How to verify a licensed Nepali recruiter, and avoid sub-agent fraud

A destination employer almost never signs directly with the person who will actually move its workers. It signs a Power of Attorney that authorises a Nepali agency to recruit, attest documents and file labour approvals on its behalf, and the quality of that one signature decides whether the corridor is clean or whether the employer's name ends up attached to a fraud case at the Foreign Employment Tribunal. Nepal had 1,019 active recruitment-agency licences as of 14 January 2025, per the Department of Foreign Employment (DOFE), with the Nepal Association of Foreign Employment Agencies (NAFEA) putting membership at roughly 1,041. The number that matters more is the other one: by mid-March of FY 2023/24, of 5,881 complaints filed with DOFE, 5,129 were against agents and middlemen and only 752 against licensed companies. The fraud is not mostly in the licensed tier. It is in the unlicensed layer beneath it, and the due diligence below is built to keep an employer out of that layer.

What a DOFE licence actually is

A recruitment licence in Nepal is not a registration formality. It is a capital commitment lodged with the state, set by the 2019 amendment to the Foreign Employment Act that took effect on 25 August 2019, and tiered by the volume of workers an agency moves each year. An agency cleared for 5,000 or more workers a year posts Rs 20 million in cash plus a Rs 40 million bank guarantee, Rs 60 million in total. The 3,000 to 5,000 band posts Rs 10 million cash plus Rs 30 million in guarantee. The smallest tier, up to 3,000 workers a year, posts Rs 5 million cash and a Rs 15 million guarantee, Rs 20 million in all.

That deposit is the point. It is the fund DOFE and the Foreign Employment Tribunal can draw against when a worker wins a claim, which is why a licensed agency has a financial reason to behave and an unlicensed middleman has none. When an employer contracts through someone who has posted no deposit, there is nothing for a tribunal to attach if the placement goes wrong. The licence also sits inside a wider statutory frame, the Foreign Employment Act 2064 (2007), which a buyer building its compliance file should already recognise from the ethical-recruitment and zero-cost requirements that the same Act underwrites.

How to verify a licence against DOFE records

The check itself is short, and it is the cheapest insurance an employer will buy on the whole corridor.

• Get the licence number, not just the name. A Nepali recruitment licence carries a number in a form such as 658/064/065, where the trailing pair are Bikram Sambat fiscal years. A name alone is not verification, because trade names get reused and imitated.
• Verify it at dofe.gov.np or in person. DOFE publishes licensed agencies, and the office at New Baneshwor, Kathmandu, will confirm a licence on request. Werklist's Kathmandu branch, which operates as Blusift Nepal and holds its own DOFE recruitment licence, walks files through the DOFE office at Maharajgunj every week, so an on-the-ground confirmation is a routine step rather than a special favour.
• Match the licence to the entity signing your Power of Attorney. The licensed company and the counterparty on your contract must be the same legal person. If the agency proposes that an introducer, a "coordinator" or a partner firm hold the Power of Attorney, the licence you verified is not the one doing the work.
• Check the deposit tier against your headcount. An agency licensed for up to 3,000 workers a year that promises to move several thousand on your order alone is over its own ceiling, which is a signal that part of the file will be sub-contracted out of sight.

A failure mode here is concrete. If the Power of Attorney is issued to the named licensed company but the demand letter is then handed to an unlicensed associate to "process," the labour approval can still be filed under the licensee, while the worker pays the associate. On paper the corridor looks licensed. In the FEIMS record and in any later complaint, it is not.

The sub-agent problem, named

The Nepali word is dalal, the informal middleman who finds workers in the districts, collects their money and feeds them to a licensed agency in Kathmandu. The March 2019 amendment to the Foreign Employment Act banned dalals outright, and the early effect was real: individual complaints fell from 440 in the first six months of FY 2018/19 to 246 in the comparable half of FY 2019/20, a drop of more than 44 percent. The ban did not end the practice, it pushed it underground. The mid-March FY 2023/24 figure says it plainly, 5,129 of 5,881 complaints aimed at agents and middlemen, because the dalal is where the worker fee comes back.

