Visas and Work Permits for Foreign Directors in Nepal

Legal Framework for Foreign Directors in Nepal

Foreign nationals appointed as directors in Nepalese companies must comply with the Immigration Act, 2049 (1992) and the Foreign Investment and Technology Transfer Act, 2075 (2019). The Department of Immigration regulates visa issuance, while the Department of Industry manages work permits for foreign investors and directors. Foreign directors require both a valid visa and a work permit to legally perform their duties in Nepal.

The Companies Act, 2063 (2006) permits foreign nationals to serve as directors in Nepalese companies, subject to immigration and labor law compliance. The Industrial Enterprises Act, 2076 (2020) provides additional provisions for foreign personnel in registered industries. Foreign directors must maintain valid documentation throughout their tenure to avoid penalties under Section 23 of the Immigration Act.

Types of Visas Available for Foreign Directors

Business Visa

The business visa allows foreign nationals to conduct business activities, attend meetings, and explore investment opportunities in Nepal. This visa is issued under Section 10 of the Immigration Regulation, 2051 (1994) for periods ranging from 15 days to one year. Foreign directors typically obtain business visas for initial company registration and board meetings. The Department of Immigration issues business visas upon submission of an invitation letter from a registered Nepalese company.

Non-Tourist Visa

The non-tourist visa is specifically designed for foreign nationals engaged in business, employment, or investment activities in Nepal. This visa category is appropriate for foreign directors who will actively manage company operations. The non-tourist visa is issued for one year initially and can be renewed annually. Section 11 of the Immigration Regulation governs the issuance of non-tourist visas for business purposes.

Work Visa

Foreign directors performing executive functions require a work visa issued under the Immigration Act. The work visa is granted after obtaining approval from the Department of Labor and Employment Promotion. This visa type is mandatory for foreign directors receiving remuneration from Nepalese companies. The work visa validity corresponds with the approved work permit duration, typically issued for one to five years.

Work Permit Requirements for Foreign Directors

Legal Basis for Work Permits

The Foreign Employment Act, 2064 (2007) and Labor Act, 2074 (2017) establish the legal framework for foreign employment in Nepal. Section 12 of the Labor Act requires foreign nationals to obtain work permits before commencing employment. The Department of Labor and Employment Promotion issues work permits after verifying that the position cannot be filled by qualified Nepalese citizens. Foreign directors must demonstrate specialized skills or expertise justifying their appointment.

Eligibility Criteria

Foreign directors must meet specific qualifications to obtain work permits in Nepal. The company must be registered with the Office of Company Registrar and possess a valid tax clearance certificate. The foreign director must hold relevant educational qualifications and professional experience in their field. Companies must justify the necessity of hiring foreign directors by demonstrating the unavailability of qualified local candidates.

Document Requirements for Visa Applications

Foreign directors must submit comprehensive documentation for visa applications to the Department of Immigration. The following documents are mandatory:

• A valid passport with at least six months remaining validity from the intended date of entry into Nepal.
• Two recent passport-sized photographs with white background taken within the last six months.
• A completed visa application form signed by the applicant and verified by the sponsoring company.
• An official invitation letter from the registered Nepalese company on company letterhead with authorized signatures.
• A copy of the company registration certificate issued by the Office of Company Registrar.
• Board resolution appointing the foreign national as director, certified by the company secretary.
• Educational certificates and professional qualification documents with notarized translations if not in English.
• A police clearance certificate from the applicant’s country of residence issued within the last six months.
• Proof of financial capacity demonstrating ability to support oneself during the stay in Nepal.
• A detailed curriculum vitae outlining professional experience and qualifications relevant to the directorship position.

Work Permit Application Process

Step 1: Company Registration and Approval

The Nepalese company must first register with the Office of Company Registrar under the Companies Act, 2063 (2006). The company must obtain approval from the Department of Industry if operating in sectors requiring foreign investment clearance. The company submits an application to the Department of Labor requesting permission to hire a foreign director. This application must include justification for hiring a foreign national instead of a Nepalese citizen.

Step 2: Labor Department Approval

The Department of Labor and Employment Promotion reviews the application within 15 working days. The department verifies whether qualified Nepalese candidates are available for the position. Upon satisfaction, the department issues a recommendation letter for work permit approval. This recommendation is valid for 90 days from the date of issuance.

