Employment of Foreigners

Every year Nepal labor market has to face 500,000 new job seekers. But the economy at present is unable to provide jobs and unemployment is more and more aggravated. In the declining trend of economic activities within the country, only option is the foreign employment and migration of the people. Thus Nepal is facing a situation-forced migration of workers in a mass scale. Conflict has created a situation of heavy displacement of workers and their families which has resulted into internal and international migration of the people. People are forced to migrate from their origin places to different places. But in the big multinational company’s foreigner are working as there are the different laws for the guidance of it. Similarly, same is the condition in the very informal sector as well where no any guidance is concentrated from the government side to date or if concentrated that is worthy of criticism.

More interestingly, the penetration of foreigners because of the porous border between Nepal and India is also reportedly noticed since long back. For an average Nepali, it is the heavy presence of foreign workers in the informal sector—carpentry, tailoring, plumbing, wiring, construction, you name it—that is robbing them of potential livelihood alternatives far more attractive than toiling in the Middle East or Malaysia.

The Ministry of Labor and Transport Management recently expressed serious concern over the increasing tendency of organizations to recruit foreigners without obtaining work permits from the Department of Labor (DoL). Indeed, Nepali citizens are being bypassed in favor of foreigners—from telecommunications companies to manufacturing firms to hydropower projects, including those with foreign investment.

The Labor act 2074 also prohibits Non-Nepalese citizen to be engaged at work in any of the posts which is the same as per the previous act. The New Labor Act continues the general terms of hiring of foreign nationals by a local entity that the foreign nationals can only be hired if the Nepalese citizen could not be available for any skilled technical post even after publishing an advertisement in the national level public newspapers and journals.

Foreign nationals need to obtain the work permit for being engaged in the work in Nepal as per sec 22 and 23 of the Labor Act, 2074 except in the following conditions:


• Foreign nationals who are provided diplomatic immunity.

• The arrangement as per treaty or agreement with the Government of Nepal.

Domestic Laws for the Employment of Foreign Nationals

The relevant Acts are the Nepal Petroleum Act 2040, the Industrial Enterprises Act 1992 and the Labor Act 1992, which, despite some contradictory provisions, allow recruitment of foreign workers only under strict conditions.

2.2.1 Nepal Petroleum Act, 2040 (1983)

Section 16: Subject to prior approval of the Department, foreign nationals may be employed in the conduct of Petroleum Operations if qualified and skilled Nepalese nationals are not available.

2.2.2 The Industrial Enterprises Act, 1992

Section 22: Industrial Manpower

The manpower required for any industry shall have to be recruited from among Nepali citizens.

  1. Notwithstanding anything contained in sub-section (1) above, if any industry cannot be operated without person living outside his own country expatriate manpower, foreign nationals may be appointed in such industry with the prior approval of the Department of Labor for a maximum period of five years. If a person so appointed happens to be a technician of a special category but not available within Nepal, such person may, with the approval of the Department of Labor, be appointed for up to an additional period of five years.
  2. A foreign national who is working in any industry pursuant to sub-section (2) above and who is from a country wherein convertible foreign currency is in circulation, may repatriate his salaries, allowances, emoluments, etc. in convertible foreign currency in an amount not exceeding seventy-five percent of such salaries, allowances and emoluments.

It requires “manpower” to be recruited from among Nepali citizens. It allows appointment of foreign manpower only if the industry cannot be operated without it, that too only with the prior approval of the DoL for a maximum period of five years. In the case the foreigner in question happens to be a technician of a special category but not available within Nepal, s/he may be appointed for up to an additional period of five years with the approval of the DoL.

The use of the word “manpower” in the Industrial Enterprises Act may raise questions about the provision’s coverage of labor categories. By contrast, the Labor Act covers both “employees” and “workers” in all enterprises employing 10 or more people, tea estates, and enterprises operating within industrial districts regardless of the number of people employed.