Expand your business into Nepal with or without a local entity
The sizable Asian nation of Nepal has struggled economically throughout the 20th and 21st Centuries. However, many foreign investors see it as a high-potential area for growth, and the country has undoubtedly advanced significantly in recent decades.
If you are planning an expansion into Nepal, it is important to understand that the country still has many inefficiencies and it can take time to make serious progress. Organizations must follow a range of strict criteria and comply with complex legislation, navigate the language barrier, and be prepared to encounter delays. These factors can be very time-consuming and potentially cause a loss of revenue.
A popular way of bypassing the complex administrative procedures in Nepal is to outsource the legwork to a global professional employer organization (PEO). At New Horizons, our comprehensive PEO, employer of record, and payroll services are designed specifically to help businesses of all kinds expand abroad faster and more efficiently, including into Nepal.
Additionally, our dedicated in-house recruitment team can find, hire, and onboard your new employees in Nepal, as well as manage any ongoing HR and compliance administration. Our dedicated team will provide everything you need to expand into Nepal as efficiently as possible and could drastically cut your expansion costs.
Our Nepal PEO simplifies your expansion
New Horizons enables your business to expand its operations into Nepal – without setting up a legal subsidiary.
Hiring in Nepal: Employment law overview
Nepal employment contracts
Employers in Nepal should always provide a written employment contract for every employee. Employment contracts should contain any important details such as working hours, entitlements, salary/wage, and more. They should also be written in Nepali and use the local currency of the Nepalese rupee.
Working hours in Nepal
The standard working week in Nepal is 48 hours spread across six days, with Saturdays commonly given as a rest day. Overtime rates are generally 1.5x normal pay and workers should never work more than 24 hours of overtime in a single week.
Public holidays in Nepal
Nepal celebrates a number of major public holidays throughout the year. The following are commonly celebrated and most employees receive them as leave from work, but there may be several other days in some areas:
- Basanta Panchami
- Maha Shivaratri (Shiva’s Birthday)
- Prithvi Narayan Shah’s Birthday
- Bisket Jatra (Nepali New Year)
- Janai Purnima Teej (Festival of Women)
- Constitution Day
- Indra Jatra (Indra Festival)
- Tihar (Divali)
Vacation in Nepal
Employees in Nepal are entitled to one day of paid vacation leave for every 20 days of work they complete. Additionally, workers can take up to 13 days of compassionate leave for the death of a loved one.
Sick leave in Nepal
Upon provision of a medical note, employees in Nepal can take up to 15 days of paid sick leave per year.
Maternity and paternity leave in Nepal
Female employees in Nepal are entitled to 98 days of paid maternity leave. Of this allowance, 60 days are compensated at full pay. Male employees can take up to 15 days of paid paternity leave.
Employee severance and terminations in Nepal
The usual notice period for employee termination in Nepal is 30 days, as long as the worker has been with their employer for more than one year. Additionally, severance payments of one month of normal salary are common.
Probation periods are limited to six months.
Taxation in Nepal
In Nepal, both employers and employees must contribute to the country’s provident fund, paying 10% of salaries into this fund.
Income tax in Nepal is progressive, and rates of between 1% and 36% apply depending on income level.
The corporate tax rate in Nepal is 25% for most companies.
Health insurance in Nepal
Nepal has state-funded public healthcare, so employers do not need to provide private medical insurance. However, some may choose to, particularly for employees in senior roles.
Nepal compensations & benefits
Compensation laws in Nepal
The legal minimum wage in Nepal is set at 13,450 rupees per month as of 2019.
Benefit management in Nepal
Organizing a Nepal benefits system for your employees can be a long and difficult process as a foreign company. You should be prepared to spend a significant amount of time setting up the system and keeping it compliant, which can cause delays in the hiring process.
New Horizons can help to significantly simplify this step of your Nepal expansion by providing benefit management outsourcing. Our team can advise you and handle the setup of your benefit scheme, enabling you to focus on expanding your organization in Nepal.
How can New Horizons help you expand into Nepal?
New Horizons’ Nepal employer of record, PEO, and payroll outsourcing services provide your organization with everything necessary to start trading in Nepal as quickly as possible and in full compliance with local regulations. Our experienced team will ensure that you are set up and trading in Nepal in as little as 48 hours, and could save you more than 80% in expenditure, even if you haven’t established an entity in Nepal.
Our team will handle all of your expenses, payroll, legal compliance, and more in Nepal, as well as any ongoing human resources work. And as the only global PEO with a dedicated in-house recruitment team, we can also find and hire your local workforce in Nepal, using our Nepalese subsidiary as employer of record for your employees so you don’t even need to register a Nepalese entity.
Talk to our Nepal experts today to find out how our custom outsourcing services can help you to seamlessly expand into Nepal