Manpower Company Registration in Nepal (2026): Licence, Capital & Process

Foreign employment is one of Nepal's largest economic sectors, with remittance from migrant workers accounting for a major share of GDP. The agencies that recruit, train, document and place Nepali workers in destination countries operate under the strictest regulatory regime in Nepali commercial law — the Foreign Employment Act 2064 (2007) and the Foreign Employment Rules 2064, administered by the Department of Foreign Employment under the Ministry of Labour, Employment and Social Security. Operating a recruitment agency without a manpower licence is a criminal offence; operating with a licence but in breach of the conditions can lead to suspension, fine and licence cancellation.

This 2026 (2083 BS) practitioner's guide is the file every manpower licence application is built on: the FEA 2064 statutory framework, the eligibility conditions for the promoter group, the paid-up capital and bank guarantee requirements, the collateral and physical-office conditions, the destination-country approvals, the DoFE licensing process step by step, the post-licence compliance regime, and the common reasons applications are rejected at scrutiny. Whether you are setting up a fresh recruitment agency, renewing an existing licence, or running a Foreign Employment Board file under the worker-protection framework, this is the architecture your engagement runs inside.

Alpine Law Associates — Nepal Bar Council-registered corporate-law team handling manpower company incorporation, FEA 2064 licensing, destination-country approvals, ongoing DoFE compliance and worker-protection-framework engagements.

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What is a manpower company under Nepali law?

A manpower company in Nepal is a private limited company licensed under the Foreign Employment Act 2064 to recruit Nepali workers and place them with employers in destination countries. The licence — typically called the "manpower licence" or "foreign employment licence" — is issued by the Department of Foreign Employment and authorises the company to conduct foreign-employment recruitment activities lawfully. Without the licence, recruitment for overseas employment is illegal and carries criminal liability under the FEA 2064.

The licence is the centrepiece of a worker-protection regime. The capital, bank guarantee and collateral requirements exist not for the agency's commercial credit, but as the financial backstop for worker claims — failed placements, abuse or breach in destination countries, mid-contract repatriation costs. Where a worker's claim is upheld by the Foreign Employment Board or the labour tribunal and the agency does not pay, the bank guarantee and collateral are encashed to settle the claim. This worker-protection structure is the reason the licence is materially heavier than a standard commercial-services licence.

Foreign Employment Act 2064 — the statutory framework

The Foreign Employment Act 2064 (2007) is the governing statute. The Act and its companion Foreign Employment Rules 2064 cover four broad areas: licensing of recruitment agencies, the worker's rights and protections in the foreign-employment cycle, the regulatory mandate of the Department of Foreign Employment and the Foreign Employment Board, and offences and penalties for breach. Key chapters cover the licensing regime, demand letter and contract requirements, recruitment-fee caps, worker training requirements, the Welfare Fund, and the dispute-resolution framework.

The Act is administered by the Department of Foreign Employment (dofe.gov.np) under the Ministry of Labour, Employment and Social Security. The Foreign Employment Board (FEPB) handles welfare-fund administration and worker-grievance matters, while the Foreign Employment Tribunal handles disputes. Periodic amendments to the Act and Rules adjust capital, bank-guarantee and fee parameters; counsel verifies current parameters against the latest amendment at file structuring.

Eligibility — who can promote a manpower company?

Eligibility is restrictive. The principal conditions are:

• All promoters must be Nepali citizens. Foreign equity in manpower companies is prohibited; the manpower sector sits on the FITTA negative list for foreign investment. Promoters must produce citizenship certificates and the FDI route is not available.
• Clean record requirement. Promoters must not have been convicted of foreign-employment offences, fraud, human-trafficking-related offences or other disqualifying convictions under the FEA 2064 or the criminal code. A police clearance / character certificate is included in the application.
• No directorship in revoked licence companies. Promoters who held directorship in a manpower company whose licence was revoked by DoFE for breach are typically barred from being promoters of a new manpower company for a defined period.
• Capacity and bona fides. DoFE reviews the promoter group's capacity and bona fides — financial standing, industry experience or relevant background, and the broader commercial profile.
• Minimum number of directors. The standard Companies Act 2063 requirement applies — at least two shareholders/directors in a private limited company structure.

