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Regulatory Standards for Establishing a Micro-Brewery Within a Restaurant in Nepal

The Government of Nepal, through the Department of Industry (DOI), has introduced comprehensive standards regulating the establishment and operation of micro-breweries integrated within restaurants. Under these standards, a micro-brewery is defined as a beer-producing unit operating inside a restaurant with a minimum seating capacity of 200, permitted to produce up to 3,000 hectoliters of beer annually, strictly for consumption within the restaurant premises.

Core Eligibility Standards

1. Minimum Restaurant Capacity

• The restaurant must have at least 200 seats.

• The attached micro-brewery may produce up to 3,000 hectoliters of beer per year, exclusively for internal consumption.

• The restaurant must have obtained an operating permit from the relevant regulatory authority.

2. Mandatory Floor Area Requirements

To qualify for approval, the restaurant-based micro-brewery must meet the following minimum space requirements:

• Restaurant area: 2,400 sq. ft.

• Brew-house area: 1,200 sq. ft.

• Utilities and support systems: 900 sq. ft.

3.  Environmental Compliance

The environmental compliance provisions require the following:

• Micro-breweries must obtain environmental approval (IEE Report) from the competent authority in accordance with prevailing environmental laws.

• All solid waste generated must be disposed of using appropriate, eco-friendly methods.

• The establishment must fully comply with the environmental standards prescribed by the Government of Nepal, as updated periodically.

• During the industry registration process, the applicant must submit a detailed Environmental Mitigation Plan, demonstrating effective mitigation measures for environmental impacts associated with brewery operations.

• The mitigation plan submitted at registration becomes binding and must be strictly implemented.

4.  Quality Control Standards

• Beer produced in the micro-brewery must not exceed 6% alcohol by volume.

• An in-house quality-control mechanism, supported by a functional laboratory, is mandatory

5. Structural, Technical, and Material Requirements

• The micro-brewery must be located in a permanent (RCC or brick) structure.

• Separate dedicated areas must be provided for:

  -raw material storage,

  -the brewing/production area, and

  -storage of the finished product.

• Only certified malt may be used.

  -If local Nepali malt is used, it must carry a quality-assurance certificate from the producer.

• Installation of a Clean-in-Place (CIP) system is compulsory.

• Tanks and pipelines must be made of stainless steel, any plastic pipes must be food-grade only.

• The micro-brewery must operate solely on electricity, use of other fuel types is prohibited.

6. Water and Product Standards

• Water used for production must meet the potable water standards set by the Department of Food Technology and Quality Control (DFTQC).

• Finished beer must comply with the Nepal Quality Standards (NQS).

• Use of sugar as an adjunct during brewing is strictly prohibited.

• All production must be carried out under the direct supervision of an alcohol technologist or food technologist to ensure quality assurance.

7. Taxation and Revenue Compliance

• Tax assessment and revenue collection will be conducted in accordance with the procedures and rates determined by the Government of Nepal and the Ministry of Finance.

8. Investment, Licensing, and Ownership Requirements

• The Board will grant permission for restaurant-based micro-breweries only in locations deemed suitable based on population, tourism presence, and commercial significance.

• A security deposit of NPR 1,000,000 (one million) must be submitted before establishment.

• The applicant must retain at least 50% ownership in the micro-brewery for the first two years of commercial operation.

• Commercial production must commence within two years from the date of license issuance.

• Bottling or selling beer outside the restaurant premises is strictly prohibited.

• All legal provisions applicable to standard brewery industries will also apply to micro-breweries.

• Foreign Direct Investment (FDI) is not permitted in micro-brewery establishments.

Conclusion

Nepal’s micro-brewery regulations are designed to promote controlled, tourism-driven beer production while ensuring health, environmental, and consumer safety standards. Restaurant owners and investors must navigate a detailed compliance framework to obtain approvals and operate lawfully.

                                                                                                  Source: Department of Industry (DOI) Nepal

Note: Sherpa Law Associates offers complete legal advisory, compliance support, licensing assistance, and documentation services for setting up micro-breweries, restaurants, and other hospitality ventures in Nepal. For professional consultation contact us at Email: sherpalaw.nepal@gmail.com, phone no: +977 9846000030.