There are 5 Companies in Nepal
that provide Due Diligence Services!

The IT sector in Nepal is an emerging area of the country. It is one of the priorities for the Nepalese government. This country is specialized in web and mobile apps development, they have a lot of new startups but also big companies like Verisk, Leapfrog, or Brain Digit IT Solutions, and of course, many of the companies in Nepal are providing services for other companies in Europe, America and other countries of Asia. Also, the government of this country identified the high demand for IT students and professionals from other developed countries and they started offering different opportunities for being able to become an IT professional. In order to achieve these requirements, many institutions, universities, and colleges are providing various courses and degrees, for example, BCA, CSIT, or BSc.

Right now a big challenge for the industry is the high competition that is going on in the sector, which is growing very fast, especially because right now a company can hire employees from every part of the world and that makes the level required to keep growing.

The IT industry in Nepal has more potential but due to the lack of laws in relation to IT topics, it’s a bit stalled in some sectors like e-commerce, online transactions, and cyber law.

Why should somebody work with Nepalese Companies?

Some of the best advantages that this country has are the following, low cost, affordable workers, and high profitability, and this is because according to the Ministry of Labour, Employment and Social Security, there’s a minimum wage of 21378NPR a month since 17 July 2019, and that’s 150.11€, which stands out when looking for outsourcing services or products to another country for being a really strong point when choosing which country you should work with.

Another strong point of Nepal is the accessible bureaucracy and their high education in IT topics such as mobile app development, data science, or web development as the most important ones. The number of people interested in IT in this country is growing year after year because of the popularity and the job opportunities that can be found in this sector, in Nepal, and outside of Nepal. Some of the best universities and institutions to learn this discipline are Nepal Engineering College, Kathmandu University, or Himalaya Engineering College. Each year approximately 5000 students graduate from Nepalese universities in the IT sector.

Business Process Outsourcing (BPO) in Nepal is very popular and they are providing these services all over the world, but especially in European countries like Germany, The Netherlands, or France. And of course, the ICT Policy from 2015 has a special and separate section focused on the delivery and good use of ICT. Some of the political sectors that are involved in the law creation in relation to the ICT BPO are the Ministry of Information and Communication, the Ministry of Science, Technology, and Environment, the Nepal Telecommunication Authority, and the Department of Information Technology of the government.

What somebody should be aware of when working with IT companies from Nepal?

Nepal is well-known for being a low-cost destination for Outsourcing projects, and this country has some interesting data about professionals graduating each year in IT topics in the universities of Nepal, but there’s not a majority of professionals that went through this educational background and that can also lead to finding a lot of non-professional workers in Nepal, due to the difficulties to be able to study properly or the difficulties for almost the 25% of the population that are living with 50 cents of Euro a day. This can cause many people who are not well prepared to try to find their career in this sector that looks highly successful and profitable but without the bases that support the knowledge required to develop and outsource software, services, or apps.

Also, it is important to say that Nepal, being outside of the European Union, doesn’t have to comply with the laws and agreements that are currently being used in the countries that are part of the EU. This is important because the quality standards may not always be similar between the country of origin and destination during the Outsourcing process. Also, there are cultural aspects such as the possibility of finding companies and workers with a low level of English which can be dangerous for the relationship between the two parts in terms of the goals and the way to achieve them.

There are also some aspects in relation to the laws and agreements that are currently being used in Nepal that can be dangerous, and this is the lack of laws in some aspects such as e-commerce, e-transactions, or cyber-crime laws.

The poverty levels in this country are an important factor to take in account, and this can lead to companies trying to sell the BPO services but not being able to achieve the expected standards of quality required by some countries in the most developed countries. This doesn’t mean that Nepal is a country of low-quality BPO companies, but it’s more possible to find them than in other places due to some of their socio-economic problems.

The last thing that is important to talk about is the stability of the country, Nepal is a country that is affected by some natural disasters more often than it is desirable. In fact, it is a very vulnerable country when talking about natural disasters such as earthquakes, floods, landslides, and Avalanches due to its high mountains and altitude. This in addition to the socio-economic situation is two very important things to take into account when working with Nepalese companies, because the instability can be more frequent than it is desirable.

How reliable are IT companies from Nepal?

Continuing with the previous point, there are Nepalese companies that are very reliable but also others that can be not so reliable due to some specific situations and characteristics of this country such as poverty. Nepal is one of the poorest and least developed countries in some aspects, so you can find services offered that don’t correspond to the quality required due to the difficult situation of some people.

