What the Act Requires
Quick answer — Foreign Employment Act 2064:
- Licence from the Department of Foreign Employment — no foreign employment business without one (s.10).
- Deposit (s.11(2)): NPR 30,00,000 in cash, or NPR 7,00,000 cash + a NPR 23,00,000 bank guarantee, plus the prescribed licence fee.
- The deposit is spendable — the government uses it to repatriate stranded workers, and you must reimburse within 15 days.
- It can be increased (s.11(4)) if it looks small relative to your transactions.
- Licence lasts one financial year (s.12), renewable — or three years at once by paying three years of fees.
- Non-renewal is a revocation ground (s.13).
The Deposit Is Not a Fee — and That Changes Everything
Most licensing regimes take money and keep it. This one takes money and spends it on your behalf when something goes wrong.
The mechanism sits in the Act. Where a worker needs to be brought home and the licensee fails to comply with the Department’s order to provide the money, the worker is brought back to Nepal by spending the deposit furnished under Section 11. The Department then notifies the licensee, who must reimburse that amount into the deposit no later than fifteen days of receiving the notice.
And if repatriation costs more than the deposit holds, Section 11 does not cap your exposure: the licensee pays the shortfall within the time the Department specifies, and failing that, the amount is recovered as if it were a government due — which is a materially stronger collection power than an ordinary commercial debt.
Read the business model consequence. Your NPR 30,00,000 is not parked capital you can forget about. It is a working fund that can be drawn down by events outside your control — an employer abroad collapsing, a placement going wrong — and that you are legally obliged to refill on a fifteen-day clock. An agency without liquid reserves behind the deposit is one bad placement from a licence problem.
Cash, or Cash Plus Guarantee?
Section 11(2) gives two ways to satisfy the deposit:
| Option | Cash | Bank guarantee |
|---|---|---|
| Full cash | NPR 30,00,000 | — |
| Cash plus guarantee | NPR 7,00,000 | NPR 23,00,000 |
The second route needs far less cash out of the business, which is why most agencies take it. But understand what the Act means by a bank guarantee here: it is expressly defined as one issued by a bank specified by the Department, under which the bank pays cash as and when the Department demands it. There is no dispute step and no negotiation — your bank pays, and then looks to you. Your bank will price that facility accordingly, and will want security for it.
The Deposit Can Grow With You
Section 11(4) lets the Department order an additional deposit where the existing one “appears to be insufficient in proportion to the transactions of the licensee”, and Section 11(5) allows that top-up to be given as a bank guarantee.
So the NPR 30,00,000 is a floor, not a ceiling. A successful agency placing many workers should plan for the requirement to rise rather than treating the opening deposit as a fixed, one-time cost of entry.
A Licence That Expires Every Financial Year
Section 12(1): the licence is valid for up to one financial year. Section 12(2) provides for renewal on the prescribed details and fees within the prescribed period, and a licensee may renew for three financial years at once by paying three years of renewal fees together.
Take the three-year option if cash allows. Section 13 makes failure to renew within the period a ground for revocation, and in a business where the licence is the asset, removing two annual opportunities to miss a deadline is cheap insurance.
Domestic Manpower Is a Completely Different Business
This is the distinction that costs people the most money, because the words are the same and the regimes are not.
- Sending workers abroad is foreign employment. Department of Foreign Employment licence, Section 11 deposit, annual renewal — everything above.
- Supplying staff to employers inside Nepal — security guards, housekeeping, cleaning crews, contract labour — is an ordinary service business. No DoFE licence. No deposit.
Security services carry their own approval: vetting and authorisation through the Ministry of Home Affairs and the District Administration Office, covering the guards themselves. That is a real process, but it is nothing like a NPR 30,00,000 deposit.
If your plan is domestic, say so clearly from day one — in your objectives, your name and your marketing. Agencies that describe themselves loosely as “manpower” while operating domestically invite questions they do not need, and agencies that drift into placing even a few workers abroad without a licence are carrying on foreign employment business without a licence, which Section 10 prohibits outright.
Step 1: Register the Company
Register a Pvt. Ltd. company at the OCR. The Act speaks of an “institution” applying for the licence, and in practice this is a company business: the deposit, the annual renewal, the compensation exposure and the Department’s scrutiny all sit far better on a company than on a firm with unlimited personal liability. Get your objectives right at incorporation — foreign employment is not an activity to bolt on by amendment later.
See the company registration guide for the incorporation process and costs.
Step 2: Arrange the Money Before Anything Else
The deposit is the critical path, not the paperwork. Talk to your bank early about the guarantee facility, understand what security they will want against it, and confirm the Department’s list of acceptable banks before you commit. Everything else — PAN, ward licence, office — is routine by comparison.
Step 3: Apply, Then Run It Properly
Applications go to the Department with the prescribed details and fee. Once licensed, the obligations that matter are the ones with money behind them: keep the deposit whole, reimburse within fifteen days of any notice, renew before the financial year turns, and respond to any Section 11(4) order to increase the deposit.
Not sure whether you need the foreign employment licence at all? If you are supplying staff inside Nepal, you almost certainly do not — and that answer is worth NPR 30,00,000. Tell us what you plan to do and we will tell you which regime you are in.
Which regime am I in?“UdhamSathi helped me build my company.” — UdhamSathi client
Quick Checklist
Decide first
- Abroad or domestic? It is the whole question.
- If abroad: can you fund NPR 30,00,000, and refill it on 15 days’ notice?
- If domestic: plan for MoHA / DAO approval for security work instead.
Setting up (foreign employment)
- Register the Pvt. Ltd. with correct objectives.
- Agree the bank guarantee facility with a Department-specified bank.
- Lodge the deposit and apply to the Department of Foreign Employment.
- Get the PAN and local business licence.
Running it
- Reimburse the deposit within 15 days of any notice.
- Renew before the financial year ends — consider the three-year renewal.
- Expect the deposit to be increased as your volume grows.
Frequently Asked Questions
How much deposit is required for a manpower agency licence?
Section 11(2): NPR 30,00,000 in cash, or NPR 7,00,000 cash plus a NPR 23,00,000 bank guarantee, plus the prescribed licence fee. The guarantee must come from a bank the Department specifies and must pay out on demand.
What is the deposit used for?
Bringing stranded workers home. If a licensee does not fund a worker’s return when ordered, the worker is repatriated out of the deposit, and the licensee must reimburse within 15 days. Any shortfall is recovered as a government due.
How long is the licence valid?
Up to one financial year (s.12), renewable on prescribed fees — or three financial years at once. Failure to renew is a revocation ground (s.13).
Do I need this licence to supply security guards inside Nepal?
No. Domestic supply is not foreign employment — no DoFE licence, no deposit. Security services need Ministry of Home Affairs / DAO approval and guard vetting instead.
Can the Department ask for more than NPR 30,00,000?
Yes — Section 11(4) allows an additional deposit where the existing one is insufficient in proportion to your transactions, and it may be given as a bank guarantee (s.11(5)).
About this guide. Provisions are quoted from the Foreign Employment Act, 2064 (2007), Sections 10 to 13, from the English text published by the ILO. Fees, prescribed details and procedural requirements sit in the Foreign Employment Rules and in Department practice, and both change — notably, reporting in 2082 indicated the annual minimum-worker requirement was removed by amendment. Confirm the current position with the Department before you commit funds.
Planning a Manpower or Recruitment Business?
We will tell you first whether you actually need the foreign employment licence — then handle the company registration, the deposit paperwork and the Department application if you do.
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