diff --git a/erpnext/setup/doctype/holiday_list/holiday_list.js b/erpnext/setup/doctype/holiday_list/holiday_list.js
index dc4cd9fd1125..8df49e158195 100644
--- a/erpnext/setup/doctype/holiday_list/holiday_list.js
+++ b/erpnext/setup/doctype/holiday_list/holiday_list.js
@@ -8,8 +8,12 @@ frappe.ui.form.on("Holiday List", {
 		}
 
 		frm.call("get_supported_countries").then(r => {
-			frm.subdivisions_by_country = r.message;
-			frm.set_df_property("country", "options", Object.keys(r.message));
+			frm.subdivisions_by_country = r.message.subdivisions_by_country;
+			frm.set_df_property(
+				"country",
+				"options",
+				r.message.countries.sort((a, b) => a.label.localeCompare(b.label))
+			);
 
 			if (frm.doc.country) {
 				frm.trigger("set_subdivisions");
@@ -31,7 +35,7 @@ frappe.ui.form.on("Holiday List", {
 	},
 	set_subdivisions: function(frm) {
 		const subdivisions = frm.subdivisions_by_country[frm.doc.country];
-		if (subdivisions.length > 0) {
+		if (subdivisions && subdivisions.length > 0) {
 			frm.set_df_property("subdivision", "options", frm.subdivisions_by_country[frm.doc.country]);
 			frm.set_df_property("subdivision", "hidden", 0);
 		} else {
diff --git a/erpnext/setup/doctype/holiday_list/holiday_list.json b/erpnext/setup/doctype/holiday_list/holiday_list.json
index 2d24db28c8b5..e9b848fdf54f 100644
--- a/erpnext/setup/doctype/holiday_list/holiday_list.json
+++ b/erpnext/setup/doctype/holiday_list/holiday_list.json
@@ -141,7 +141,7 @@
  "icon": "fa fa-calendar",
  "idx": 1,
  "links": [],
- "modified": "2023-07-13 13:12:32.082690",
+ "modified": "2023-07-14 11:29:12.537263",
  "modified_by": "Administrator",
  "module": "Setup",
  "name": "Holiday List",
diff --git a/erpnext/setup/doctype/holiday_list/holiday_list.py b/erpnext/setup/doctype/holiday_list/holiday_list.py
index 1aec032a4786..0b26a62ce6e2 100644
--- a/erpnext/setup/doctype/holiday_list/holiday_list.py
+++ b/erpnext/setup/doctype/holiday_list/holiday_list.py
@@ -6,6 +6,7 @@
 from datetime import date
 
 import frappe
+from babel import Locale
 from frappe import _, throw
 from frappe.model.document import Document
 from frappe.utils import formatdate, getdate, today
@@ -39,7 +40,15 @@ def get_weekly_off_dates(self):
 
 	@frappe.whitelist()
 	def get_supported_countries(self):
-		return list_supported_countries()
+		subdivisions_by_country = list_supported_countries()
+		countries = [
+			{"value": country, "label": local_country_name(country)}
+			for country in subdivisions_by_country.keys()
+		]
+		return {
+			"countries": countries,
+			"subdivisions_by_country": subdivisions_by_country,
+		}
 
 	@frappe.whitelist()
 	def get_local_holidays(self):
@@ -157,3 +166,8 @@ def is_holiday(holiday_list, date=None):
 		)
 	else:
 		return False
+
+
+def local_country_name(country_code: str) -> str:
+	"""Return the localized country name for the given country code."""
+	return Locale.parse(frappe.local.lang).territories.get(country_code, country_code)