What Types of Work Visas or Permits for Nepal are there?
All foreign nationals travelling to Nepal require a visa, with a few exceptions such as Indian citizens or diplomatic and official visitors. Visa applications can be started by foreigners through the government’s online portal the Entry Visa (a.k.a. Tourist Visa) can be applied for from outside Nepal. On arrival, paperwork can be initiated depending on the purpose of travel, to change the Tourist Visa to a Non-tourist Visa. However, the Business Visa for investors can be done via diplomatic missions abroad by foreigners having a license for investment in Nepalese businesses or industrial enterprises.
Nepal does not restrict the number of foreigners employed but they do require employers to advertise vacancies to the local labour market. Foreigners should also be highly qualified or technical specialists and train locals to eventually replace them.
The authorities involved with issuing visas and permits are:
Diplomatic Missions (MOFA) abroad such as embassies and consulates as e-Visas are not issued.
Department of Immigration at airports upon entry – Visa on Arrival. Extensions for visas obtained inside Nepal. They also issue Work Visas on the basis of the Labour/Work Permit for employees.
Department of Labour and Occupational Safety (DOL), which comes under the Ministry of Labour, Employment and Social Security, issues the Labour/Work Permit regarding employment.
Special Economic Zone Authority can issue the work permit for employees working in these areas. For five years for technically qualified staff and seven years for highly qualified technicians and for longer if considered beneficial.
Department of Industry (DOI) termed in Nepal as a ‘line agency’, or the ministry concerned with approving the Business Visa for Investment before the visa is issued by the Department of Immigration.
Department of Education (DOE) is the ‘line agency’ when it comes to approving the Study Visa for students or academics teaching in Nepal.
Ministry of Home Affairs (MOHA) which issues the Work Agreement as part of work authorisation and gives security clearance i.e., Letter of no objection.
Various Ministries acting as line agencies for recommendation letters regarding the Work Visa:
The majority travelling to Nepal do so through the Visa on Arrival, which is a Tourist Visa for such as site seeing, trekking, visiting friends and family. However, although visitors no longer have to complete the Online International Travel Arrival Form, COVID paperwork is still required as of 2023 and should therefore be checked before travelling. Apart from a passport valid for a minimum of six months, there must be proof of hotel accommodation or similar, funds to cover duration of stay and comprehensive travel insurance.
Tourist / Entry Visas
Visa on Arrival (TIA) is a multi-entry Tourist Visa, available to most foreigners apart from those from Nigeria, Palestine, Ghana, Zimbabwe, Afghanistan, Swaziland, Cameroon, Somalia, Liberia, Ethiopia, Iraq, Syria, plus those with refugee status. A form can be completed online before travelling or upon arrival at one of the airport kiosks. On the website, a barcode is issued which should be printed and brought to Nepal. This gives 15 days for applicants to enter. Fees depend on how long the visa is for e.g., 15/30/90 days and although payment methods should be available, travellers are advised to carry cash in US dollars. Present the form (barcode), receipt, and passport at immigration to have the visa processed. Visa extensions are available to give a maximum of 150 days in the country, in the visa year, from immigration offices in Kathmandu or Pokhara
Gratis Visa (free of charge) is issued to children under 10 years old (except US citizens); to SAARC nationals of India, Maldives, Bangladesh, Pakistan, Bhutan, and Sri Lanka for 30 days; to NRN card holders (non-residential Nepalese) issued at embassies or consulates abroad; Chinese citizens for 150 days
Tourist Visa from embassies and consulates in country of residence available to all foreigners. This is a multi-entry visa which is valid for six months from when issued and gives stays of 15/30/90 days from date of entry. Extensions can be applied for in Nepal at the Department of Immigration
Transit Visa. A one-day visa received upon arrival by completing the online application form, paying the US$5 fee, and proceeding to the Transit counter to collect from the immigration officer
Plus, Diplomatic and Official visas
