E-commerce and Online Business Registration in Nepal

The E-Commerce Act, 2081 establishes Nepal's first comprehensive legal framework for online business. It applies to all commercial transactions of goods or services conducted by electronic means in Nepal, covering individuals, businesses and platforms in online buying and selling. The Act's stated objectives include promoting transparency, security and efficiency in digital commerce, integrating small and medium enterprises into the digital economy, preventing fraud and protecting consumer rights. The Act came into force on Jestha 3, 2081 BS and applies throughout Nepal and also to individuals or entities outside Nepal that provide goods or services to Nepal through electronic commerce.

Key features of the Act:

Operation of Electronic Commerce: Any firm, company, or institution registered under prevailing law and authorized to trade goods or services can conduct e-commerce, subject to this Act. Goods or services prohibited from online purchase or sale by prevailing law or by notification in the Nepal Gazette cannot be traded electronically.

Process of Online Business Registration:

1. Establishment of Electronic Platform, Every business conducting e-commerce must establish an electronic platform displaying: name of the platform; business name, address, registering authority, and registration certificate number; office and branch details; permits for specific operations; intermediary or inventory-based business type; VAT or PAN number; contact information and customer service details; grievance handling contact; and listing number from the e-commerce portal.

2. Listing on E-commerce Portal, After establishing a platform, businesses must apply electronically to be listed on the Department's e-commerce portal with business details, proprietor/partner/director information, business description, VAT/PAN, contact details, and branch locations. Existing businesses must apply within three months of the Act's commencement.

Other Important Provisions include disclosure of goods/service details (price, tax, shipping, warranty, return policy), electronic contract formation, payment compliance with federal payment laws, delivery obligations, return policy for non-matching goods, import/export rules, privacy of personal information, prohibited sales without permits, liabilities for intermediary and inventory-based businesses, sellers, buyers and carriers, unfair trade practices prohibition, Department monitoring and inspection, complaint mechanisms, and penalties ranging from NPR 20,000 to NPR 500,000 and/or imprisonment from six months to three years.

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