- Background
The Parliament of Nepal enacted Nepal’s first Nepal’s E-Commerce Act 2025. It is introduced to regulate the rapidly growing digital marketplace, aiming to provide a structured legal framework for online businesses, protect consumers, and bring social media-based transactions under the tax system. Initially presented in the National Assembly in June 2023, the bill was passed by the upper house in November 2023 and was unanimously approved by the House of Representatives in March 2025 after discussions and amendments.
Nepal’s new Electronic Commerce (E-Commerce) Act, 2025 (2081) shall be enforced throughout Nepal, and is aimed to regulate individuals or entities providing goods and services through electronic commerce in Nepal, regardless of where they are located. This Act aims to regulate and make the commercial transactions of goods or services conducted through information technology systematic and reliable. It was certified on 16th March, 2025 (2081/12/3) and shall come into effect on the thirty-first day from the date of certification. Key provisions include mandatory registration for online businesses, stringent consumer protection measures, and government oversight to ensure fair trade practices.
- Definition and Scope
The E-Commerce Act 2025 defines key actors and roles in electronic commerce in Nepal wherein, “electronic platforms” are systems for conducting transactions and promotions online. The Act primarily governs e-commerce activities, including those conducted by merchants and logistics providers, with an emphasis on consumer protection and regulation of contracts and transactions.
The regulatory bodies include: the “Ministry”, which refers to the Ministry of Industry, Commerce, and Supplies, and the Department of Commerce, Supplies, and Consumer Protection.
- Responsibilities of Intermediary Business Entities
1.1 The Act defines, “Intermediary Business” as a party facilitating transactions on electronic platforms on behalf of the seller. Intermediary businesses must maintain fairness in listing goods and services, ensuring no undue preference is given to any seller unless explicitly stated.
1.2 Act obliges Catalog-based e-commerce businesses must transparently provide product details, legal notifications, and transaction records. They must not manipulate reviews, misrepresent product features, or engage in misleading advertising. Additionally, they must comply with warranties, guarantees, and refund policies, ensuring prompt service delivery unless hindered by force majeure.
- Responsibilities of sellers
The Act defines “Sellers” are entities providing goods or services for sale, including electronic businesses. Sellers must enter agreements with intermediary platforms, provide verified business documents, and adhere to obligations regarding product delivery, transparency, and consumer protection. They must not manipulate reviews, engage in fraudulent activities, or refuse legitimate returns and refunds.
- Responsibilities of buyers
The Act defines , “Buyer” as anyone purchasing goods or services, including their legal representative. Buyers are responsible for honoring contracts, avoiding fraudulent transactions, and promptly addressing complaints.
- Transportation responsibility
Businesses must ensure timely and accurate delivery, with carriers adhering to consumer protection laws. Any violations by carriers will be subject to legal consequences.
- Initial Compliances
1. Businesses registered under applicable laws and authorized to trade goods or services can engage in electronic commerce, except for items prohibited by law or government notification.
2. To conduct e-commerce, businesses must establish an electronic platform, ensuring essential business details, such as registration, contact information, and grievance mechanisms, are provided and updated within 48 hours of any changes. Micro-entrepreneurs and home-based businesses may use existing platforms instead.
3. All e-commerce businesses must register on the Department’s e-commerce portal, providing necessary details like business registration, ownership, VAT/PAN numbers, and contact information.
5. Existing businesses must comply within three months of the law’s enactment, and the Department must issue a registration number within seven days. Any changes to branches or outlets must be updated within seven days.
6. Businesses must disclose comprehensive product or service details, including name, design, trademarks, price (with tax), delivery charges, payment methods, warranties, return policies, manufacturer details, and expiry dates. They must also provide clear contractual terms and a mechanism for handling customer reviews, complaints, and feedback.
7. Businesses must specify terms for cancellations, returns, exchanges, refunds, warranties, and guarantees. Unauthorized sales of goods or services requiring licenses or legal approvals are prohibited.
- Financial compliance
Buyers may complete transactions before, during, or after receiving goods or services, including through couriers acting on behalf of the business.
Transactions must comply with federal payment laws, and businesses must immediately issue an electronic or physical receipt.
Foreign currency transactions must adhere to existing federal regulations.
- Operational compliance
Individuals, firms, and institutions may import goods or services from foreign e-commerce businesses, subject to federal laws. Similarly, businesses selling via electronic platforms in Nepal can export goods or services, provided transactions comply with banking regulations and mutual contracts.
Businesses are responsible for delivering goods or services within the agreed timeframe or providing an alternative collection option for buyers.
If changes to delivery location, recipient, or timing are requested before dispatch and agreed upon by both parties, the business must accommodate the modification, with potential fee adjustments.
Buyers have the right to return goods or services if they do not conform to the seller’s description, provided they are unused and undamaged.
Sellers must accept the return without additional charges and offer a replacement of equal value or issue a full refund, including applicable taxes, if no alternative is accepted.
Other return provisions will follow federal laws.
- Data privacy compliance
Businesses must ensure the confidentiality of personal information, sharing it only under legal provisions.
Transaction-related information may be exchanged among buyers, sellers, and couriers as per contractual agreements.
Users must have control over their personal data, and any breach of confidentiality will result in legal penalties.
- Regulatory compliance
The relevant department will monitor e-commerce activities, with specialized regulatory bodies overseeing specific products or services. Irregularities must be rectified as per directives from the authorities.
Violations can be reported to the Director General or an investigating officer, including through electronic means. Complaints may also be filed from monitoring reports. Investigations must conclude within six months, with appropriate actions following. If another authority is responsible, the complaint will be forwarded accordingly.
The department will oversee compliance with electronic communication laws, consulting relevant government bodies and experts.
Regulatory authorities will set standards for e-commerce platforms, which all relevant entities must follow.
Consumer rights, product quality, pricing, and dispute resolution will be governed by the existing Consumer Protection Act, with necessary modifications for e-commerce transactions.
The department may issue directives to ensure smooth operation of e-commerce, with compliance mandatory.
- Offences and liability
Entities in e-commerce must not engage in unfair trade practices or business malpractices. Violations are subject to legal action.
E-commerce platforms are liable for complaints about goods or services sold, even if they didn’t directly provide them.
Offenses include operating without registration, failing to disclose product information, and violating intermediary obligations.
Fines for offenses range from twenty thousand to one hundred thousand rupees, with appeals to the Director General within seven days.
Severe offenses may incur fines between forty thousand and five lakh rupees, imprisonment for six months to three years, or both.
Designated officers investigate offenses and refer cases to government attorneys. Prosecution proceeds in the newly established ‘Consumer court’.
The Government of Nepal will represent the public interest in the cases.
E-commerce activities by employees or representatives are considered actions of the business entity, holding it accountable.
- Grievance-handling
Consumers can file complaints electronically or in person. Businesses must acknowledge complaints, resolve them within 15 days, and provide written explanations if unresolved. An online complaint system is required.
- Miscellaneous
The Government may offer discounts, facilities, or subsidies to small, home-based businesses engaged in e-commerce, if transaction volumes exceed a set threshold.
The Ministry can issue directives for effective implementation of the Act. The Ministry will evaluate the Act’s implementation every five years, reporting findings for improvements.
Disclaimer: This note is not a legal opinion but for general understanding. It is advised to consult a lawyer for legal advice before initiating foreign investment in Nepal. Please note that the copyright for this note vests on Vidhi Legal Concern.
Contributor: Ishika Khadka (Intern at Vidhi Legal Concern)
