Foreign Employees: Labour Approval & Work Permit

Disclaimer:

Unofficial translation and educational summary. This publication is intended to reflect the relevant Nepali legislation and regulatory framework, including amendments and materials reviewed up to 1 September 2026. It is not a certified consolidated translation. If the English wording, section reference or summary differs from the official Nepali text or Nepal Gazette, the official Nepali text prevails.

At a Glance

Foreign employees working in Nepal are subject to specific labour authorization requirements under the Labour Act, 2074 and Labour Rules, 2075. These provisions regulate the employment of foreign nationals, work permits, employment contracts and repatriation of remuneration.

For employers, compliance involves more than obtaining a visa. It requires appropriate labour authorization, supporting documentation and coordination of employment, immigration and payroll requirements.

Why This Matters

Employing foreign nationals in Nepal involves separate labour authorization and immigration requirements. Employers must establish the applicable work-permit route, meet recruitment and documentation requirements, and ensure that employment conditions comply with Nepalese labour standards.

For HR teams, overlooking these requirements can expose the organization to regulatory action, employment disputes and immigration-related complications.

Major Provisions / Issues to Understand

1. General Prohibition on Employing a Foreign Citizen without a Work Permit (Labour Act, Section 22(1))

Under Section 22(1) of the Labour Act, 2074, employers are prohibited from employing foreign nationals without obtaining a work permit from the Department of Labour and Occupational Safety.

Foreign nationals must also hold appropriate immigration authorization to work legally in Nepal. A visa alone does not replace the required labour permit.Specific exceptions and alternative permit procedures are provided under Sections 23 and 24.

The Foreign Employment Act, 2064, which governs Nepali citizens seeking employment abroad, is a separate legal framework and should not be confused with the requirements applicable to foreign nationals working in Nepal.

2. Availability of Nepali Workers and Recruitment Requirements (Labour Act, Section 22(2)–(3))

Section 22(2) allows an employer to employ foreign skilled labour where the required skilled workforce cannot be supplied from among Nepali citizens.

Under Section 22(3), the employer must first advertise the vacancy in a national daily newspaper to seek suitable Nepali candidates. If no application is received from a Nepali citizen, or no suitable candidate can be selected, the employer may apply to the Department for a work permit, submitting supporting evidence of the recruitment process.

Employers should maintain the vacancy advertisement, applications received, candidate assessments and reasons for non-selection as supporting evidence.

3. Labour approval/permit documentation (Labour Act, Section 22(4); Labour Rules, 2075)

Under Section 22(4) of the Labour Act, 2074, the Department of Labour and Occupational Safety may issue a work permit after examining the employer's application and supporting evidence.

Rule 7 of the Labour Rules, 2075 prescribes the application procedure and documentation, including the foreign worker's passport, qualifications, recruitment evidence, employer tax-clearance records and a plan to develop Nepali workers' skills.

Employers should verify the applicable requirements and maintain complete documentation to support the approval process.

4. Special Provisions for Foreign-Invested Enterprises and Technical Personnel (Labour Act, Section 24) 

Section 24 of the Labour Act, 2074 provides special work-permit procedures for certain foreign nationals, including:

• Foreign-Invested or Foreign-Assisted Enterprises: Chief executives and the prescribed number of foreign workers employed by such enterprises.

• Short-term Technical Personnel: Foreign technicians visiting Nepal for up to three months for machinery repair, maintenance, installation of new technology, or similar unforeseen technical work.

These provisions establish special permit procedures rather than automatic exemptions from labour authorization.

Foreign-invested enterprises should also consider the applicable provisions of FITTA, 2075 (see Week 08).

5. Work Permit Duration and Renewal (Labour Rules, 2075, Rules 11–12)

Under Rule 11 of the Labour Rules, 2075, work permits may be granted for up to five years for highly skilled technical foreign workers and three years for other foreign workers, subject to applicable conditions and annual renewal requirements.

For expatriates employed in industries, non-tourist working visas are generally issued for one year at a time upon recommendation of the Department of Industry and Department of Labour.

Section 49(4) of the Industrial Enterprises Act, 2076 allows an additional appointment of up to two years for qualifying specialized foreign technical personnel, subject to required approvals.

Under Rule 12 of the Labour Rules, employers must apply for work permit extensions at least 30 days prior to the expiry date of the prior approval.

6. Employer or Role Changes

Foreign employees should work in accordance with the employer and employment details approved under their work permits.

In cases of transfer to another legal entity, secondment, or significant changes in job responsibilities, employers should confirm with the Department of Labour and Occupational Safety whether a fresh work permit or additional approval is required.

Employers should also review the corresponding working-visa requirements before implementing such changes.