Working Visa. This allows foreigners to work and stay in the country. This is the only work visa issued by the government for employees. It is issued through the Non-Tourist section of the Department of Immigration with the approval of the relevant ministry, as well as with other documentation such as a labour permit and work agreement. The Work Visa should be for as long as the employment contract, payment is also required on an ongoing monthly basis as is a fee for the multi-entry facility. These may be paid by either the employee or employer. The employer also needs to supply documents, such as tax clearance. The employer is responsible to make sure his employees have the correct and required work authorisations as the government is very strict, with fines applied and transgressors can be imprisoned
Relationship Visa for relatives of citizens of Nepal
Marriage Visa for foreign spouse of Nepalese citizen
Press Visa issued to members of the press for limited periods of four months on producing various documents and the monthly fee. Can be issued as a Single re-entry or Multi Re-entry visa
Business Visa for investors is available through the ‘line agency’, the Department of Industry which needs to recommend the applicant to the Department of Immigration. Until 2023, this visa was for one month to 12 months up to five years. However, the recommendation from the Department of Immigration is for three months initially, until there is proof of invested funds. Fees vary according to the investment of between NRS 10 million (US$76,150) to NRS 100 million (US$761,450). This is a multiple re-entry visa and can be applied for through diplomatic missions abroad when there is a licence for investment in Nepalese businesses or industrial enterprises
Study Visa issued to international students or researchers, and to professors and teachers through the Department of Immigration with approval from the Department of Education for a one-year period as recommended, or the period of study for the student. Fees depend on the study category such as academic or research etc. This visa is available with a Single or Multiple Re-entry facility
Applying for the Work Visa or Work Permit for Nepal
The process starts with applying for the Tourist Visa, which can be from diplomatic missions in the country of residence or if eligible, by applying for the Visa on Arrival. This is the only Entry Visa available to visitors from outside Nepal. Nearly all foreigners require a visa to enter, apart from Indian citizens and some diplomats and officials.
There are a number of authorities involved in the Work Visa process including recommendations from ‘line agencies’ that are the departments related to particular areas of employment.
Steps to the Work Visa
Applicants require a job from a Nepalese registered company
Enter the country on the Tourist Visa
The employee collates all documentation to apply for the Work Visa through the Department of Immigration
The work agreement is required from the Ministry of Home Affairs
The employer advertises the vacancy with the National Press including all details
The work or labour permit is required from the Department of Labour and Occupational Safety which takes around 25 to 35 days to complete OR for those working in the Special Economic Zones – through the SEZ Authority
A Letter of Recommendation to be collected from whichever department oversees employee’s occupation / employment
Submit fee with the documents
The Ministry of Home Affairs may be asked to review any criminal activity and issue a letter of no objection
While the paperwork is being processed and the application is made to the Department of Immigration for the Working Visa, the Tourist visa is changed to a Non-tourist visa
After receiving application, the Department of Immigration process takes around five days to issue the Work Visa
Figures are given in Nepal rupees (NPR) with equivalents in euros and US dollars.
Personal Income Tax (PIT): Income up to NPR 500,000 (€3,470, US$3,800) taxed at 1%, with four further rates up to a maximum of 36% on excess over NPR 20,000,000 (€138,885, US$152,160). Other rates apply for married couples.
Corporate Income Tax (CIT): Generally 25%, with 30% applying to sector such as banks; insurance; tobacco and alcohol products; telecom and internet services; petroleum activities covered by the Nepal Petroleum Act.
Withholding Tax (WHT): 15% applying to income for non-residents from rent, interest, commission and bonuses; royalties and patents; technical fees and management services. 5% applies to dividends.
Capital Gains Tax (CGT): 5% where non-professional property and land has been owned for five years or more; 7% if the property or land has been owned for less than seven years.
Value Added Tax (VAT): Generally applied at 13% on goods and services, apart from exempted categories.
Customs and Excise Duties: Customs duties at various rates applied to goods transported into Nepal; excise levies applied to goods and merchandise imported into or manufactured in Nepal.
