Manpower License in Nepal | Process, Requirements, Cost

1. Introduction to Manpower Licensing in Nepal

A manpower license in Nepal is an authorization granted by the Department of Foreign Employment (DoFE) under the Ministry of Labour, Employment and Social Security (MoLESS). It permits a private company to operate as a manpower agency and supply Nepali workers to foreign employment markets. This license ensures that only legally registered and financially sound companies can recruit, train, and deploy Nepali citizens abroad. Manpower License in Nepal | Process, Requirements, Cost.

The manpower license system was introduced to regulate overseas employment, prevent fraud, and ensure the welfare of migrant workers. Only a company holding a valid manpower license can send workers abroad for employment purposes. Without the license, recruitment or placement of workers is prohibited under Nepali law. The licensing framework establishes legal accountability and professional standards for manpower agencies operating in Nepal. Medha Law and Partners Is a best Corporate law firm in Nepal.

2. Legal Basis of Manpower Licensing in Nepal

The manpower license process is governed primarily by the Foreign Employment Act, 2064 (2007) and the Foreign Employment Rules, 2064 (2007). These laws define the powers, duties, and procedures related to manpower licensing, recruitment, monitoring, and worker protection.

Key legal provisions include:

• Section 10 of the Foreign Employment Act, 2064 – Requirement of license for foreign employment business.

• Section 11 – Procedures for applying and obtaining the manpower license.

• Rule 4 of the Foreign Employment Rules, 2064 – Specifies documentation and capital requirements.

• Rule 6 – Describes the inspection and verification process before license issuance.

In addition to these, Labour Act, 2074 (2017) and Company Act, 2063 (2006) also apply to manpower companies regarding employment terms, company registration, and financial obligations. These statutes collectively ensure that manpower agencies function transparently and within a defined legal structure.

3. Authorities Responsible for Manpower Licensing

The Department of Foreign Employment (DoFE) is the primary authority responsible for granting manpower licenses in Nepal. It operates under the Ministry of Labour, Employment and Social Security (MoLESS). The department regulates the foreign employment industry, ensuring all manpower companies comply with statutory provisions.

The DoFE performs the following key roles:

• Evaluates license applications and verifies eligibility.

• Conducts office inspections and interviews with promoters.

• Approves, renews, or cancels manpower licenses.

• Maintains the national record of licensed manpower agencies.

• Monitors agency performance and handles worker complaints.

In addition, District Administration Offices, Metropolitan Offices, and Banks play supportive roles in verifying documents, lease agreements, and financial deposits. The coordination among these agencies ensures regulatory integrity in manpower licensing across Nepal.

4. Eligibility Criteria for Obtaining Manpower License

To apply for a manpower license, the applicant must meet the eligibility conditions outlined in the Foreign Employment Rules, 2064 and related directives issued by the DoFE.

The main eligibility criteria include:

• The applicant must be a Private Limited Company registered under the Company Act, 2063.

• The company must have a minimum paid-up capital of NPR 20 million.

• The promoters or directors must be Nepali citizens with no criminal record related to fraud or foreign employment offenses.

• The company must possess an appropriate office space equipped for manpower operations.

• The company must provide a bank guarantee as prescribed by the DoFE.

These criteria ensure that only legitimate and capable entities engage in foreign employment business, safeguarding both workers and the industry’s reputation.

5. Required Documents for Manpower License Application

Applicants must submit a comprehensive set of documents when applying for a manpower license at the Department of Foreign Employment. The required documents include:

• Company Registration Certificate (from the Office of Company Registrar)

• PAN/VAT Registration Certificate (from Inland Revenue Department)

• Memorandum and Articles of Association

• Citizenship copies of promoters and directors

• Tax clearance certificate of the company

• Proof of office lease agreement or ownership

• Bank guarantee certificate and financial statement

• Character certificate of promoters

• Proposed organizational structure and staff list

• Application form prescribed by DoFE

• Photographs of office premises and board

• Commitment letter to comply with the Foreign Employment Act, 2064

All documents must be attested and submitted in the prescribed format to avoid rejection or delays in processing.

6. Step-by-Step Process for Manpower License Application

The manpower license application process involves multiple legal and administrative stages. The steps are:

1. Company Registration – Register as a private limited company at the Office of Company Registrar.

2. PAN/VAT Registration – Obtain PAN and VAT certificates from the Inland Revenue Department.

3. Capital Deposit and Bank Guarantee – Deposit the required capital and obtain a bank guarantee from a recognized bank.

4. Office Setup – Establish an office meeting DoFE inspection standards.

5. Document Preparation – Compile all required documents as per the checklist.

6. Application Submission – Submit the completed application and fees to DoFE.

7. Inspection and Verification – DoFE officials visit the office for verification.

8. Approval and License Issuance – Upon successful verification, DoFE grants the manpower license.

This step-by-step procedure ensures transparency and regulatory compliance for all manpower agencies operating in Nepal.

7. Timeframe for Manpower License Approval Process

The average timeframe for manpower license approval depends on the completeness of the application and DoFE’s workload. In general:

• Document preparation: 3–5 working days

• Application review by DoFE: 2–3 weeks

• Office inspection and verification: 1 week

• Final approval and license issuance: 5 working days

Overall, the complete process takes approximately 30 to 40 working days. In cases where documents are incomplete or require clarification, the process may extend further. Applicants should ensure all legal and financial documents are accurate to minimize delays.