Paid-up capital, bank guarantee and collateral

The financial architecture is the heart of the licence. The three deposits work together to backstop worker claims:

• Paid-up capital — typically NPR 20 million (NPR 2 crore). The company's paid-up capital must be deposited at the time of incorporation and confirmed in the bank balance at the time of licence application. This capital is the operational capital of the company — it is not deposited with DoFE but must be evidenced.
• Bank guarantee — typically NPR 50 lakh (NPR 5 million). An unconditional bank guarantee issued by a commercial bank in favour of the Government of Nepal — encashable by DoFE on default. The guarantee is renewable on the licence cycle and is refundable on licence surrender subject to no outstanding worker liability.
• Immovable property collateral — typically NPR 1.5 crore. An immovable property (land or building) valued by an approved valuer and pledged in favour of DoFE under a registered mortgage. The collateral exists to backstop liabilities exceeding the bank guarantee.

The exact parameters cycle with FEA amendments and the annual Finance Act; counsel verifies the current numbers against the latest DoFE notice before structuring the file. The aggregate financial exposure to set up a manpower company is therefore substantial — paid-up capital plus the locked-up bank guarantee plus the pledged collateral, before any working capital for actual operations.

Physical office and operational conditions

DoFE requires a physical office meeting specific conditions before the licence is issued and on an ongoing basis:

• Office location and size. Office typically in Kathmandu Valley (where DoFE is headquartered) with a minimum floor area, often around 500 sq ft, accessible to walk-in workers and meeting basic infrastructure standards.
• Signage and identification. The licensed company name and licence number prominently displayed at the office entrance, on the company's correspondence, website, and any marketing material.
• Worker interaction area. A reception area where workers can be met, briefed, and have their documentation reviewed — meeting DoFE's worker-protection expectations.
• Staff capacity. Staff with adequate capacity to handle the recruitment cycle — documentation, contracts, training arrangements, departure logistics.
• Record-keeping. Maintenance of worker records, contracts, payment records, and DoFE-prescribed registers either physically or in a DoFE-approved digital system.

Step-by-step manpower licence application at DoFE

1. Company incorporation at OCR. Incorporate the company as a private limited at the Office of Company Registrar via the CAMIS portal — see our company registration in Nepal guide. The MoA objects must include "foreign employment recruitment" or equivalent activity. Paid-up capital of NPR 20 million is subscribed and deposited.
2. PAN / VAT at IRD. Obtain PAN and VAT registration at the Inland Revenue Department.
3. Bank guarantee procurement. Arrange the NPR 50 lakh unconditional bank guarantee from a commercial bank in favour of the Government of Nepal, valid for the licence period and renewable on cycle.
4. Collateral valuation and mortgage. Identify the immovable property (the company's or a promoter's), have it valued by an approved valuer to support the NPR 1.5 crore collateral, and execute a registered mortgage in favour of DoFE at the Land Revenue Office.
5. Office setup and DoFE pre-inspection. Lease or buy the office meeting DoFE's physical conditions, install required signage and worker-interaction infrastructure, and prepare for DoFE's pre-licensing physical inspection.
6. Application to DoFE. File the licence application at DoFE with the full document set — company documents, promoter documents, capital and guarantee evidence, collateral mortgage deed, office documents, business plan, destination-country preliminary correspondence, and the prescribed application fee.
7. DoFE scrutiny and physical inspection. DoFE reviews the application, conducts a physical inspection of the office, verifies the promoter group's background, and may raise queries on the business plan or destination-country approach. Resolution of queries is typically over a 2 to 4 week window.
8. Licence issuance. On approval, DoFE issues the foreign-employment licence with the company's unique licence number, valid for the prescribed period (typically 2 to 5 years) and renewable on cycle. Operations can begin once the licence is in hand.
9. Destination-country approval. For each destination country, the company secures the destination-country labour-ministry approval or accreditation (e.g. Qatar, UAE, Saudi Arabia, Malaysia, Japan, South Korea have their own accreditation regimes) before placing workers there.