Personal Income Tax in Nepal
Tax rates for unmarried individuals:
Income | Percentage Tax on Excess
Up to NPR 500,000 (€3,470, US$3,800) | 1%
Excess up to NPR 700,000 (€4,860, US$5,325) | 10%
Excess up to NPR 10,000,000 (€69,454, US$76,080) | 20%
Excess up to NPR 20,000,000 (€138,885, US$152,160) | 30%
More than NPR 20,000,000 | 36%
Note: Non-residents generally pay tax at 25%.
Note: Up to NPR 40,000 (€278, US$305) deducted for social security deductions.
Tax rates for married couples filing joint returns:
Income | Percentage Tax on Excess
Up to NPR 600,000 (€4,167, US$4,564) | 1%
Excess up to NPR 800,000 (€5,560, US$6,090) | 10%
Excess up to NPR 11,000,000 (€76,400, US$83,690) | 20%
Excess up to NPR 20,000,000 (€138,885, US$152,160) | 30%
More than NPR 20,000,000 | 36%
Individual Tax Rules in Nepal
The tax year generally runs from July 16 till July 15 of the following year, although may be adjusted regionally according to the local calendar
Joint returns are allowed and have partly differing tax bands
Employers are legally required to withhold due taxes from the payroll of employees
Individuals’ returns should be filed within three months of the end of the fiscal year, by mid-October
Tax residents are those normally residing in Nepal or those who stay in Nepal for more than 183 days in a tax year
Tax residents are taxed on their worldwide income
Non-residents are taxed on income sourced in Nepal, generally at a flat rate of 25%
Employers’ and Employees’ Social Security and Statutory Contributions in Nepal
Contributions are deducted from payroll by the employer for remittance to the Social Security Fund (SSF).
Employers’ Social Security Contributions | Percentages (%)
Provident Fund | 10%
Gratuity Fund | 8.33%
Medical Insurance | 1.67%
Employees’ Social Security Contributions | Percentages (%)
Provident Fund | 10%
Social Security Tax | 1%
International companies expanding operations into Nepal’s challenging economic environment need to establish a subsidiary in the country to be able to efficiently hire staff and run the payroll for their new entity.
Nepal is an under-developed country that is determined to grow into an influential role in South Asia, where it is landlocked between the region’s major players, India and China, but offers a steppingstone into these economies. Nepal needs foreign investment to relieve its dependence on imported commodities, and the government has highlighted key areas towards creating a more sustainable economy.
Upgrading infrastructure and transport logistics is a priority, with 80% of the population living in rural areas and 60% of the population working in agriculture. Improving manufacturing and agri-business technology is essential in order to develop an exports list that goes beyond traditional operations of processing jute, sugarcane and timber. The Himalayas in the north feed fast-flowing river systems which offer huge potential for further developing hydropower and energy supply.
Special Economic Zones are a comparatively minor but growing feature of Nepal’s economic landscape, where the government offers tax incentives for foreign companies, which are generally allowed 100% foreign ownership, except in sectors on the ‘negative list’.
Companies attracted by this potential and the challenges posed by an emerging economy usually take the option of opening a private limited company as a subsidiary. The subsidiary operates under the Companies Act (2006) and is regulated by the Department of Industry (DOI) and complies with the Foreign Investment and Technology Transfer Act, as revised in 2019.
Incoming companies can make a better choice. The fastest, simplest and most practical route into the Nepalese economy avoids the complexities of opening a subsidiary. Bradford Jacobs has the expertise to remove any potential obstacles. Our Professional Employer Organisation (PEO) teams and Employer of Record (EOR) consultants will be alongside you from day one – from recruiting staff to managing every legal aspect of compliance. Instead of waiting weeks or months, you and your staff can be up-and-running in days … and your employees always remain under your daily operational control.