Step 3: Immigration Department Processing

The foreign director submits the work permit application to the Department of Immigration along with the Labor Department’s recommendation. The Immigration Department verifies all submitted documents and conducts background checks. The department issues a work visa upon approval, typically within 7 to 15 working days. The work visa is stamped in the applicant’s passport with specific validity dates and employment conditions.

Step 4: Work Permit Issuance

After receiving the work visa, the foreign director must register with the Department of Labor within 15 days of arrival. The department issues a formal work permit card containing the director’s photograph and employment details. This work permit must be carried at all times and presented to authorities upon request. The work permit specifies the employer, position, and duration of authorized employment.

Visa and Work Permit Fees

Document Type	Duration	Fee (NPR)	Processing Time
Business Visa	15 days	3,000	2–3 working days
Business Visa	30 days	5,000	2–3 working days
Business Visa	90 days	12,000	2–3 working days
Non-Tourist Visa	1 year	20,000	5–7 working days
Work Visa	1 year	25,000	7–15 working days
Work Permit	1 year	15,000	7–10 working days
Visa Extension	Per year	15,000	3–5 working days
Work Permit Renewal	Per year	10,000	5–7 working days

Renewal Procedures for Visas and Work Permits

Foreign directors must initiate renewal procedures at least 30 days before visa or work permit expiration. The renewal application requires submission of the original work permit, passport, and updated company documents. The Department of Immigration requires proof of tax compliance and continued employment with the sponsoring company. Renewal applications follow the same verification process as initial applications but typically process faster.

The company must submit an updated board resolution confirming the foreign director’s continued appointment. The Department of Labor reviews the renewal application to ensure ongoing necessity of foreign employment. Renewal fees must be paid at authorized banks before submission of renewal applications. Late renewal applications may incur penalties under Section 23 of the Immigration Act, ranging from NPR 1,000 to NPR 10,000 per day of overstay.

Restrictions and Limitations for Foreign Directors

Employment Restrictions

Foreign directors holding work permits are restricted to employment with the sponsoring company only. Section 15 of the Labor Act prohibits foreign workers from engaging in additional employment without separate authorization. Foreign directors cannot change employers without obtaining new work permit approval from the Department of Labor. Violation of employment restrictions may result in work permit cancellation and deportation.

Sector-Specific Limitations

Certain sectors restrict or prohibit foreign investment and employment under the Foreign Investment and Technology Transfer Act. Foreign directors cannot serve in companies operating in prohibited sectors listed in Schedule 1 of the Act. These sectors include small-scale industries, personal services, and certain retail businesses. The Industrial Enterprises Act requires special approval for foreign directors in strategic industries.

Ownership Requirements

Foreign directors in companies with foreign investment must comply with ownership restrictions under the Foreign Investment and Technology Transfer Act. The Act requires minimum investment thresholds for foreign investors in various sectors. Companies must maintain the prescribed ratio of foreign to local ownership throughout the foreign director’s tenure. Non-compliance may result in company deregistration and work permit cancellation.

Tax Obligations for Foreign Directors

Foreign directors residing in Nepal for more than 183 days in a fiscal year become tax residents under the Income Tax Act, 2058 (2002). Tax residents must pay income tax on their worldwide income at progressive rates ranging from 1% to 36%. Section 47 of the Income Tax Act requires employers to deduct tax at source from director remuneration. Foreign directors must obtain a Permanent Account Number (PAN) from the Inland Revenue Department within 30 days of appointment.

Non-resident foreign directors pay tax only on Nepal-source income at applicable rates. Director fees and meeting allowances are subject to 15% withholding tax under Section 88 of the Income Tax Act. Foreign directors must file annual income tax returns by Ashad end (mid-July) each year. Failure to comply with tax obligations may result in penalties and affect visa renewal applications.

Social Security and Insurance Requirements

The Contribution Based Social Security Act, 2074 (2017) mandates social security contributions for all employees in Nepal. Foreign directors employed by companies with more than 10 employees must register with the Social Security Fund. Employers must contribute 20% of the director’s basic salary, with 11% deducted from the employee. The Social Security Fund provides medical, accident, and dependent family benefits to registered foreign directors.

Foreign directors must obtain health insurance coverage as required by the Immigration Regulation. Insurance policies must provide minimum coverage of USD 50,000 for medical emergencies and repatriation. The Department of Immigration may request proof of insurance during visa applications and renewals. Companies often provide comprehensive insurance packages to foreign directors as part of employment contracts.