This is the mechanism a destination employer most needs to understand. A licensed agency on an employer-pays contract is supposed to charge the worker nothing. A dalal sitting between the worker and that agency charges the worker anyway, for the "introduction," for transport to Kathmandu, for help with the medical, and the worker arrives already in debt. Nepal's National Statistics Office Return Migration and Recruitment Cost Survey, completed in November 2023 with ILO support, found returning migrants had paid over NPR 100,000 on average and that fewer than 2 percent paid nothing. Most of that money does not move through the licensed company's books. It moves through the dalal layer, which is exactly the layer that vanishes when a tribunal asks who took the fee. The named failure mode for an employer is this: you signed a clean employer-pays contract with a licensed agency, the agency quietly relied on a dalal to fill the roster, the worker paid the dalal, and your "zero-cost" corridor is now a worker-paid one that an auditor can document.

Blacklists, complaints, and the Foreign Employment Tribunal

DOFE does not keep enforcement private, and the published record is a verification tool in its own right. Fraud complaints to DOFE rose roughly six-fold across recent years, from 1,255 in FY 2019/20 to 4,464 in FY 2022/23 and 15,904 in FY 2023/24. In FY 2024/25 DOFE logged 5,632 complaints with Rs 328.7 million in reported fraud. Recovery, though, is thin, only about 11 percent of court-won cases yield compensation, and in one accounting police recovered just Rs 1,204,500, which is the practical reason prevention beats remedy here.

DOFE names the accused publicly. A notice dated 4 April 2026 named 352 accused, with one case carrying more than 810 defendants, and a separate notice on 11 July recorded 584 manpower companies suspended. In a single fiscal year DOFE cancelled 80 licences, 196 cumulatively since FY 2009/10. Before signing, an employer should check that its prospective agency does not appear on a current suspension or cancellation notice, the same way it verified the licence in the first place.

Cases that escalate go to the Foreign Employment Tribunal, established around 2009 (2066 BS) and sitting at the District Court Complex in Kathmandu. The Tribunal handles cases over NPR 3 million (30 lakh) and appeals, and reported a 73.46 percent settlement rate in a recent year per Registrar Anandaraj Panta. The penalties under the Foreign Employment Act 2007 are not nominal: a fine of up to 50 percent of the defrauded sum, three to seven years of imprisonment, and travel-reimbursement liability of Rs 300,000 to Rs 500,000. For day-to-day complaints below the Tribunal threshold, the channels are Hello Sarkar (1111) and the Foreign Employment Call Centre (1141).

A 2026 backstop the employer should know about

From 4 June 2026 (19 Jestha 2083), repeat labour approval (पुनः श्रम स्वीकृति) is fully automated and auto-rejects any application that lacks passport validity of at least three months, a valid visa, a same-employer contract, Social Security Fund and Welfare Fund contributions, and active life insurance. This matters to a destination employer because it hardens the paper trail at the point of approval. A dalal who cuts corners on the contract or skips the welfare-fund and insurance contributions can no longer slide a renewal through, which narrows the room in which informal middlemen operate. It does not replace due diligence on the first signing, but it is a reason the licensed channel is becoming the only channel that clears at all.

The checklist before you sign a Power of Attorney

The same logic that governs which European corridors have signed worker protections governs which agency an employer should trust to run them, and the bilateral-agreement picture for Europe shows how thin the formal coverage still is, which puts more weight, not less, on choosing a licensed counterparty.

Werklist runs every file through the licensed channel from its Kathmandu branch, places the recruitment fee on the employer side so no dalal has a reason to charge the worker, and verifies each licence at the DOFE office at Maharajgunj as a matter of routine. An employer that wants its Nepal corridor checked against this list before it signs anything can send a brief to the Kathmandu branch via contact companies.