Manpower License in Nepal

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What Is a Manpower License in Nepal?

A manpower license in Nepal is the sole legal authorization issued by the Department of Foreign Employment (DOFE) under the Ministry of Labour, Employment and Social Security. This license permits private companies to recruit Nepali citizens for foreign employment opportunities. Without this license, no entity is permitted to operate foreign employment business or send workers abroad. The licensing framework was established under the Foreign Employment Act, 2064 (2007) and Foreign Employment Rules, 2064 (2008) to protect migrant workers from exploitation while enabling regulated recruitment operations. The license ensures that only financially sound, ethically compliant agencies can operate. It mandates strict capital requirements, bank guarantees, and operational standards that safeguard worker welfare throughout the deployment process.

Legal Framework Governing Manpower Licensing

The manpower license Nepal process operates under multiple statutes that collectively regulate the foreign employment sector:

Section 10 of the Foreign Employment Act explicitly prohibits any entity from operating foreign employment business without obtaining a valid license from DOFE. Violations attract imprisonment up to three years and fines up to NPR 500,000 under Section 35 of the Act.

Financial Requirements for Manpower License

Obtaining a manpower license in Nepal requires substantial financial commitments to ensure agency accountability and worker protection:

The bank guarantee must be issued by a recognized commercial bank (Class A) operating in Nepal. This guarantee remains valid throughout the license period and requires annual renewal. Failure to maintain the guarantee results in automatic license suspension under Rule 15 of the Foreign Employment Rules.

Step-by-Step Process to Obtain Manpower License

The manpower license process in Nepal involves sequential stages across multiple government authorities:

Phase 1: Company Incorporation (7-15 Days)

First, a private limited company must be registered with the Office of Company Registrar (OCR). The Memorandum and Articles of Association must explicitly include foreign employment business objectives. The company name must be unique and not duplicate existing registered entities.

Phase 2: Tax Registration (3-5 Days)

Subsequently, PAN registration must be obtained from the Inland Revenue Department. This Permanent Account Number is mandatory for all financial transactions and tax compliance. VAT registration may also be required depending on projected turnover.

Phase 3: Local Business Registration (5-7 Days)

Next, registration must be completed at the local Ward Office under the Local Governance Act. This municipal registration confirms local recognition and enables further federal-level approvals.

Phase 4: Financial Deposits (7-10 Days)

The company must then deposit:

• NPR 5 million minimum paid-up capital in a corporate bank account
• NPR 2-5 million bank guarantee with DOFE
• NPR 1.5 crore cash/collateral deposit as additional security

Bank certificates verifying these deposits are mandatory for application submission.

Phase 5: DOFE Application Submission (1 Day)

The complete application package must be submitted to DOFE including:

• Prescribed application form
• Company registration certificate
• PAN/VAT certificates
• Bank guarantee and deposit confirmations
• Office lease agreement (minimum 500 sq. ft. commercial space)
• Citizenship and police clearance certificates of directors
• Educational qualifications (minimum SLC/SEE)
• Detailed business plan

Phase 6: Verification and Inspection (15-30 Days)

DOFE officials conduct document verification and physical office inspection. The inspection verifies:

• Office location and infrastructure adequacy
• Document authenticity
• Promoter identity and character
• Financial capacity assessment

Phase 7: License Issuance (3-7 Days)

Upon successful inspection and verification, DOFE issues the manpower license valid for one fiscal year (Shrawan 1 to Ashad 30). Total Timeline: 45-90 days depending on document completeness and processing speed.

Documentation Requirements Checklist

Complete documentation is essential for manpower company registration in Nepal: Corporate Documents:

• Company registration certificate (OCR)
• Memorandum and Articles of Association (foreign employment objectives)
• PAN/VAT registration certificates
• Municipal business registration
• Audited financial statements

Financial Documents:

• Bank certificate of paid-up capital deposit (NPR 5 million minimum)
• Bank guarantee (NPR 2-5 million)
• Cash deposit confirmation (NPR 1.5 crore)

Personal Documents:

• Citizenship certificates of all directors and shareholders
• Police clearance certificates (no criminal record involving moral turpitude)
• Educational certificates (minimum SLC/SEE)
• Character certificates from local authorities
• Recent passport-size photographs

Operational Documents:

• Office ownership deed or registered lease agreement (minimum 3 years)
• Office layout plan and photographs
• Detailed business plan and operational procedures
• Commitment letter to comply with Foreign Employment Act
• Bio-data of proposed employees
• Organizational structure chart

License Renewal and Amendment Procedures

Manpower license renewal in Nepal is mandatory annually to maintain operational legality:

Renewal Timeline

Applications must be submitted between Shrawan 1 and Bhadra 30 (first two months of fiscal year). Late submissions incur penalties of NPR 5,000 per month. Licenses not renewed by Poush 30 face automatic cancellation requiring fresh application.

