Introduction to Manpower License in Nepal
A manpower license in Nepal is the mandatory legal authorization issued exclusively by the Department of Foreign Employment (DoFE). This certification permits companies to legally recruit Nepali citizens for overseas employment opportunities. Without this license, foreign employment business cannot be conducted lawfully within the jurisdiction of Nepal.
The regulatory framework governing this sector has been significantly strengthened in recent years. Consequently, compliance requirements have become more stringent to protect migrant workers and ensure ethical recruitment practices. Furthermore, the licensing process is designed to verify financial capacity, operational readiness, and legal adherence of applicant companies.
This comprehensive guide explains the entire manpower license in Nepal acquisition process. Additionally, it covers renewal procedures, compliance obligations, and critical financial requirements including the updated NPR 20 million capital mandate. Every aspect has been verified against current DoFE regulations to ensure accuracy.
What Is Manpower License in Nepal?
The manpower license in Nepal is officially defined as a statutory permit granted under Section 11 of the Foreign Employment Act, 2064 (2007). This authorization enables private limited companies to operate as recruitment agencies facilitating foreign employment for Nepali workers.
Moreover, this license serves as the cornerstone of legal operation for overseas recruitment businesses. It establishes accountability mechanisms and ensures adherence to worker protection standards. Furthermore, licensed agencies are monitored continuously by DoFE to prevent exploitation and malpractice.
The scope of manpower license in Nepal includes worker recruitment, contract verification, pre-departure orientation, and post-placement support. However, unlicensed operation attracts severe penalties including imprisonment up to three years and fines exceeding NPR 500,000.
Legal Basis and Regulatory Authorities
The manpower license in Nepal is governed primarily by the Foreign Employment Act, 2064 (2007) and the Foreign Employment Rules, 2064 (2008). Additionally, the Labour Act, 2074 (2017) and Company Act, 2063 (2006) provide supplementary regulatory frameworks.
The Department of Foreign Employment (DoFE) operates under the Ministry of Labour, Employment and Social Security. This authority exclusively handles license issuance, renewal, suspension, and cancellation. Furthermore, DoFE maintains the official registry of all licensed manpower agencies in Nepal.
Supporting institutions involved in the process include the Office of Company Registrar (OCR) for corporate verification, Inland Revenue Department for tax clearance authentication, and Nepal Rastra Bank for financial compliance monitoring. Consequently, coordination among these entities ensures thorough vetting of applicants.
Financial Requirements and Capital Structure
Substantial financial commitments are mandated for manpower license in Nepal eligibility. The capital requirements were significantly increased in 2024-2025 to ensure agency solvency and worker protection.
|
Financial Requirement |
Amount (NPR) |
Nature |
Verification Authority |
|
Minimum Paid-up Capital |
20,000,000 |
Mandatory equity |
Licensed Auditor |
|
Bank Guarantee |
5,000,000 |
Security deposit |
Commercial Bank |
|
Collateral Deposit |
15,000,000 |
Operational security |
Nepal Rastra Bank |
|
Application Fee |
10,000-50,000 |
Processing charge |
DoFE Revenue Account |
|
License Issuance Fee |
50,000-100,000 |
Annual authorization |
DoFE Treasury |
|
Annual Renewal Fee |
15,000 |
Maintenance cost |
DoFE |
Furthermore, the paid-up capital must be deposited in a designated corporate bank account and verified by a licensed auditor. Additionally, the bank guarantee must remain valid for the entire license duration and be renewed annually with the license.
The Foreign Employment Welfare Fund contribution of NPR 1,500 per deployed worker is also required. Moreover, agencies must maintain adequate insurance coverage for all recruited workers as mandated by Section 23 of the Foreign Employment Act.
Step-by-Step Process to Obtain Manpower License in Nepal
Step 1: Company Incorporation at OCR
Initially, a private limited company must be registered at the Office of Company Registrar. The memorandum and articles of association must explicitly include foreign employment business objectives. Furthermore, company name approval should reflect recruitment or manpower services.
Step 2: Tax Registration Compliance
Subsequently, Permanent Account Number (PAN) and Value Added Tax (VAT) registration must be obtained from the Inland Revenue Department. Tax clearance certificates for the current fiscal year are mandatory before DoFE application submission.