Also, there’s an important trend in the IT sector in Nepal which is about cybercrimes and lack of systems security. It's popular to have one ethical hacker in a company because it’s popular to hack public and private websites and companies need to avoid this, which is a problem for Nepal’s IT industry.

Also, lack of awareness of cybercrimes in business firms and brands is a big concern nowadays. And this is related to the lack of cybercrimes law which can also affect Nepalese company’s reliability.

As in past articles about the IT industry reliability in other countries, you should always work with companies of proven quality and experience to avoid scams as much as possible. There’s always a risk when outsourcing services to another country but with Nepal this risk is more notorious than with other european countries due to the difficult situations that we talked about in this section.

How is the IT industry from Nepal in relation to the neighboring regions/countries?

Nepal is over India and under China, which are two powerful countries in terms of IT/ICT industry, especially China which has the ICT market widely established in their country as they are the home country of brands like Huawei, Xiaomi, or Honor. China, is the second-largest ICT market and in the year 2017 the sector’s production outperformed the country’s GDP with technologies like Big Data, IoT, or AI (Artificial Intelligence), their project is to reach 8.1$ trillion dollars representing 55% of China’s GDP, and this is also because in this country they have their own phone brands, social media apps and networks, and of course one of the biggest competition centers for making the best hardware and software for their products.

On the other hand, India is a well-known and number 1 BPO destination country, with a very strong industry, well-educated professionals, and low costs for companies. Also, living costs in India, rents, and profitability really stand out for their price-quality when compared to Nepal, and this is one reason why many Nepalese qualified workers choose to go and develop their career in this country, both are very powerful competitors.

Conclusion.

Nepal can be a good outsourcing destination for some companies that put the low prices first and the quality or the stability in second place, even when you can find very good prepared professionals and companies. Some aspects of the law and agreements, related to cybersecurity and cyber crimes are also a big weak point. The strong points are low costs, high profitability, a good amount of graduated students in IT-related fields every year. Taking these aspects into account, we can conclude that Nepal can be a good Outsourcing for their production prices but it’s not very good in other aspects such as law, protection for the company who wants to outsource their services, this can be beneficial for companies looking to reduce their costs at the maximum.

Due diligence services are like thorough investigations that help businesses make informed decisions. They assess risks and opportunities when entering into partnerships, acquisitions, or other critical business transactions.

Many IT companies offer due diligence services, specializing in analyzing technology, data security, and compliance aspects of potential business ventures. Notable IT companies providing due diligence services include Deloitte, KPMG, and Ernst & Young (EY).

Due diligence service providers use a combination of tools and technologies to assess various aspects of a business. These may include data analytics platforms, cybersecurity tools, compliance management software, and financial modeling software. They also leverage document management systems and communication tools for efficient collaboration during due diligence processes.

Due diligence and audit services share similarities in their examination of the financial and operational aspects of a business. However, they differ in scope and purpose. Due diligence is typically conducted before entering into a business transaction to evaluate the potential risks and rewards. In contrast, audit services are often part of ongoing financial reporting and compliance requirements within a business.

Due diligence services are closely related to other advisory and consulting services, including:

• Financial Advisory: Providing financial insights and recommendations.

• Cybersecurity Assessment: Evaluating a company's cybersecurity posture.

• Mergers and Acquisitions (M&A) Consulting: Assisting in the strategic aspects of M&A transactions.

• Compliance Consulting: Ensuring adherence to industry regulations and standards.

Selecting the best IT company for due diligence services requires evaluating their expertise, industry knowledge, track record, and the comprehensiveness of their due diligence process. Seek providers who can tailor their services to your specific industry and transaction type.

Due diligence service providers are essential for various projects, including:

• Mergers and Acquisitions: Evaluating the financial health and potential risks of target companies.

• Investment Assessments: Analyzing potential investments in startups or new ventures.

• Partnership Agreements: Assessing the suitability and risks of partnering with another organization.

• Regulatory Compliance: Ensuring adherence to data protection and industry-specific regulations.

Conducting due diligence is essential for businesses of all sizes and industries. Some examples include private equity firms, which need to assess potential investments and portfolio companies; startups, which must evaluate the feasibility and risks of new business ventures; large corporations, which conduct due diligence on acquisitions and strategic partnerships; and financial institutions, who ensure compliance and risk management in lending and investments.

The cost of due diligence services can vary significantly based on the scope and complexity of the project. Factors such as the size of the target company, industry regulations, and the depth of analysis required influence the price. In the US, costs can range from a few thousand dollars to millions for complex M&A transactions. UK and Australian costs can be similar but may also vary depending on regional factors and the specific nature of the project. It's advisable to obtain quotes and assess the value provided by service providers before proceeding with due diligence.