Renewal Documentation

• Renewal application form with compliance undertaking
• Updated bank guarantee valid for next fiscal year
• Current tax clearance certificate
• Audit report of previous year's financial statements
• List of workers deployed during previous year
• Proof of worker welfare fund contribution (NPR 1,000-1,500 per worker)
• Updated office rent agreement and infrastructure photographs

Amendment Procedures

License amendments require prior DOFE approval for:

• Company name or address changes
• New promoter or director additions
• Shareholding pattern alterations exceeding 20%
• Office location changes

Amendment applications require NPR 5,000 processing fee and supporting documents. Processing time ranges from 15-20 days.

Compliance Obligations for License Holders

Licensed manpower agencies must maintain continuous compliance with statutory obligations: Worker Protection Requirements:

• Pre-departure orientation training for all deployed workers
• Complete worker records maintenance (contracts, medical reports, visa copies)
• Worker welfare fund contribution within 15 days of deployment
• Response to worker complaints within 7 days
• Reporting of worker deaths, injuries, or detentions within 24 hours
• Quarterly deployment reports submission to DOFE

Financial Compliance:

• Service charges capped at NPR 10,000 for most destination countries
• Insurance procurement of minimum NPR 500,000 per worker
• Maintenance of valid bank guarantee throughout license period

Operational Standards:

• Ethical recruitment practices adherence
• Destination country labour law compliance
• Bilateral agreement observance
• Cooperation with DOFE inspections and investigations

Penalties for Non-Compliance

Violations of manpower license Nepal regulations attract severe penalties:

Frequently Asked Questions (FAQs)

What is the validity period of a manpower license in Nepal?

The license remains valid for one fiscal year (Shrawan 1 to Ashad 30) and requires annual renewal to maintain operational authority.

Can foreign nationals establish manpower companies in Nepal?

No. The Foreign Employment Act, 2064 restricts manpower company ownership exclusively to Nepali citizens. All promoters and directors must hold Nepali citizenship.

How long does the manpower license application process take?

The complete process requires 45-90 days, contingent upon document completeness, successful inspection, and DOFE processing capacity.

What is the current bank guarantee amount required?

NPR 2,000,000 to 5,000,000 bank guarantee is mandatory, issued by a commercial bank and maintained throughout the license period as worker security.

What are the grounds for license cancellation?

DOFE can cancel licenses for charging excessive fees, fraudulent deployment, document falsification, bank guarantee default, or violation of worker protection obligations under Section 38.

Can manpower agencies charge recruitment fees to workers?

Service charges are capped at NPR 10,000 for most destination countries. Exceeding prescribed limits constitutes a punishable offense under Section 36.

What happens if renewal application is submitted late?

Late submissions incur penalties of NPR 5,000 per month. Licenses not renewed by Poush 30 face automatic cancellation requiring fresh application.

Are there restrictions on the number of workers an agency can deploy?

No statutory limits exist on deployment numbers. However, agencies must maintain capacity to provide pre-departure orientation and post-deployment support to all workers.

Can a manpower license be transferred to another company?

No. Licenses are non-transferable and issued to specific corporate entities. Change in ownership exceeding 20% requires fresh application.

Where is the DOFE office located?

The Department of Foreign Employment is located at Buddhanagar, Kathmandu, Nepal. Contact: 01-4782454, email: info@dofe.gov.np. Call Center: 1141.

Why Choose Corporate Np for Manpower Licensing

Navigating the manpower license process in Nepal requires specialized expertise and meticulous attention to regulatory detail. Corporate Np provides comprehensive licensing services including:

• Complete documentation preparation and verification
• DOFE application submission and follow-up
• Bank guarantee arrangement assistance
• Office setup compliance guidance
• License renewal management
• Ongoing compliance advisory

Our legal team ensures your application meets all statutory requirements, minimizing rejection risk and processing delays. Contact Corporate Np today to begin your manpower company registration process.

Important Disclaimer

This content is prepared for informational and educational purposes only. It does not constitute legal advice. Foreign employment regulations in Nepal are subject to frequent amendments. Always verify current requirements with the Department of Foreign Employment or qualified legal counsel before initiating the application process. The information presented reflects regulations as of March 2025 and may not capture recent regulatory changes.

References 

• Department of Foreign Employment Nepal - Official licensing authority
• Foreign Employment Act, 2064 (2007) - Primary legislation
• Office of Company Registrar Nepal - Company incorporation
• Inland Revenue Department Nepal - Tax registration
• Ministry of Labour, Employment and Social Security - Policy oversight
• Nepal Rastra Bank - Banking regulations
• Foreign Employment Rules, 2064 (2008) - Operational procedures