How to set up a Nepal Subsidiary
Incorporation and registration procedures to set up a limited liability company in Nepal generally include the following:
File the company name and type of business with the Office of the Company Registrar (OCR)
Register with the Nepal Bureau of Standards and Metrology (NBSM), which monitors the social security contributions and income tax deductions that are withheld at source by the employer
Register the company with the Inland Revenue Department (IRD) and the Social Security Fund (SSF) for deducting and remitting due taxes and contributions from payroll
Provide the OCR with the proposed Memorandum and Articles of Association
Lodge the parent company’s incorporation documents with the OCR and the resolution from its board to form the subsidiary
Provide the passports of foreign promoters and IDs of Nepalese citizens, and certified power of attorney documents for individuals representing company with the authorities
Open an appropriate bank account
Register with the DOI and prove minimum capital investment of NPR 20,000,000 (€138,740, US$152,900) as of financial year 2022-23, when the requirement was reduced from NPR 50 million
What are the Benefits of setting up a Subsidiary in Nepal?
The subsidiary operates in Nepal as a legal entity formed under the Companies Act, and is independent from the parent company and its shareholders. The parent company generally has no responsibility for the subsidiary’s debts or liabilities, including legal issues. The subsidiary’s shareholders, partners and members are typically liable only to the value of their contribution to the equity. The subsidiary can operate independently, pursue different business opportunities and draw up contracts.
Opening a subsidiary in Nepal provides the parent company with the opportunity to explore new markets outside its regular economic orbit. The subsidiary opens the potential to enter into agreements with other registered companies in Nepal, throughout South Asia and further afield. Also, the permanency of a subsidiary has greater credibility with clients and suppliers compared with branches, which cannot undertake processing or manufacturing operations in Nepal. Parent companies are also responsible for the branch’s operations and liabilities.
But … setting up a subsidiary in Nepal is still a long journey compared with taking the most efficient and financially prudent route to starting operations.
Here is the best solution … let Bradford Jacobs locate top-rated talent for your company in Nepal through our in-country Professional Employer Organisation (PEO) specialists. Employees can be working at their desks and screens in days … not weeks, or even longer. We remove all concerns regarding employment laws and compliance. Our Employer of Record (EOR) teams handle the hassle … while you have day-to-day operational control over your workforce.
Subsidiary Regulations in Nepal
Procedures applying to a limited liability company typically include:
Registration and Documentation:
Register the unique company name and the proposed business operation with the Office of the Company Registrar (OCR)
Register with the Social Security Fund (SSF)
Supply proposed Memorandum and Articles of Association with the OCR and provide certified copies of incorporation documents of the parent company and their board resolution to open the subsidiary
Register with the DOI and prove minimum capital investment in the company accounts of NPR 20,000,000 (€138,740, US$152,900), as of financial year 2022-23 when the requirement was changed from NPR 50 million
Accounts and Taxation:
Register with the Inland Revenue Department (IRD) to obtain Permanent Account Number (PAN) to deal with income, corporate and sales taxes
Register with the Nepal Bureau of Standards and Metrology (NBSM), which records income tax deductions to be withheld at source by the employer, as well as social security contributions
Open an appropriate bank account
The company must maintain accounts in accordance with Nepal Financial Reporting Standards, as applied by the Nepal Accounting Standards Board
Tax returns and audited accounts must be filed by mid-October, within three months of the end of the financial year
Register a minimum of one shareholder and a maximum of 50
Members can only transfer shares to fellow shareholders
Shareholders have one vote for each share held
Appointment of directors requires a 50% vote of shareholders
International companies planning expansion into the Federal Republic of Nepal will be entering a landlocked South Asian nation squeezed between India and China, with the iconic Mount Everest in the Himalayan mountain range in the north of its spectacular landscape.
Nepal is a land of legends, both Hindu and Buddhist. They are reflected in the festivals that play a large part in cultural life and rekindle the traditional culture of the indigenous Newar who lived in the Nepal Valley, now known as the Kathmandu Valley. Archaeological evidence of Buddhist influences goes back 2,500 years BCE, after which there are large but intriguing gaps in Nepal’s history up to the modern era. Nepal’s diverse religious and ethnic groups reflect migrations from India, Tibet and other South Asian nations that have also produced a variety of dialects alongside the official language of Nepali.
