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Employer of Record Nepal
Hire staff and expand your business in Nepal with our fully-managed EOR Service
How we can help
Unrivalled Employer of Record Service in Nepal designed to expand your business seamlessly
Agility EOR delivers services for business’s looking for an Employer of Record in Nepal. We help clients hire new employees or transfer existing employees into a fully-managed EOR service.
We appreciate that each situation and business is different. That is why our personal approach to Employer of Record Services in Nepal takes care of all HR, payroll, recruitment and compliance head aches, and allows you to do what you love best – driving your business forward.
Employer of Record in Nepal
A Brief Guide to Nepal
Set amongst the dramatic peaks and tranquil valleys of the Himalayas, Nepal is an evocative fusion of breathtaking landscapes, vibrant culture, and rich history. With a reputation for unparalleled natural beauty and a diverse, friendly populace, it’s no wonder that the allure of Nepal is irresistible to both adventurous individuals and enterprising businesses.
Category | Information |
Location | South Asia |
Capital City | Kathmandu |
Official Languages | Nepali |
Area | 147,516 square kilometers |
Population | Approx. 30 million |
Currency | Nepalese Rupee (NPR) |
Major Cities | Kathmandu, Pokhara, Lalitpur |
GDP | Approx. $30 billion (USD) |
Major Industries | Agriculture, Tourism, Textiles |
Business Culture
Business Culture in Nepal
Business in Nepal is characterized by its blend of the country’s deep-seated traditions with the evolving needs of a growing economy. Expect professional relationships to be grounded in personal connections, trust, and respect. Hierarchies are respected, and elders or seniors are treated with a high degree of deference. Business meetings are often relaxed and may start and end with some casual conversation. The exchange of business cards is customary, and it’s important to remember to use both hands to give and receive. As a largely collectivist society, decision-making can be a slow process, involving all levels of the organization. Patience, humility, and a willingness to negotiate are often rewarded.
Payroll and Taxes
Payroll and Taxes in Nepal
In Nepal, the payment of a 13th month salary is mandatory for all employees who have worked for the company for 6 months or more.
Employee Taxation
In Nepal, income tax rates are progressive, with higher income levels subject to higher tax rates.
Taxable Income (NPR) |
| |
Single People | Couples | Tax Rate |
0 – 500,000 | 0 – 600,000 | 1% |
500,001 – 700,000 | 600,001 – 800,000 | 10% |
700,001 – 1,000,000 | 800,001 – 1,100,000 | 20% |
1,000,001 – 2,000,000 | 1,100,001 – 2,000,000 | 30% |
2,000,001 – 5,000,000 | 36% | |
5,000,001 + | 39% | |
Employer Taxation
Employers in Nepal are also responsible for contributions towards a social security fund. This amount is set at 20% of the employer’s payroll costs.
Pension and Healthcare
Nepal Pensions
In Nepal, the formal pension system is principally managed by the Citizen Investment Trust and Employees Provident Fund. The system is contributory, with both employees and employers providing funds that are then invested across various sectors. In addition, the government offers non-contributory, tax-financed old age allowances to citizens aged 70 and above. It is important to note that the system is primarily focused on formal sectors, leaving a significant portion of the workforce, such as those in the informal sector or self-employed, without a formal pension. Efforts are underway to expand coverage, and the pension landscape continues to evolve in line with the country’s economic development.
Healthcare in Nepal
The healthcare system in Nepal is a blend of public and private services. The government operates a basic public healthcare system, funded by taxes and contributions from international donors. This system is designed to provide essential health services free of charge, although the availability and quality of care can vary, particularly in rural areas.
In urban areas, there is a growing private healthcare sector, which provides a broader range of services, often of higher quality, but at a cost. Many people, particularly middle and upper-class citizens, opt to use private healthcare for non-essential and specialist treatments.
While healthcare access has improved significantly over the last few decades, challenges persist, particularly around quality and accessibility for more remote or disadvantaged populations. The terrain makes transportation and accessibility challenging, but the government and several NGOs are actively working to address these issues, investing in infrastructure and telemedicine capabilities. Healthcare is a rapidly evolving sector in Nepal, with increasing opportunities for those with an eye for international business expansion.
Employment Law
Employment Law in Nepal
Relevant Legislation: Nepal’s employment landscape is primarily governed by the Labour Act, 2017, and the Social Security Act, 2018. These legislative pieces encompass a wide range of employment aspects, including work conditions, wages, social security, and dispute resolution mechanisms.