8. Government Fees and Financial Obligations Explained

Government fees and deposits associated with manpower license registration are specified by the Department of Foreign Employment. The typical fee structure includes:

• Application processing fee: NPR 50,000

• Inspection fee: As prescribed by DoFE

• License issuance fee: NPR 100,000

• Bank guarantee: NPR 20,00,000 (Twenty Lakhs)

• Office infrastructure investment: As required by business plan

The bank guarantee serves as a financial safeguard ensuring the company’s responsibility toward workers. All payments are made to government accounts and are non-refundable upon application submission.

9. Office Setup and Infrastructure Requirements

Before obtaining a manpower license, the applicant must establish a fully functional office that complies with DoFE’s infrastructure standards.

The requirements include:

• Minimum office space of 500 square feet within an accessible location.

• Separate sections for reception, administration, interview, and documentation.

• Computer systems, internet connection, telephone lines, and record-keeping facilities.

• Fire safety arrangements, CCTV cameras, and visible office name board.

During inspection, DoFE officials verify the presence and functionality of all facilities. Non-compliance with office standards can lead to application rejection or delay.

10. Bank Guarantee and Security Deposit Requirements

A bank guarantee is a mandatory requirement for manpower license approval. It ensures the applicant’s financial credibility and accountability.

According to Rule 10 of the Foreign Employment Rules, 2064, every manpower company must submit a bank guarantee of NPR 20,00,000. This guarantee remains with the DoFE as security for compensation or penalties in case of misconduct or violation.

Additionally, the applicant must maintain a cash deposit of NPR 3,00,000 in the company’s account. The bank guarantee must be renewed periodically, and failure to maintain the deposit can result in suspension or cancellation of the manpower license.

11. Inspection and Verification by Government Authorities

Before granting the manpower license, DoFE officials conduct a detailed inspection and verification process. The inspection ensures that the applicant company meets all physical, technical, and administrative requirements.

Inspection covers the following aspects:

• Verification of office location and setup.

• Cross-checking documents and bank guarantee details.

• Confirmation of promoters’ identity and character.

• Review of financial capacity and company structure.

A written inspection report is prepared and forwarded to the approval section. Only after a positive inspection report does the DoFE issue the manpower license.

12. Renewal and Amendment of Manpower License

A manpower license is valid for one year from the date of issuance and must be renewed annually. Renewal applications should be filed at least 30 days before expiry.

For renewal, the applicant must:

• Submit a renewal application form.

• Provide updated tax clearance and bank guarantee renewal.

• Pay the prescribed renewal fee.

If the company intends to change its name, office address, or add new destination countries, it must apply for an amendment with supporting documents. Failure to renew the license on time can lead to penalties or suspension under the Foreign Employment Act, 2064.

13. Legal Compliance and Penalties for Violations

License holders must comply with all provisions of the Foreign Employment Act, 2064 and Foreign Employment Rules, 2064. Violations can lead to strict penalties, including suspension or cancellation.

Common offenses include:

• Sending workers abroad without valid contracts.

• Charging excessive service fees.

• Operating without renewing the license.

• Submitting false documents or information.

Under Section 44 of the Act, such offenses may result in imprisonment, fines, or permanent disqualification from foreign employment business. Continuous compliance with law and ethical practices is essential for sustainable manpower operation.

14. Role of Medha Law and Partners in Licensing

Medha Law and Partners provides specialized legal services for manpower licensing and foreign employment compliance. The firm assists in every stage—from company formation to document preparation and representation before the Department of Foreign Employment.

Our services include:

• Legal consultation on eligibility and process.

• Preparation and verification of all application documents.

• Drafting of bank guarantee and corporate agreements.

• Coordination with DoFE for inspection and approval.

• Assistance in renewal, amendment, and compliance monitoring.

With extensive experience in foreign employment law, Medha Law and Partners ensures accuracy, timeliness, and adherence to all statutory requirements.

15. Conclusion and Practical Guidance for Applicants

Obtaining a manpower license in Nepal is a structured legal process aimed at maintaining order in the foreign employment sector. Applicants should focus on complete documentation, financial readiness, and compliance with inspection standards.

Engaging a legal expert like Medha Law and Partners simplifies the process and minimizes the risk of rejection or penalty. By following the requirements of the Foreign Employment Act, 2064 and maintaining operational transparency, manpower agencies can contribute responsibly to Nepal’s foreign employment industry.

Frequently Asked Questions (FAQs)

1. What is manpower license in Nepal?
A manpower license is an official authorization issued by the Department of Foreign Employment that allows private companies to legally recruit and deploy Nepali workers for foreign employment.

2. Where to apply for manpower license?
Applications must be submitted to the Department of Foreign Employment under the Ministry of Labour, Employment and Social Security, located in Tahachal, Kathmandu.

3. How much does manpower license cost?
The total cost varies but includes NPR 50,000 application fee, NPR 100,000 license fee, and NPR 20,00,000 bank guarantee, excluding office setup and legal service expenses.

4. What documents are needed for application?
Documents include company registration certificate, tax clearance, bank guarantee, office lease agreement, promoter citizenships, and prescribed DoFE application forms.

5. How long does approval process take?
The manpower license approval process generally takes 30 to 40 working days depending on document completeness and DoFE verification schedule.

6. Who issues manpower license in Nepal?
The manpower license is issued by the Department of Foreign Employment (DoFE) under the Ministry of Labour, Employment and Social Security.

7. What is required bank guarantee amount?
Applicants must provide a bank guarantee of NPR 20,00,000 as financial assurance for compliance and worker protection.

8. How can manpower license be renewed?
Renewal is required annually by submitting a renewal form, tax clearance, and renewed bank guarantee to the Department of Foreign Employment.

9. Can Medha Law assist in licensing?
Yes, Medha Law and Partners offers complete legal assistance for manpower license registration, documentation, representation, and renewal procedures.