The E-commerce sector in Nepal has been flourishing at a rapid pace. However, interested individuals or entities often find it difficult to carry out e-commerce business in the absence of any specific laws regulating the business. In order to address this legal lacuna, the Ministry of Industry, Commerce, and Supplies, Nepal Government has undertaken series of discussions with the concerned stakeholders and e-commerce players and has been revising the draft of the E-Commerce Bill. Here, we have explained the registration process for an E-commerce Company in Nepal.
While the drafting of the E-Commerce bill is ongoing, companies and entities are doing their businesses in Nepal after being registered at the Office of the Company Registrar (“OCR”) and/or Department of Commerce, Supplies & Consumer Protection (“DOC”). It should be noted regulatory authorities mandatorily require companies to be registered with DOC in order to undertake E-Commerce Business in Nepal.
The Following explains the general Registration Process for E-Commerce Businesses in Nepal.
1. Registration at Office of the Company Registrar ( OCR ) and Inland Revenue Office
Individuals interested to conduct E-commerce Business in Nepal should get their entity registered like any other normal company at the OCR and Inland Revenue Office. For further details on company registration, click here. When setting out objectives of the proposed company in the Memorandum of Association and Articles of Association, a broader statement depicting the e-commerce business should be inserted in the “objectives” section.
2. Registration at the Department of Commerce, Supplies & Consumer Protection ( DOC )
Once, the company is registered at the OCR, it shall then be registered at DOC. For online registration of a Company at the DOC, you may follow this link.
Once the Company is registered with OCR, Inland Revenue Office, and DOC, the company willing to undertake an E-Commerce Business may begin its operation.
It should be noted that an individual also has the option to directly register a firm at DOC followed by registration at Inland Revenue Office.
Major Provision of Draft E-Commerce Bill
Following outlines major points of the draft E-Commerce Bill that is under discussion and revision at the Ministry of Industry, Commerce, and Supplies:
- The draft E-Commerce Bill contemplates to regulate persons, firms or organized institutions in Nepal doing E-Commerce Business and companies outside Nepal supplying goods or services to Nepal through electronic medium.
- The draft E-Commerce Bill requires individual, company, firm to list the electronic portal at DOC. However, there is no specificity in the draft in respect to the electronic portal. Further, the draft has also not identified “industry” as a category of entity.
- Commercial transactions can only be carried out by the interested person or entity upon receipt of a certificate of enlistment in the electronic portal issued by the DOC.
- Furthermore, draft E-Commerce Bill requires registration of a secured electronic platform (website or page) for the purpose of conducting electronic commercial transactions. Information regarding the goods or services to be supplied by the concerned person or entity shall also be laid down in the electronic platform. Here, the draft has not identified mobile applications as one of the electronic platforms. Therefore, this area still remains unaddressed.
- The draft E-Commerce Bill also recognizes the establishment of a contractual relationship between the buyer and seller of goods or services transacted via electronic medium once the seller agrees to supply/sell the proposed goods or services by the buyer.
- Unless agreed otherwise by the buyer and the seller, when transacting goods or services via electronic platforms, the payment must be made prior to or during the transaction by the buyer.
- Regarding the modes of payment, draft E-Commerce Bill notes that the amount may be paid in cash, through bank card, bank cheque or a banking or electronic medium. Although new payment modes such as wallet, bank online payment, cash, and negotiable cheques are used by buyers as per the convenience of the buyers now, the draft E-Commerce Bill provides “good-for-payment cheques” as a mode of payment in case the payment amount is greater than the determined price.
Disclaimer: This note is prepared solely for the purpose of information and shall not be, in any way, treated as a legal opinion. It is advised to consult a lawyer for legal advice. Please note that the copyright for this note vests on Vidhi Legal Concern.