Employment Contracts: Employment contracts in Nepal are traditionally written and must include specifics such as work descriptions, location, duration, remuneration, and leave provisions. The contracts are subject to Nepal’s prevailing labor laws and can be either fixed-term or indefinite.
Working Hours: The standard working week in Nepal is 48 hours, typically spread over 6 days, with a cap of 8 hours per day. Employers are required to provide a rest interval after 5 hours of work.
Leave: Mandatory leave requirements in Nepal include annual leave (1 day for every 20 days worked), sick leave (up to half a month per year), and maternity leave (98 days). Public holidays also count towards paid leave.
Overtime: Any work done beyond the standard working hours is considered overtime. Legal limits restrict overtime to 4 hours per day and 20 hours per week. Overtime is compensated at the rate of one and a half times the regular hourly wage.
Termination: An employer can terminate an employee based on misconduct, incompetence, or prolonged absence without notification. The termination process usually involves written notice, a chance for the employee to defend themselves, and potential involvement of a Labor Office in disputes.
Notice: The notice period in Nepal varies with the duration of service. For employees with less than 3 years of service, a 30-day notice or pay in lieu is required. For those with over 3 years of service, a 60-day notice or equivalent pay is mandatory.
Severance Pay: Upon termination, employers are required to provide severance pay, which varies based on years of service. For each completed year of service, an employee receives a month’s worth of salary.
IMMIGRATION
Work Permits in Nepal
Administering the process of immigration in Nepal is the Department of Immigration, which falls under the umbrella of the Ministry of Home Affairs. This body is responsible for granting permissions to foreigners intending to visit, reside, or work in the country.
The first step towards immigration into Nepal begins in one’s home country at a Nepalese Embassy or Consulate, where prospective immigrants apply for the appropriate visa type. Business and employment visas are common for those intending to work in Nepal. Some of these include:
The Business Visa, intended for foreign investors, business owners, and high-level executives, requires a recommendation letter from the Department of Industry or an equivalent government authority. This visa can be issued for up to one year but can be extended while in Nepal.
The Employment Visa is tailored for foreign workers with confirmed employment in Nepal. A work permit from Nepal’s Department of Labor or the Department of Labor and Employment Promotion, along with an offer of employment or contract from a Nepalese company, forms part of the essential requirements. These visas are valid for a year or the duration of the contract and can be extended.
In addition, for those engaged in non-governmental organizations (NGOs) or international non-governmental organizations (INGOs), a Non-Tourist Visa might be the most appropriate. The holder is permitted to engage in the work defined by their organization during their stay in Nepal.
The immigration system in Nepal is rigorous and methodical, and rules are strictly enforced. It’s also worth noting that the country does not have a visa-on-arrival scheme for work purposes. All visas and work permits must be secured before arrival. It is always recommended to seek professional advice or services to navigate the complexities of the immigration process.
Public Holidays
Nepal Public Holidays
Holiday | Date |
New Year’s Day | January 1 |
Martyrs’ Day | February 1 |
Democracy Day | February 19 |
Holi | March (varies) |
Labour Day | May 1 |
Buddha Jayanti | May (varies) |
Republic Day | May 29 |
Constitution Day | September 20 |
Dashain Festival | October (varies) |
Tihar Festival | November (varies) |
Birthday of King Prithvi Jayanti | December 11 |
Christmas Day | December 25 |
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The Benefits
Nepal Employer of Record Benefits
When you choose Agility EOR to expand in Nepal, we guarantee an Employer of Record Service tailored to the needs of your business
Compliance
We are on top of regulatory changes in Nepal so you can relax.
Cost reduction
Allow our economies of scale to work in your favour.
High Service Levels
You and your employees have a dedicated account manager.
Fixed Cost Pricing
We will agree our professional fees up front based on your needs - no nasty surprises!
Consolidated Invoicing & Payments
Make one monthly payment to cover all your tax, social and wages costs from one to one thousand employees.
Fast delivery
You can have 'boots on the ground' within days on our infrastructure.
Reduced Risk
All wage taxes are remitted in full to the Nepalese authorities by professionals ensuring liabilities are met, giving you peace of mind.
Supply Chain Transparency
We only pay employees through local full employed solutions meaning Nepal payroll tax is paid on all funds.
Save Time and Money
Our expertise is at your disposal. The need for you to have internal HR, Payroll and admin staff is eliminated.