Step 3: Capital Deposit and Bank Guarantees
Thereafter, the minimum paid-up capital of NPR 20 million must be deposited in a corporate bank account. Additionally, a bank guarantee of NPR 5 million and collateral deposit of NPR 15 million must be arranged through a scheduled commercial bank.
Step 4: Office Infrastructure Establishment
A commercial office space exceeding 500 square feet must be secured. Furthermore, the premises must include separate sections for reception, administration, interviews, and documentation. Fire safety equipment, CCTV surveillance, and visible signage are mandatory requirements.
Step 5: Document Compilation and Verification
All required documents (detailed in the table below) must be compiled and notarized. Additionally, character certificates for all directors must be obtained from local authorities. Police clearance certificates verifying no criminal background involving moral turpitude are essential.
Step 6: Application Submission to DoFE
The completed application form prescribed by DoFE must be submitted to the Department of Foreign Employment in Tahachal, Kathmandu. Furthermore, the application fee must be paid through designated banking channels to the government revenue account.
Step 7: Preliminary Document Scrutiny
DoFE officials conduct initial verification within 7-10 working days. Incomplete applications are returned with deficiency notices. Subsequently, corrections must be submitted within 15 days to avoid application cancellation.
Step 8: Physical Office Inspection
A comprehensive inspection of office premises is conducted by DoFE representatives. Infrastructure, documentation authenticity, and personnel qualifications are verified. Furthermore, the inspection assesses compliance with operational standards and safety protocols.
Step 9: Final Approval and License Issuance
Upon successful inspection, the application is forwarded to the Ministry of Labour for final approval. The license fee must be paid within 7 days of approval notification. Finally, the manpower license in Nepal certificate is issued with a unique license number.
Required Documentation Checklist
|
Document Category |
Specific Requirements |
Issuing Authority |
|
Corporate Legal |
Company registration certificate, MOA/AOA |
Office of Company Registrar |
|
Tax Compliance |
PAN/VAT certificate, latest tax clearance |
Inland Revenue Department |
|
Financial Proof |
Bank guarantee, capital verification, audit report |
Commercial Bank/Licensed Auditor |
|
Personal Credentials |
Citizenship copies, passport photos, educational certificates |
Applicant |
|
Legal Clearance |
Police clearance, character certificates |
District Police/Administration Office |
|
Office Verification |
Lease agreement (min 1 year), ownership proof, layout plan |
Municipal Office/Landlord |
|
Operational Plans |
Business action plan, organizational chart, staff details |
Company Secretary |
Furthermore, all documents must be recent (issued within 3-6 months) and properly attested. Additionally, foreign language documents require certified translation into Nepali or English.
Manpower License in Nepal Renewal and Compliance
Annual renewal is mandatory for maintaining manpower license in Nepal validity. The renewal period extends from Shrawan 1 to Bhadra 30 (first two months of the fiscal year). Late renewals attract penalties of NPR 5,000 per month.
Renewal Documentation:
- Current license certificate
- Updated bank guarantee valid for next fiscal year
- Latest tax clearance certificate
- Audited financial statements of previous year
- Worker deployment records with destination countries
- Proof of welfare fund contributions
- Updated office rent agreement
- Google Plus Code and current Google Map location (new 2025 requirement)
Moreover, license amendments for company name changes, address modifications, or director alterations require separate applications with NPR 5,000 processing fees. Additionally, compliance audits are conducted periodically to verify adherence to ethical recruitment standards.
Common Mistakes to Avoid During Application
Several applications for manpower license in Nepal face rejection due to preventable errors. Furthermore, incomplete documentation causes approximately 60% of initial rejections.
Critical Errors:
- Insufficient paid-up capital verification (below NPR 20 million)
- Inadequate office space or missing infrastructure requirements
- Expired or invalid bank guarantees
- Directors with unresolved criminal records
- Missing pre-departure orientation facilities
- Failure to submit updated Google Plus Code coordinates
- Late renewal applications resulting in license lapse
Consequently, engaging experienced legal professionals is recommended to navigate complex documentation requirements. Additionally, pre-application consultation with DoFE can clarify specific regulatory expectations.