7. Exit and cancellation

Upon termination or completion of a foreign employee's employment, employers should review the requirements for work permit cancellation and working-visa closure with the relevant authorities.

HR should coordinate the necessary formalities with the Department of Labour and Occupational Safety and Department of Immigration, and maintain appropriate records of the employee's departure.

8. Repatriation of Salary and Remuneration

Foreign nationals legally employed in Nepal may be eligible to transfer their salary savings abroad through authorized banks, subject to applicable Nepal Rastra Bank regulations, tax compliance and required documentation.

For foreign personnel employed in foreign-invested industries, Section 26(3) of FITTA, 2075 specifically provides for the repatriation of eligible salary savings after payment of applicable income tax.

Employer Should Know

• Obtain the required labour permit and working visa before employment begins.

• Follow applicable recruitment and approval procedures.

• Maintain employment contracts, recruitment evidence and permit records.

• Monitor work permit and visa expiry dates and initiate renewals on time.

• Ensure compliance with applicable labour, payroll and tax obligations.

• Verify approval requirements for changes in employment or termination.

Employee Should Know

• Ensure valid labour authorization and an appropriate working visa before starting employment.

• Understand the terms of the employment contract, including salary, benefits and working conditions.

• Monitor work permit and visa validity and coordinate renewals with the employer.

• Comply with applicable tax and immigration requirements.

• Retain copies of employment contracts, permits, payslips and tax records.

• Understand applicable rights regarding salary repatriation and employment termination.

Cross-Border Employment Considerations

Multinational companies, foreign-invested enterprises, INGOs and international organizations employing foreign nationals in Nepal must comply with applicable labour and immigration requirements.

Employers should also consider tax obligations, double taxation agreements, foreign-exchange regulations and sector-specific approvals.

An overseas employment contract or foreign-company authorization does not automatically permit a foreign national to work in Nepal.

HR Check — Evidence to Maintain

☐ Published vacancy advertisements and recruitment assessment records.

☐ Foreign employee's passport, qualifications and employment contract.

☐ Labour permit applications, approvals and renewal records.

☐ Working visa and immigration documentation.

☐ Payroll records, tax deductions and payment evidence.

☐ Skills-development and Nepali workforce replacement plans, where applicable.

☐ Employment termination and permit cancellation records, where applicable.

Myth vs Law

MYTH: “A valid business visa is sufficient for a foreign national to work in Nepal.”

LAW: A business visa does not automatically authorize employment. Foreign nationals must obtain the required labour authorization and appropriate immigration permission before commencing work, subject to applicable legal exceptions.

Practical Example

A manufacturing company in Nepal needs a foreign technical expert to install and operate specialized machinery because the required expertise is unavailable locally.

Before engaging the expert, the HR team must determine whether the assignment qualifies for the special work-permit procedure under Section 24 of the Labour Act, 2074, or requires the standard recruitment and approval process under Section 22.

The company must obtain the applicable labour authorization and immigration permission before the expert begins work.

FAQs

1. Can a foreign national work in Nepal on a business or tourist visa?

No. A business or tourist visa alone does not authorize employment. The required labour authorization and appropriate working visa must be obtained, subject to applicable legal exceptions.

2. Must employers advertise vacancies before hiring foreign workers?

Generally, yes. Section 22 of the Labour Act requires employers to seek suitable Nepali candidates before applying for foreign skilled workers, subject to statutory exceptions.

3. Do foreign technicians visiting Nepal for short assignments need work permits?

Section 24 provides a special work-permit procedure for qualifying technical assignments lasting up to three months. It is not an automatic exemption.

4. Can foreign employees renew their work permits?

Yes, subject to applicable eligibility conditions and duration limits. Under Rule 12 of the Labour Rules, employers must apply for extensions at least 30 days before expiry.

5. Can foreign employees transfer their salaries abroad?

Yes, qualifying foreign employees may repatriate eligible remuneration under Section 26 of the Labour Act, subject to applicable tax and Nepal Rastra Bank foreign-exchange requirements.

Definitions / Terminology

Labour Approval (श्रम स्वीकृति): Official authorization allowing a foreign national to undertake employment in Nepal under applicable labour laws.

Work Permit (श्रम इजाजतपत्र): A permit issued by the Department of Labour and Occupational Safety authorizing a foreign national to work in Nepal.

Working Visa (कार्य भिसा): Immigration authorization permitting a foreign national to stay in Nepal for approved employment.

Foreign Worker (विदेशी श्रमिक): A foreign national engaged in employment in Nepal, subject to applicable labour laws.

Salary Repatriation (पारिश्रमिक फिर्ता लैजाने): Transfer of eligible employment earnings from Nepal to another country in accordance with foreign-exchange regulations.

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