Hiring foreigners in Nepal involves navigating a complex web of labor and immigration regulations designed to prioritize local employment. This guide offers a clear, step-by-step explanation of the process, legal requirements, and practical tips for hiring foreign workers (work permit in Nepal).
Reasons for Hiring Foreign Workers
Nepal’s businesses may need foreign professionals for various reasons:
Unique Expertise: Fields like software development, engineering, or clean energy often require specialized skills not yet widespread in the local market.
Global Project Experience: Major infrastructure or donor-backed initiatives frequently rely on foreign consultants or managers with international track records.
Skill Development: Multinational firms and NGOs hire foreigners to mentor and train Nepali staff, building long-term expertise.
Regulatory Alignment: Companies with foreign investment may bring in specialists to ensure compliance with global standards.
Strategic Leadership: Startups or ventures funded by international capital often appoint foreign executives with worldwide business insight.
International Growth: Firms expanding abroad may need staff with foreign language skills or regional market knowledge.
Despite these demands, Nepal’s laws require employers to prioritize local hires and justify the need for foreign workers.
Legal Requirements for Hiring Foreign Workers
Hiring foreign workers in Nepal is governed by a framework of laws and policies:
Labor Act, 2017 (Section 22)
- Foreign workers can only be hired if no qualified Nepali candidate is available.
- Employers must obtain a work permit from the Department of Labour and Occupational Safety.
- Job vacancies must be advertised locally to demonstrate the absence of suitable Nepali applicants.
- Exceptions may apply for specialists hired under government-approved investment deals, bypassing the advertising requirement.
Detail the process for applying for work permits, required documents, renewal procedures, and conditions for permit revocation.
Immigration Act, 1992 and Rules
- Foreigner needs to apply for Working Visa at the Department of Immigration after a work permit is secured.
Foreign Employment Directive, 2075
- Outlines eligibility, application steps, fees, and restrictions to ensure foreign hiring aligns with Nepal’s labor market goals.
Foreign Investment and Technology Transfer Act, 2019 (Section 27)
- Allows foreign workers in foreign-invested businesses if no qualified Nepali is available and the role supports skill transfer.Such hires must be reported to the Department of Industry (DoI).
Industry-Specific Regulations
- Sectors like finance, telecommunications, or insurance may have additional conditions for foreign employment.
Responsible Authorities
Key government bodies involved include:
- Department of Immigration: Grants work concurrence and Non-Tourist Work Visas.
- Department of Labour and Occupational Safety: Issues work permits.
- Department of Industry: Provides recommendations for permits and visas.
Exemptions from Work Permits
Certain categories are exempt from work permit requirements under Section 23(2) of the Labor Act:
- Diplomats with immunity.
- Individuals covered by international treaties with Nepal.
- Technicians hired for short-term tasks (e.g., equipment maintenance) for less than three months.
How to Hire Foreign Workers: Step-by-Step
Step 1: Post a Job Advertisement
- Announce the vacancy in a national newspaper and the DOLOS online job platform, including:
- Job title and number of openings.
- Required qualifications and experience.
- Application process and deadline.
- Role duties and expectations.
Step 2: Request DOI Recommendation
If no qualified Nepali applicants are found, apply to the DoI for a work permit and work concurrence recommendation. Submit:
- Formal application letter.
- Copy of the newspaper advertisement.
- Candidate’s resume, academic certificates, and passport (valid for at least six months).
- Signed employment contract.
- Company board resolution approving the hire.
- Business registration documents (e.g., MOA, AOA, PAN, industry registration).
- Latest tax clearance certificate.
- Plan to train Nepali staff to eventually replace the foreign worker.
- Power of attorney and foreign investment approval (if relevant).
Step 3: Secure Work Concurrence
Submit the DOI recommendation and supporting documents to the Department of Immigration to obtain work concurrence.
Step 4: Apply for a Work Permit
File an application with DOLOS using the designated form (Annex 1, Labor Rules, 2075), including:
- Original newspaper ad and DOLOS portal confirmation.
- Notarized passport copy, resume, and passport-size photo.
- Employment contract (signed and notarized).
- DOI recommendation and Immigration work concurrence.
- Explanation of why no local candidates were selected.
- Training plan, PAN certificate, tax clearance, and Social Security Fund (SSF) registration.
- Relevant ministry approval (if required).
Fees:
- NPR 15,000 for up to 6 months.