Frequently Asked Questions (FAQ)
What is the current processing time for manpower license in Nepal?
The complete process typically requires 45-60 days. This includes company registration (7-10 days), document preparation (10-14 days), DoFE verification (15-20 days), and inspection scheduling (10-15 days).
How much total investment is required for manpower license in Nepal?
Approximately NPR 41-42 million is required including paid-up capital (NPR 20M), bank guarantee (NPR 5M), collateral (NPR 15M), plus office setup and operational costs (NPR 1-2M).
Can foreign nationals obtain manpower license in Nepal?
Yes, however, at least 51% ownership must be held by Nepali citizens. Furthermore, key management positions must be occupied by Nepali nationals as per Foreign Employment Act requirements.
What are the penalties for operating without manpower license in Nepal?
Unauthorized operation attracts imprisonment up to 3 years, fines up to NPR 500,000, or both. Additionally, all recruitment activities are deemed illegal and contracts void.
How can license status be verified online?
DoFE maintains an online portal at dofe.gov.np featuring a licensed agency database. Furthermore, the blacklist of suspended agencies is published regularly for worker protection.
What is the validity period of manpower license in Nepal?
Licenses remain valid for one fiscal year (Shrawan to Ashad). Subsequently, annual renewal is mandatory to maintain legal operational status.
Are there restrictions on destination countries for worker placement?
Yes, Afghanistan, Iraq, Libya, and certain conflict zones are prohibited. However, 111 countries are currently approved for Nepali worker deployment.
What insurance requirements apply to licensed agencies?
Comprehensive life and accident insurance is mandatory for all deployed workers. Furthermore, agencies must contribute NPR 1,500 per worker to the Foreign Employment Welfare Fund.
Can existing companies convert to manpower agencies?
Yes, provided the company amends its objectives at OCR to include foreign employment business. Additionally, all financial and infrastructure requirements must be met subsequently.
What post-license compliance is monitored by DoFE?
Agencies must maintain worker records, conduct pre-departure orientations, submit quarterly reports, and allow annual audits. Furthermore, advertising foreign jobs requires prior DoFE approval.
Conclusion and Next Steps
The manpower license in Nepal represents a significant regulatory gateway for foreign employment businesses. Furthermore, the enhanced financial requirements and compliance standards reflect Nepal's commitment to ethical recruitment and worker protection.
Successful acquisition requires meticulous preparation of NPR 20 million capital, comprehensive documentation, and adherence to DoFE inspection standards. Additionally, ongoing compliance with renewal obligations and welfare fund contributions ensures sustained operational legitimacy.
For entrepreneurs seeking to enter this sector, professional legal guidance is strongly recommended. Furthermore, consultation with experienced corporate law firms can streamline the application process and prevent costly rejections.
Ready to start your manpower agency? Contact the Department of Foreign Employment at Tahachal, Kathmandu, or visit dofe.gov.np for application forms. Additionally, consider engaging licensed auditors and legal advisors to ensure full compliance with all statutory requirements.
References
Primary Legal Sources:
- Foreign Employment Act, 2064 (2007) - Official legislation governing manpower licensing framework
- Foreign Employment Rules, 2064 (2008) - Detailed procedural regulations and documentation requirements
Government Authorities:
- Department of Foreign Employment Nepal - Primary licensing authority with application portal and licensed agency database
- Ministry of Labour, Employment and Social Security - Policy direction and regulatory oversight
- Office of Company Registrar - Company incorporation and business objective verification
- Inland Revenue Department - Tax clearance and PAN/VAT registration requirements
International Standards:
- International Labour Organization (ILO) - Fair Recruitment - Global standards for ethical recruitment practices adopted by Nepal
- Foreign Employment Welfare Board - Worker protection mechanisms and welfare fund administration
Supporting Documentation:
- Nepal Rastra Bank - Banking regulations for guarantee instruments and foreign exchange
- Nepal Police Headquarters - Character verification and clearance certificate issuance
Last Updated: January 31, 2026 | Next Review: February 28, 2026