Nepal holds a strategic geopolitical position as a buffer between China’s southern border and India. The US, UK, Germany, Canada and Switzerland are among nations that provide economic aid to Nepal to help maintain this position, although Nepal is a late mover into the global economy after centuries of self-imposed isolation.
The 21st century has seen Nepal increasingly open to foreign investment, which is especially welcome to improve logistics and infrastructure throughout its mountainous terrain and to upgrade technology and production processes in the under-performing manufacturing sector. The undeveloped mining sector offers investment opportunities for extracting Nepal’s varied mineral resources. The embryonic digital, e-commerce and start-up sector is another area to tempt Foreign Direct Investment (FDI).
Starting your business in Nepal
Foreign companies intending to start business operations need to open a subsidiary to legally hire employees and operate their payroll. The private limited liability company is the most popular option, which operates in accordance with the Companies Act of 2006 and is regulated by Nepal’s Department of Industry (DOI). Foreign companies wanting to invest in a permissible industry need FDI approval from the government. Foreign investment regulations are further dealt with in the Foreign Investment and Technology Transfer Act (FITTA, 2019).
Procedures for a foreign entity registering a private limited liability as a subsidiary generally include the following:
Lodge the company name and type of business with the Office of the Company Registrar (OCR)
Register with the Inland Revenue Department (IRD) to obtain Permanent Account Number (PAN) to deal with income, corporate and sales taxes
Register with the Social Security Fund (SSF)
Register with the Nepal Bureau of Standards and Metrology (NBSM), which requires social security contributions and income tax deductions to be withheld at source by the employer
Supply proposed Memorandum and Articles of Association
Provide certified copies of incorporation documents of the parent company and their board resolution to open the subsidiary
Provide passports of foreign promoters and citizenship documents of Nepalese citizens
Provide certified Power of Attorney documents for individuals representing the subsidiary with the authorities
Open an appropriate bank account
Minimum paid-up share capital of one US dollar
Register with the DOI and prove minimum capital investment of NPR 20,000,000 (€138,740, US$152,900), as of financial year 2022-23 before when the previous minimum was NPR 50 million
Additionally, the company may need to obtain various licences depending on area of operations, including from the Department of Industry, the Department of Electricity Development, the NRB, Department of Agriculture and the Department of Roads.
This incorporation process underlines the importance of taking the best possible advice and exploring the alternatives to opening a subsidiary. By making the right choice now, you can steer a course around these obstacles by working alongside Bradford Jacobs. Our Professional Employer Organisation (PEO) specialists and Employer of Record (EOR) experts will recruit the staff and undertake every step of compliance to have them up-and-running in the shortest possible time. Instead of waiting weeks to complete the process for opening a subsidiary, you can be operational in days.
Nepal is a potentially emerging economy in South Asia, which needs investment in infrastructure, technology and production processes to upgrade its manufacturing sector and reduce dependence on imports. Landlocked between the formidable economies of India and China, Nepal aims to redress these shortfalls by attracting Foreign Direct Investment (FDI).
Investment options include joint ventures and wholly foreign-owned subsidiaries. Special Economic Zones offer the incentive of tax concessions, with the government keen to develop the potential of hydropower, energy supply, mineral resources and construction. International companies are also attracted by the country’s encouraging growth of start-ups in hospitality and tourism, education, medical services and agricultural projects.
Expanding business in Nepal offers considerable potential and many options. However, for companies aiming to establish their own entity in the country, expansion comes with issues of incorporation, recruitment and contracts, company and employment legislation and much more. By working with Bradford Jacobs as your Professional Employer Organisation (PEO) and Employer of Record (EOR), we deal with everything on that list. We can ensure that the only item on your list is … ‘global expansion’.
