketing (MLM) structures.
In Nepal, direct selling is legal only when conducted under a government-issued license and within strict regulatory boundaries. Pyramid schemes, money circulation businesses, and commission-only recruitment models are strictly prohibited.
Yes—100% mandatory.
Any individual or company engaging in direct selling activities must obtain approval from the Government of Nepal. Operating without a license can lead to:
Immediate business shutdown
Heavy fines
Blacklisting of promoters and directors
Criminal liability in serious cases
Nepal’s regulatory stance is clear: No license, no operation.
Direct selling businesses in Nepal are governed by a dedicated legal regime designed to protect consumers and prevent financial fraud.
Direct Selling Act
Direct Selling Regulation
Companies Act
Consumer Protection Act
These laws collectively define:
What constitutes legal direct selling
Prohibited pyramid or chain-based models
Licensing requirements
Compliance and reporting obligations
The licensing and monitoring authority is:
Department of Commerce, Supplies and Consumer Protection
under the
Ministry of Industry, Commerce and Supplies
All applications, renewals, inspections, and enforcement actions are handled through this department.
To qualify, the applicant must meet strict eligibility criteria:
Registered company in Nepal (Private or Public Limited)
Clear business model focused on product-based selling
No income solely from recruitment or joining fees
Transparent commission structure linked to actual sales
Adequate capital and operational infrastructure
Clean background of promoters and directors
Foreign investment may be allowed only with specific approvals, depending on the nature of products and shareholding.
This is where many businesses fail.
Nepal strictly prohibits:
Pyramid schemes
Chain marketing
Money circulation businesses
Compensation based mainly on recruitment
Unrealistic income promises
If your revenue model rewards recruitment more than product sales, your license application will be rejected—or worse, revoked later.
A complete and accurate document set is critical. Missing or weak documentation is the #1 cause of delays.
Company registration certificate
Memorandum and Articles of Association
PAN and tax clearance certificates
Detailed business plan
Product details, pricing, and sourcing information
Compensation and commission structure
Distributor agreement templates
Consumer grievance redress mechanism
Bank guarantee or financial security (as prescribed)
Board resolution authorizing the application
All documents must clearly show product-centric revenue, not recruitment-driven income.
Here’s how the process typically unfolds:
Register a company in Nepal with objectives aligned to direct selling.
Prepare a legally compliant sales and compensation model.
File the application with the Department along with required documents.
Authorities review:
Business viability
Consumer protection measures
Risk of pyramid elements
You may be asked to revise documents or structures.
Once approved, the license is granted with specific conditions.
There is no fixed statutory deadline, but in practice:
Well-prepared applications: 2–4 months
Applications needing revisions: 4–6 months or longer
Poor documentation can easily double the timeline.
Government fees may change, but applicants should budget for:
Application and processing fees
Bank guarantee or security deposit
Professional fees (legal, compliance, drafting)
Always confirm current fee structures before filing.
Getting the license is only the beginning.
Periodic reporting to the Department
Maintaining transparent distributor records
Honoring buy-back and refund policies
Avoiding misleading income claims
Compliance with consumer protection standards
License renewal within prescribed timelines
Non-compliance can lead to suspension or cancellation.
Foreign involvement is restricted but not impossible.
Foreign investors must:
Comply with Nepal’s foreign investment laws
Obtain sector-specific approvals
Ensure local compliance with direct selling regulations
In many cases, a Nepali subsidiary is required.
Let me be blunt—most rejections are avoidable.
Common pitfalls include:
Copy-paste MLM models from other countries
Overemphasis on recruitment incentives
Vague or unrealistic income projections
Weak consumer grievance mechanisms
Non-compliant distributor agreements
A legally vetted structure makes all the difference.
Direct selling law in Nepal is technical, evolving, and strictly enforced. Even a small drafting error in your compensation plan can invalidate the entire application.
Professional legal guidance helps you:
Structure a compliant business model
Draft regulator-approved documents
Reduce approval timelines
Protect promoters from future liability
Direct selling in Nepal is not a shortcut business—it’s a regulated commercial activity with zero tolerance for shortcuts. When done legally, it offers scalable growth, nationwide reach, and long-term sustainability. When done carelessly, it can end overnight.
If you’re serious about launching or regularizing a direct selling business, start with compliance, not marketing. Get the license. Structure it right. Protect your brand, your distributors, and your future.
The next step? Speak with a qualified legal professional, review your business model, and move forward with confidence.
February 04, 2026 - BY Admin