Aviation Business Licensing Process in Nepal

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1. Introduction

The aviation industry in Nepal is strictly regulated due to safety, security, and international compliance requirements. Whether you are planning to establish an airline company, helicopter charter service, cargo operator, ground handling company, or aviation training institute, obtaining an aviation business license in Nepal is mandatory. The licensing process is governed primarily by the Civil Aviation Authority of Nepal (CAAN) under specific aviation laws and regulations.

This comprehensive guide explains the legal framework, eligibility, documentation, cost, timeline, and step-by-step process for aviation business licensing in Nepal.

2. Legal Framework Governing Aviation Business in Nepal

The aviation sector in Nepal is regulated by the following laws and regulations:

Primary Laws:

• Civil Aviation Authority of Nepal Act, 2053 (1996)

• Civil Aviation Act, 2015 (1959)

• Tourism Act, 2035

• Company Act, 2063

• Foreign Investment and Technology Transfer Act (FITTA), 2075

• Public Private Partnership and Investment Act (if applicable)

Regulations & Directives:

• Civil Aviation Regulations (CARs)

• Air Operator Certificate (AOC) Requirements

• Flight Safety Standards Regulations

• Airport Service Charge Regulations

• Aviation Security Regulations

• ICAO Compliance Standards (Nepal is a signatory state)

These laws collectively regulate licensing, safety compliance, airworthiness, training, airport operation, and air transport services.

3. Key Legal Provisions

✔ Mandatory License

No person or company can operate air transport services without obtaining:

• Air Operator Certificate (AOC)

• Operating License from CAAN

✔ Safety & Airworthiness Compliance

Aircraft must comply with:

• ICAO Standards

• Nepal Civil Aviation Requirements (NCAR)

✔ Ownership Requirement

• Airlines operating domestic flights must be registered in Nepal.

• Foreign investment is permitted under FITTA with sectoral caps.

✔ Financial Capability

Applicants must demonstrate:

• Minimum paid-up capital

• Financial sustainability

• Insurance coverage

4. Administrative Authorities Involved

The following authorities are involved in aviation business licensing:

• Civil Aviation Authority of Nepal (CAAN) – Primary regulatory body

• Ministry of Culture, Tourism and Civil Aviation (MoCTCA)

• Office of Company Registrar (OCR)

• Department of Industry (for foreign investment approval)

• Inland Revenue Department (IRD)

• Nepal Rastra Bank (for foreign investment approval)

CAAN is the main licensing and regulatory authority.

5. 5W1H: Aviation Business Licensing in Nepal

What is Aviation Business Licensing?

A legal authorization issued by CAAN to operate aviation-related services in Nepal.

Why is it Required?

To ensure flight safety, regulatory compliance, financial reliability, and ICAO compliance.

Who Needs It?

• Airlines (domestic & international)

• Helicopter operators

• Cargo operators

• Ground handling service providers

• Aviation training institutes

Where to Apply?

At Civil Aviation Authority of Nepal (CAAN), Kathmandu.

When is it Required?

Before commencing any commercial aviation activity.

How to Obtain It?

Through company registration, regulatory approval, technical evaluation, and issuance of AOC.

6. Eligibility Criteria

Eligibility depends on the nature of aviation business, but generally includes:

• Company registered in Nepal

• Minimum paid-up capital (as prescribed by CAAN)

• Qualified technical personnel (licensed pilots, engineers)

• Approved aircraft (airworthy and compliant)

• Insurance coverage

• Security clearance

• Business plan and operational manual

Foreign investors must obtain:

• FDI approval

• Sector clearance

7. Documents Required

Typical documents include:

• Company Registration Certificate

• PAN/VAT Registration

• Memorandum & Articles of Association

• Shareholder details

• Financial statements / bank guarantee

• Aircraft ownership/lease agreement

• Insurance policy

• Safety management manual

• Operations manual

• Security clearance report

• Technical staff licenses

• Airport agreement (if applicable)

Additional documents may be requested by CAAN depending on the type of aviation service.

8. Step-by-Step Process for Aviation Business Licensing in Nepal

Step 1: Company Registration

Register company at Office of Company Registrar.

Step 2: Obtain FDI Approval (if applicable)

Apply to Department of Industry.

Step 3: Submit Application to CAAN

Submit formal application with required documents.

Step 4: Technical Evaluation

CAAN evaluates:

• Aircraft airworthiness

• Safety manual

• Personnel qualification

• Operational feasibility

Step 5: Inspection & Demonstration

CAAN conducts:

• Physical inspection

• Test flights

• Compliance verification

Step 6: Issuance of Air Operator Certificate (AOC)

Upon compliance, CAAN grants license.

Step 7: Commencement of Operation

After final approval and publication.

9. Cost of Aviation Business License in Nepal

Cost varies depending on type of operation:

• Application Fee: NPR 50,000 – 500,000

• AOC Certification Fees

• Aircraft registration fee

• Security clearance charges

• Annual renewal fees

• Insurance & compliance costs

For airlines, total setup cost may range from NPR 50 Crores to 2 Arba+, depending on fleet size.

10. Timeline

• Company Registration: 7–15 days

• FDI Approval: 2–6 weeks

• CAAN Technical Evaluation: 3–6 months

• Full Licensing Process: 6–12 months

Timeline depends on preparedness and compliance level.

11. Other Compliances

After obtaining license, the business must comply with:

• Annual renewal of AOC

• Safety audits

• Aircraft maintenance compliance

• Tax compliance

• Environmental regulations

• Aviation security clearance

• ICAO audits

Failure to comply may lead to suspension or cancellation.

12. FAQs 

1. How to start an airline company in Nepal?

Register a company, obtain CAAN approval, secure aircraft, meet capital requirements, and receive an Air Operator Certificate (AOC).

2. What is the minimum capital required for aviation business in Nepal?

The capital requirement depends on the type of operation (airline, helicopter, cargo). CAAN prescribes minimum thresholds based on operational scope.

3. How long does it take to get aviation license in Nepal?

Typically 6–12 months depending on compliance and documentation.

4. Can foreigners invest in aviation business in Nepal?

Yes, foreign investment is allowed under FITTA 2075, subject to government approval and sectoral rules.

5. Which authority regulates aviation in Nepal?

The Civil Aviation Authority of Nepal (CAAN).

6. What is an Air Operator Certificate (AOC)?

An official approval granted by CAAN authorizing a company to operate commercial air transport services.

7. Is CAAN license mandatory for helicopter charter service?

Yes. All commercial aviation services require CAAN licensing.

13. Disclaimer

This article is for informational purposes only and does not constitute legal advice. Aviation licensing requirements may change based on amendments to laws, CAAN directives, or government policy. For tailored legal consultation regarding aviation business licensing in Nepal, consult a qualified aviation lawyer or contact the Civil Aviation Authority of Nepal.