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Employer of Record (EOR) in Nepal: 2023 Guide

VERDICT: The best Nepal EOR in 2023 is Horizons. With it’s deep expertise in hiring throughout Asia and the Himalayan region, Horizons will save you time and money in your hiring in Nepal. 

Key Takeaways

  • A Nepal EOR (Nepal Employer of Record) allows global companies to hire in Nepal quickly, and at low cost.  
  • A Nepal EOR can save you months of time in setting up an entity in Nepal. 
  • Our pick for the best Nepal EORs in 2023 are Horizons, Deel and Sanchaya

A Nepal Employer of Record (Nepal EOR) is a specialist HR company that hires and onboards employees for international companies, without the need to set up a local enity in Nepal. In this guide, learn how Nepal EORs work and who the best Nepal Employers of Record are in 2023. 

What is a Nepal EOR

An Employer of Record (EOR) in Nepal is a specialized business entity that provides comprehensive employment and human resources solutions to companies looking to establish a presence or conduct business in Nepal. EORs, similar to Nepal Professional Employer Organizations (PEOs), act as an official employer of a company’s workforce. Here’s a detailed breakdown of what a Nepal EOR does:

  • Acts As the Legal Employment Entity: When a foreign company wants to operate in Nepal, setting up a legal entity can be complex and time-consuming. An EOR simplifies this process by acting as the legal employer on behalf of the foreign company. This means that the EOR takes responsibility for hiring, payroll, taxes, benefits, and other employment-related tasks for the company’s local workforce.
  • Compliance Expertise: One of the significant advantages of using an EOR in Nepal is its in-depth knowledge of local labor laws and regulations. EORs are well-versed in Nepal’s employment laws, ensuring that businesses remain compliant with the country’s legal requirements. This expertise reduces the risk of non-compliance, legal issues, and penalties associated with employment matters.

  • Streamlined Market Entry: EORs offer a faster and more straightforward path for foreign businesses to enter the Nepali market. Instead of going through the lengthy process of setting up a legal entity, businesses can partner with an EOR to initiate operations promptly. This speed and simplicity can be particularly advantageous for short-term projects or market testing.

  • HR and Administrative Support: EORs offer a range of HR and administrative services, including recruitment, onboarding, employee management, payroll processing, benefits administration, and even assistance with visa and work permit applications for foreign employees. This comprehensive support allows foreign businesses to focus on their core operations while the EOR handles all employment-related tasks.

Best Nepal EOR Companies

Horizons

Horizons offers a full range of employment solutions in Nepal. They serve as the legal employer of record for a client’s local workforce in multiple countries, handling payroll, benefits, compliance with labor laws, visa assistance, and HR support. This allows businesses to expand internationally without the need for legal entities, streamlining global employment and ensuring compliance with local regulations. 

💡 Pricing starts at $299+ per employee per month. 

Deel

Deel is a global Employer of Record (EOR) and compliance platform that simplifies international employment. Deel acts as the legal employer for companies’ international teams, managing payroll, taxes, benefits, and compliance with local labor laws. This allows businesses to hire and pay employees in multiple countries without the complexities of setting up legal entities, ensuring seamless global expansion

💡 Pricing starts at $599+ per employee per month. 

Sanchaya Nepal

Sanchaya Nepal are an EOR and employment solutions headquartered in Nepal. They are one of the only Nepal EORs to offer a full range of outsourcing and HR solutions including permanent recruitment, contract staffing, payroll outsourcing, business process outsourcing and PEO services. 

Sanchaya Nepal are the ideal EOR for companies in need of a well-regarded local provider. 

💡 Pricing not available publicly. 

Nepal EOR Services

An Employer of Record (EOR) in Nepal is a specialized service provider that offers comprehensive employment solutions to businesses looking to establish a presence or conduct operations in Nepal. The primary function of a Nepal EOR is to serve as the legal employer on behalf of a foreign or domestic company, taking responsibility for all employment-related matters concerning the local workforce. Here’s a detailed breakdown of what a Nepal EOR does:

  • Payroll, tax and benefits: This means they handle crucial functions such as hiring, managing employment contracts, payroll processing, taxes, benefits administration, and compliance with Nepal’s labor laws and regulations. By assuming these responsibilities, the EOR simplifies the hiring process and ensures that the company remains in full compliance with local employment requirements.
  • Streamlined Market Entry: Partnering with a Nepal EOR allows foreign businesses to enter the Nepali market quickly and efficiently. Instead of navigating the complex process of setting up a legal entity, businesses can leverage the EOR’s existing infrastructure and expertise. This approach is particularly advantageous for short-term projects, market testing, or companies looking to establish a presence without a long-term commitment.
  • Risk Mitigation: An EOR in Nepal helps mitigate legal and financial risks associated with employment matters. They take on the legal obligations and responsibilities related to employment, reducing the exposure of the foreign or domestic company to potential disputes, legal issues, or penalties. This risk reduction is especially crucial when navigating the complexities of Nepal’s labor laws and regulations.

It’s important to note that the specific services offered by a Nepal EOR may vary among providers. Therefore, it’s crucial to co-ordinate with a potential EOR as to whether they will be able to support your company with its needs. 

Select a Nepal Employer of Record

Engaging a Nepal EOR usually means taking the following steps:

1. Identify your needsDetermine what you need for your Nepal-based team. Consider factors such as how many employees you plan to hire, and whether you need additional services such as recruitment from the EOR. 
2. Research EOR ProvidersConduct thorough research to work out which Nepal EOR is best for you. Look for companies with experience in Nepal hiring, a strong knowledge of local tax and labor regulations, and a proven track record with customers. 
3. Request QuotesContact the EORs of your choice and ask for a detailed quote on their services and pricing. 
4. Evaluate ProposalReview the proposals received the proposals from Nepal EORs and determine which one best lives up to their mission. 
5. Contract NegotiationOnce you have selected the Nepal EOR that best suits you, negotiate the contract. Pay close attention to service-level agreements, pricing, data protection, termination clauses, and confidentiality provisions in determining whether the contract is appropriate. 
8. Engage the EORBeing the partnership with the EOR and start onboarding new employees in Nepal.