Compliance Requirements for Employing Companies

Companies employing foreign directors must maintain detailed employment records as required by the Labor Act. These records include employment contracts, work permit copies, visa documentation, and attendance registers. The Department of Labor conducts periodic inspections to verify compliance with foreign employment regulations. Companies must submit annual reports to the Department of Labor detailing foreign employee information.

Section 68 of the Labor Act requires companies to maintain a register of foreign employees accessible to labor inspectors. Companies must notify the Department of Labor within 7 days of any changes in foreign director employment status. Failure to maintain proper records may result in fines ranging from NPR 50,000 to NPR 200,000. Companies may also face suspension of authority to hire foreign nationals for repeated violations.

Penalties for Non-Compliance

The Immigration Act imposes strict penalties for visa and work permit violations. Section 23 prescribes imprisonment up to one year and fines up to NPR 100,000 for working without valid permits. Overstaying visas results in daily fines of NPR 3 per day for the first month and NPR 5 per day thereafter. The Department of Immigration maintains a blacklist of violators who may be banned from re-entering Nepal for specified periods.

Companies employing foreign directors without valid work permits face penalties under Section 69 of the Labor Act. Penalties include fines up to NPR 500,000 and potential business license suspension. The Department of Industry may cancel company registration for serious violations of foreign employment regulations. Foreign directors found in violation face deportation and potential bans on future entry to Nepal.

Special Provisions for SAARC Nationals

Citizens of South Asian Association for Regional Cooperation (SAARC) member countries receive preferential treatment under Nepal’s immigration policies. SAARC nationals can obtain visas on arrival at entry points without prior approval. The visa fee for SAARC nationals is significantly lower, with 30-day visas costing NPR 1,500. SAARC nationals can stay in Nepal for up to 150 days per calendar year on tourist visas.

However, SAARC nationals serving as directors must still obtain work permits from the Department of Labor. The Foreign Investment and Technology Transfer Act provides relaxed investment requirements for SAARC investors. Indian nationals enjoy additional privileges under the 1950 Treaty of Peace and Friendship, allowing unrestricted entry and residence. Despite these privileges, Indian nationals must obtain work permits for formal employment as directors.

Visa Extension Procedures

Foreign directors must apply for visa extensions at the Department of Immigration before current visa expiration. Extension applications require submission of the original passport, current visa copy, and extension fee payment receipt. The company must provide a letter requesting extension with justification for continued stay. The Department of Immigration processes extension applications within 3 to 5 working days.

Tourist visas can be extended for up to 150 days per calendar year in Nepal. Business and work visas can be extended annually subject to continued employment and work permit validity. Extension applications submitted after visa expiration incur late fees and potential penalties. Multiple overstays may result in blacklisting and future entry bans to Nepal.

Conversion Between Visa Categories

Foreign directors initially entering on tourist or business visas can convert to work visas after obtaining work permits. The conversion process requires submission of the work permit approval letter to the Department of Immigration. Applicants must pay the difference between visa categories plus applicable conversion fees. The Immigration Department processes conversion applications within 7 to 10 working days.

Conversion from tourist to work visa requires exit from Nepal and re-entry in some cases. The Department of Immigration may waive the exit requirement for foreign directors with approved work permits. All conversion applications must include updated company documents and board resolutions. Conversions are subject to the same scrutiny and verification as new visa applications.

Role of Immigration Consultants and Legal Advisors

Foreign directors often engage immigration consultants and legal advisors to manage visa and work permit processes. Licensed consultants assist with document preparation, application submission, and liaison with government departments. The Nepal Bar Council regulates legal practitioners providing immigration advisory services. Consultants charge fees ranging from NPR 50,000 to NPR 200,000 depending on service complexity.

Reputable consultants ensure compliance with all legal requirements and minimize processing delays. They provide guidance on optimal visa categories and work permit strategies for foreign directors. Legal advisors also assist with tax planning and corporate compliance matters. Companies should verify consultant credentials and licensing before engaging their services.

Recent Changes in Immigration Policies

The Government of Nepal implemented online visa application systems in 2023 to streamline immigration processes. Foreign nationals can now apply for visas through the Department of Immigration’s online portal. The online system reduces processing times and provides application tracking facilities. However, work permit applications still require physical submission to the Department of Labor.

The COVID-19 pandemic led to temporary relaxations in visa extension and renewal procedures. The government extended visa validity automatically for foreign nationals unable to leave Nepal during lockdowns. These temporary measures have largely been discontinued as normal operations resumed. The Department of Immigration continues to update policies to facilitate legitimate foreign investment and employment.