Advantages and Challenges when entering the Nepal Market
Easy access to the neighbouring vibrant economies of India and China
Comparatively low import tariffs, plus no customs duties for companies operating in the Special Economic Zones
Low labour costs give room for increased profitability
Small population and limited domestic consumer market, restricted to the few urban areas
Infrastructure and logistics generally unable to deal with mountainous and inhospitable landscape
Unreliable water and power supplies despite huge potential for hydropower
Lack of skilled workers for incoming companies
Restrictions on foreign banks and repatriating profits
Employers are advised to provide employees with a written contract, although this is not required by law. However, at least an appointment letter or employment agreement must be provided. Employers who do not comply are liable for fines between NPR 10,000 (€70, US$76) up to NPR 500,000 (€3,476, US$3,800).
Section 10 of the Labour Act categorises five types of employment: Regular, work-based; time-based; casual; part-time. Contracts are expected to include the following: Employee’s salary and any benefits; responsibilities of the role and job location; working hours and breaks; any probation period; procedures for termination resolution and notice periods. Section 17 stipulates that the employee should sign the written contract, appointment letter or employment agreement, the latter two examples being the minimum requirement.
Different types of Employment Contracts in Nepal
Regular employment contracts: Provides for regular ongoing work, without stipulating an end date.
Fixed-term or work-based employment contracts: Contracts assigned to a specific task or timescale with an end date, although they can be extended if the project requires.
Casual employment contracts: Apply where work does not exceed seven days in a month and can be terminated by either party.
Part-time employment contracts: Where work does not exceed 35 hours a week.
Probation periods: Allowed to a maximum of six months, during which the employer can terminate the agreement. If not terminated, the contract becomes regular.
Collective Bargaining Agreements (CBAs): These are generally restricted to company or enterprise level, under the guidance of the relevant trade union and mediated by the relevant regional labour office.
Laws that regulate the labour relationship in Nepal
Two leading pieces of legislation rationalised various labour laws, they are:
The Labour Act (2017)
Labour Rules (2015)
General requirements for Contracts
There is no statutory requirement to provide a written contract, but they are strongly advised and the employer must at least issue an appointment letter or employment agreement. Failure to comply risks fines between NPR 10,000 (€70, US$76) up to NPR 500,000 (€3,476, US$3,800). Employees must sign whichever document is provided.
Contracts should include the following: Employee’s salary and any benefits; responsibilities of the role and job location; working hours and breaks; any probation period; procedures for termination resolution and notice periods.
Workers’ entitlements and guarantees in Nepal are governed by the Labour Act (2017) and Labour Rules (2015), which apply to employees working in all types of companies and enterprises in the formal economy. The Act and Rules regulate the labour market, operating under the auspices of the Ministry of Labour, Employment and Social Security.
What are the Compensation Laws?
National Minimum Wage (NMW): The national monthly minimum wage of NPR 15,000 (€104, US$114) has been in place since January 2022, as set by the government.
Working Hours and Breaks: Section 28 of the Act restricts working hours to no more than eight a day to a maximum of 48 in a week. Employees are entitled to a 30-minute break after working for five hours.
Overtime: Section 31 states that overtime is paid at one-and-a-half times the normal hourly rate, and cannot exceed four hours a day or 24 hours a week.
Sick Leave and Benefits: Employees are entitled to 12 days of paid sick leave per year and must produce a medical certificate after no more than three days. Those employed for less than one year are entitled to proportionately adjusted days of sick leave.
Paid Vacations: Employees receive one day of paid leave for every 20 days worked.
Public Holidays: Nepal’s government may decree more than 40 national public holidays each year. Employees are entitled to take 13 paid public holidays including May Day on May 1. Female employees can take 14 days paid leave for public holidays, including Women’s Labour Day on March 8. Public holidays for individual enterprises are decided by the regulatory body or by the employer. The Muslim holidays of Eid-al-Adha and Eid-al-Fitr vary according to the calendar.