Pro Tip: Remember that using a Nepal EOR involves a legal and contractual relationship, so it it may be worthwhile seeking legal advice before signing up to a contract. 

Benefits of a Nepal Employer of Record

Engaging a Nepal Employer of Record (EOR) can offer several benefits to international companies looking to hire in Nepal. Here are some key advantages:

  1. Fast Market Entry: EORs streamline the process of entering the Nepali market. They allow businesses to start operations quickly without the need to establish a legal entity, which can be time-consuming and complex.

  2. Compliance Assurance: EORs are well-versed in Nepal’s labor laws and regulations. They ensure that your business remains compliant with local employment requirements, reducing the risk of legal issues or penalties.

  3. Local Expertise: EORs have a deep understanding of the Nepali business environment. They can provide valuable insights and guidance on local practices, culture, and employment norms.

  4. Cost Efficiency: Outsourcing employment-related tasks to an EOR can be cost-effective. It eliminates the need to hire and maintain an in-house HR team and reduces administrative burdens.

  5. Risk Mitigation: EORs assume the legal and financial risks associated with employment in Nepal. They take on responsibilities such as employment contracts, payroll processing, and benefits administration, reducing your exposure to potential disputes or liabilities.

  6. Flexibility: EOR services are adaptable and can be used for short-term or long-term projects, making them suitable for various business needs and sizes.

  7. Focus on Core Operations: By entrusting employment-related tasks to an EOR, your business can concentrate on its core activities and strategic objectives, enhancing productivity and efficiency.

  8. Scalability: EORs offer scalability, allowing your business to adjust the size of your local workforce in Nepal as needed, whether you’re expanding or downsizing.

  9. Time Savings: EORs handle administrative tasks like payroll, benefits, and compliance, saving your business time and effort.

  10. Access to Local Talent: EORs can assist with local recruitment, helping your business find and hire qualified Nepali talent.

It’s important to note that the specific benefits may vary depending on the specific Nepal EOR that you choose to work with. For this reason, it is very important that you carefully check the terms of service that apply to any EOR relationship. 

Video: Build your Global Team with a Nepal Employer of Record

Disadvantages of a Nepal Employer of Record

Potential challenges of using a Nepal EOR include:

  1. Limited Availability: There are a limited number of established EORs in Nepal, which could restrict your options when selecting a provider. It’s essential to choose a reputable and experienced EOR to ensure reliable services.

  2. Bureaucratic Hurdles: Nepal’s bureaucratic processes can be time-consuming and challenging to navigate, even for EORs. Delays in obtaining permits or licenses can affect the speed of market entry.

  3. Cultural Differences: Understanding and navigating Nepali business culture and practices can be a challenge, even for experienced EORs. Effective communication and collaboration with local partners and employees may require cultural sensitivity and adaptation.

  4. Limited Services: Some EORs in Nepal may offer a limited range of services, focusing primarily on basic employment tasks. This may require businesses to handle additional administrative functions internally or seek supplementary services from other providers.

  5. Employee Recruitment and Retention: Finding and retaining qualified local talent in Nepal’s competitive job market can be challenging. EORs can assist with recruitment, but businesses may still face competition for skilled employees.

  6. Labor Market Regulations: Nepali labor laws can be stringent, with various rules regarding working hours, employee benefits, and termination procedures. EORs must stay updated on these regulations to ensure compliance.

  7. Infrastructure Challenges: Limited access to reliable infrastructure, such as electricity and transportation, can pose operational challenges for businesses and EORs, particularly in rural areas.

Most of these potential disadvantages of engaging a Nepal EOR can be mitigated by choosing the right provider. 

Nepal EOR Infographic

China Employer of Record Infographic

Engaging a Nepal EOR — Our Take

In considering whether to use a Nepal Employer of Record (EOR), it’s crucial to weigh the challenges alongside the benefits. While navigating Nepal’s business environment can present complexities, utilizing an EOR can significantly mitigate these challenges. EORs offer a reliable pathway to establish a presence in Nepal, ensuring compliance with local labor laws, reducing administrative burdens, and allowing businesses to concentrate on core operations. Ultimately, leveraging the expertise and support of a reputable Nepal EOR can be a strategic choice for businesses seeking to expand into this promising market while minimizing risks and optimizing efficiency.

Nepal and Asia Business Guides

Frequently Asked Questions

An Employer of Record (EOR) and a traditional staffing agency in Nepal serve distinct purposes. EORs primarily act as the legal employer of record for a company's local workforce, handling all employment-related tasks, compliance with labor laws, and payroll processing. They provide a comprehensive solution for businesses looking to establish a presence in Nepal without the need to set up a legal entity. In contrast, traditional staffing agencies focus on recruitment and placement services, assisting with finding and hiring employees but not assuming the responsibilities of the legal employer. Businesses should choose the service that aligns with their specific needs, whether it's a full EOR solution or recruitment assistance.

An EOR in Nepal is responsible for administering employee benefits and ensuring compliance with local tax regulations. They handle tasks such as setting up and managing employee benefit programs, processing payroll with appropriate tax deductions, and submitting required reports and payments to the local tax authorities. This includes compliance with income tax, social security contributions, and other statutory deductions. By entrusting these responsibilities to the EOR, businesses can ensure that employee benefits are administered correctly, and tax obligations are met in accordance with Nepali labor laws, reducing the risk of non-compliance and associated penalties.

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