- NPR 20,000 for over 6 months.
- Overseas applicants pay in convertible foreign currency.
Processing Time: Around 7 working days.
Step 5: Request Work Visa Recommendation
After obtaining the work permit, apply to the DOI for a Work Visa recommendation.
Step 6: Apply for Working Visa
Submit to the Department of Immigration:
- Online visa application.
- DOI recommendation and work concurrence.
- DOLOS work permit.
- Employment contract.
- Company’s recent tax clearance certificate.
- Applicant’s tax certificate (for renewals).
- Passport and existing visa copy (if already in Nepal).
Permit and Visa Validity
- Initial Validity: One year, renewable annually.
- Maximum Duration: Five years for highly skilled workers; three years for others.
- Renewals must be requested before expiry to avoid legal issues.
Process Overview
- Assess staffing needs.
- Advertise for local candidates.
- Document the need for a foreign hire.
- Obtain DOI recommendation and Immigration work concurrence.
- Secure a DOLOS work permit.
- Apply for a Work Visa.
- Onboard the employee and comply with labor/tax regulations.
- Renew permits and visas as needed.
Consequences of Non-Compliance
Hiring foreign workers without proper authorization can lead to:
- Fines up to NPR 200,000, plus NPR 5,000 per worker per month for continued violations.
- Visa cancellation and deportation of the worker.
- Legal penalties or employer blacklisting.
- Increased scrutiny in regulated industries.
Special Cases
- NGOs and Donor Projects: May require coordination with the Social Welfare Council or other bodies.
- Foreign Investors/Entrepreneurs: Must secure Business or Investor Visas via the Investment Board Nepal or DOI, but work permits are still needed for foreign employees.
Foreign Workers in Nepal: Key FAQs
1. Can foreigners legally work in Nepal?
Yes, foreigners can work in Nepal with a valid work permit issued by the Department of Labour and Occupational Safety (DoLOS) and a Non-Tourist Work Visa issued by the Department of Immigration.
2. What are the steps to hire a foreign worker in Nepal?
To legally employ a foreign national, a company must:
Advertise the vacancy locally to ensure no qualified Nepali is available.
Submit a justification letter explaining the need for a foreign employee.
Obtain prior approval from the Department of Industry (DoI) or Investment Board, if applicable.
Secure a work permit from DoLOS.
Apply for a Non-Tourist Work Visa from the Department of Immigration after the work permit is granted.
3. Who is exempt from obtaining a work permit?
The following individuals are exempt:
Diplomats and representatives of foreign governments or agencies
Persons covered by international treaties or agreements
Short-term technical experts or consultants (staying less than 3 months)
Certain individuals working under approved foreign investment projects
4. What is the limit on hiring foreign workers?
Generally, companies may employ up to 5% of their total workforce as foreign nationals.
For foreign-invested companies, up to three foreign employees are permitted unless additional approval is granted.
5. What documents are required to apply for a work permit?
Copy of the local vacancy advertisement
Justification letter from the employer
Resume and passport copy of the foreign applicant
Employment contract
Employer’s tax clearance certificate
Training and knowledge transfer plan
Registration with the Social Security Fund (SSF)
6. How long does the work permit process take?
The work permit application typically takes 30 to 45 working days, depending on the completeness of documentation and approvals required.
7. What is the validity of a work permit?
A work permit is usually valid for one year and can be renewed:
Up to five years for skilled professionals
Up to three years for other roles
8. What are the official fees for a work permit?
NPR 15,000 for a permit valid up to 6 months or NPR 20,000 for a permit valid over 6 months
9. Which visa should foreign workers apply for?
Foreign workers must obtain a Non-Tourist Work Visa, which is granted based on the work permit and mirrors its validity period.
10. Can foreign employees repatriate their earnings?
Yes. Foreign workers are allowed to remit:
Up to 75% of net income
100% of retirement and pension benefits
Alternatively, up to USD 36,000 per year
11. What are the consequences of non-compliance?
Violations may lead to:
Fines or penalties
Revocation of visa or work permit
Deportation of the foreign national
Legal sanctions against the employer
12. Can work permits be renewed?
Yes. Work permits must be renewed within 30 days of expiry. Renewal depends on the worker’s performance and the necessity of the role within the business sector.
This guide equips employers with the knowledge to hire foreign workers in Nepal while staying compliant with local laws and meeting business objectives.