Probation Periods: These are generally for six months, during which they can be terminated by either party. If the trial period extends beyond the designated length, employment becomes permanent.
Notice Periods: The usual notice period for employees is 30 days, once they have worked for the employer for one year.
Termination, Severance and Redundancies: The Labour Act allows specific reasons for an employer terminating an employee’s contract. These include: Mutual agreement; end of contract; retirement; performance-based after three written warnings; serious misconduct; redundancies due to business operations. After receiving notification, the employee has 45 days to register a complaint with the relevant Labour Office. Further appeals through the courts are possible. The Labour Act requires severance pay of 30 days’ salary for each year of service, unless the individual receives unemployment benefit under the Social Security Act. Redundancy compensation due to business reasons is one month’s pay for each year of service.
Maternity / Paternity Leave and Benefit: The Labour Act provides for up to 14 weeks (98 days) leave with at least two weeks before the due date and a minimum six weeks after the birth. The employer pays full salary benefit for the first 60 days with the Social Security Fund (SSF) paying for the remainder of leave. Mothers are entitled to a further one month’s unpaid leave if either they and/or the baby are unwell. Miscarriage or still birth after the seventh month of pregnancy entitles to full leave and benefit allowances. The employee must submit birth certificate within three months after the birth, or days may be deducted from other leave entitlements. Maternity leave can be taken only twice during a service period. Fathers are entitled to 15 days’ paid paternity leave.
13th Month Bonus: Employers must pay a 13th month salary relevant to the festival the employee celebrates. Employees who have worked with the enterprise for at least six months are also entitled to a bonus paid out of company profits.
Pensions: Under the Citizen Pension Scheme, individuals can make a minimum monthly contribution of NPR 500 (€3.50, US$3.80) on a monthly, quarterly, six-monthly or annual basis. At age 60 and after a minimum 15 years’ contributions they are eligible for pension support. Those who have not contributed for 15 years can make a lump sum contribution to qualify.
Healthcare and Insurance: Most healthcare facilities focus on Kathmandu, Nepal’s capital, and as of 2020 it was estimated only 60% of the population had access to healthcare facilities within 30 minutes of their home and 20% had no access at all to basic healthcare. The same survey assessed that Nepal had less than one doctor or nurse per 1,000 of the population, less than the World Health Organisation recommendation of 2.3. Nepal allocates less than 5% of its national budget to healthcare. Company-financed private healthcare and insurance is the preferred option for expats to access high quality hospitals and clinics, that are unaffordable for the majority.
Foreign companies recruiting staff in Nepal as part of their international expansion need expert guidance. Incoming companies must hit the ground running in the shortest possible time, but recruiting in Nepal poses issues of availability for foreign companies. Nepal’s education system struggles to supply the skilled human capital necessary to meet the needs of the developing economy.
Nepal offers the potential of one of Asia’s youngest populations, with seven million aged between 15 and 29, yet an increasing number of them seek work abroad. In 2021, census data revealed that 2.2 million Nepalese worked outside the country, 81% of whom are men, highlighting another reason for the shortfall in recruitment options.
These issues add extra complications to the recruitment process and finding workers with the relevant qualifications, skills and experience. More issues follow. Once staff are recruited and onboarded, employers must comply with the Labour Act (2017) and Labour Rules (2015), which spell out the legal rights of their labour force and their own obligations.
These demands add up to a heavy burden. There is a better option … a straightforward, speedy and economical alternative that will have your new staff operational in just a few days, removing the obstacles surrounding recruitment and other aspects of employment.
Bradford Jacobs has the experience and contacts on the ground you need to provide a direct route for your journey into the Nepalese economy. The global reach of our Professional Employer Organisation (PEO) networks will locate the perfect recruits for your plans. Then, through our Employer of Record (EOR) platforms we have your new employees promptly sitting at their desks and screens. This guide highlights the essentials of recruitment and onboarding in Nepal. You can trust Bradford Jacobs to put the brightest talent in position for your company – today!