Post-licence compliance regime

Operating a licensed manpower company is a heavy ongoing compliance load:

• Demand letter and contract per worker. Every placement begins with a demand letter from the foreign employer attested at the Nepal embassy / consulate in the destination country, a worker contract translated into Nepali, and contract registration at DoFE before departure.
• Pre-Departure Orientation Training (PDOT). Every worker must complete the prescribed PDOT before departure — typically delivered by a DoFE-approved training institute, with certificate retention in the worker's file.
• Recruitment-fee cap compliance. The Act caps the recruitment fee the agency can charge the worker — exceeding the cap is a serious offence triggering refund, fine and licence suspension.
• Foreign Employment Welfare Fund contribution. A fixed contribution per placement to the Welfare Fund administered by the Foreign Employment Board — used for worker welfare, repatriation in crisis, dependent support and similar.
• Worker grievance handling. The agency must operate a grievance handling mechanism, respond to Welfare Board notices on individual cases, and coordinate with the Nepali mission in the destination country where needed.
• Annual return and inspection. An annual return to DoFE covering placements made, destination-country breakdown, fees collected, and welfare-fund contributions. DoFE conducts periodic physical inspections of the office and records.
• Bank guarantee and collateral maintenance. The NPR 50 lakh bank guarantee must be renewed on cycle without lapse; the collateral mortgage must be maintained without release. Lapse triggers licence suspension.

Common reasons manpower licence applications are rejected

• Promoter background issue. Police-clearance issues with a promoter, prior directorship in a revoked-licence company, or undisclosed criminal record surfacing at DoFE verification — typically fatal to the application.
• Capital not deposited or evidenced. NPR 20 million paid-up capital not actually subscribed and deposited, or the bank certificate not matching the application figure.
• Bank guarantee from unapproved bank or with conditional terms. The guarantee must be unconditional, on-demand, and from an approved commercial bank in the standard DoFE format. Departures from format trigger query.
• Collateral undervalued or with title defects. The property valuation must support the NPR 1.5 crore collateral; the title must be clear and registrable at the Land Revenue Office. Property with disputes, lis pendens, or family-partition issues is rejected.
• Office not meeting physical conditions. Office below the floor-area minimum, not in an acceptable location, or without the prescribed worker-interaction infrastructure fails the physical inspection.
• MoA objects mismatch. The company's MoA does not include the foreign-employment-recruitment activity or has narrow drafting that does not cover the proposed scope. Resolved by MoA amendment before re-applying.
• Destination-country approach unclear. The business plan does not articulate a credible destination-country approach — which countries, which employers, which categories of workers. DoFE wants confidence that the licence will be used responsibly.

How can Alpine Law Associates help with manpower licence registration?

Alpine Law Associates handles manpower licensing as a sequenced engagement that runs from promoter eligibility through DoFE licensing to ongoing compliance and renewal. Our corporate-law team covers promoter due-diligence and gap-closing, company incorporation at OCR with foreign-employment-aligned MoA, PAN / VAT registration, bank guarantee structuring, collateral identification, valuation and mortgage execution at the Land Revenue Office, office set-up coordination, DoFE licence application drafting and filing, query response and physical-inspection support, destination-country accreditation, and ongoing compliance — annual return, Welfare Fund contributions, demand-letter and contract documentation, worker grievance handling and renewal of bank guarantee and licence.

For agencies running into licence suspension or revocation proceedings, we run the defence file at DoFE and (where applicable) the Foreign Employment Tribunal. As a full-service law firm in Nepal, we run manpower work alongside related company registration, employment-law and dispute work in a single counsel relationship.

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Last reviewed: April 2026