Recruiting in Nepal
A relatively small workforce of around eight million, with the same number estimated to work in the unregulated informal economy, are complicating factors for foreign companies expanding into Nepal and intending to recruit staff in the country. Additionally, over two million potential employees live and work outside Nepal.
Although Employment Service Centres aim to take a central role in matching employers with workers who have the necessary skills and experience, skills shortages are another barrier. The Overseas Development Institute, a UK organisation that has focussed on Nepal, estimates that migration by Nepalese workers will contribute to a shortage of 3.6 million workers by 2030.
International companies hoping to sidestep these issues by importing staff from their home base also face issues. Only foreigners with a work visa can be employed in Nepal. This involves dealing with a variety of government authorities before even applying to the Immigration Department for the visa.
Complicated? Yes! This highlights where the global experience and local know-how of Bradford Jacobs is essential. Our Professional Employer Organisation (PEO) platforms will bridge the gap between the skills you need and finding the best-qualified talent for your company. We locate the best available talent … and you are quickly operational in Nepal.
Employees’ pre-hire checks in Nepal
General: There is a lack of general guidelines on pre-hire checks in Nepal.
Discrimination and Privacy: To comply with the Privacy Act, personal data considered to be sensitive can be collected only with the individual’s permission and they cannot be discriminated against on the basis of the information. This includes religious or political beliefs; race, origin or caste; sexual orientation.
Criminal Checks: Only the individual concerned can apply, in person, at the relevant local police station or, in rural areas, at the district police headquarters. Prospective employers or agents acting on employers’ behalf cannot apply.
Reference and Educational Checks: Generally, employers are allowed to check a candidate’s work history and educational qualifications if they have their permission.
Basic requirements when recruiting in Nepal
The Labour Act (2017) and Labour Rules (2015) apply to all companies incorporated in Nepal in industry, business or commerce. Complying with the legislation is a basic requirement of companies recruiting staff in Nepal, and this includes drawing up contracts with employees. Section 10 of the Act identifies five types of employment: Regular, work-based; time-based; casual; part-time. Employers should provide a written contract, although it is not mandatory.
Although it is not a legal requirement to provide written contracts, employers must at least supply a letter of appointment or employment agreement and these, or the formal contract, must be signed by the employee. Failure to comply makes employers liable for fines between NPR 10,000 (€70, US$76) up to NPR 500,000 (€3,476, US$3,800).
The multi-dimensional culture of Nepal and its population has evolved over thousands of years and has drawn in tribal, ethnic and social groups and their history of dance, literature and music, folklore and legends, philosophy and the religions of Hinduism and Buddhism, food and festivals. There over 100 languages and dialects, with the official language being Nepali which is written in the Devanagari script. Festivals can last for several days, such as Dashain, the longest and most important in Nepal. Sherpas, mostly located in the higher reaches of the Himalayas, celebrate Mani Rimdu, for the ‘good of the world’. Ethnic unrest is not unknown, but the Nepalese are generally united in pride of their nation.
Nepal Work Culture
Hierarchy: Senior personnel are usually the ones making decisions, although discussions can often involve all team members. Bear in mind that business networks are often based on families and peer groups.
Punctuality: Nepalese are generally punctual in business settings and expect the same in return.
Introductions/Greetings: Both the traditional greeting of ‘namaste’ with the palms together and a slight bow, or a gentle handshake are acceptable.
Language: Nepali is the main business language, although Hindi and English are also used. Check on whether an interpreter is needed.
Gift Giving: Not usual, but if offered use only with the right hand.
Business Cards: Offered with both hands.
Dress Code: Men should dress conservatively with suit, shirt and tie. If women wear a skirt it should at least reach mid-calf level, and trousers are acceptable. Shoulders should be covered.
Negotiations and Meetings: Expect small talk, questions about family and drinking of tea – chiya – to precede any serious business discussions. Locals like to have a good idea of the personality of the people they will be dealing with. Negotiations will generally be direct and comparatively straightforward; deception is not common.
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