Nepal's House of Representatives unanimously passed the E-commerce policy Nepal 2081 on February 19, 2025, marking a significant shift in the country's digital marketplace regulation. This comprehensive legislation introduces mandatory registration requirements for all e-commerce businesses, along with strict monitoring measures to protect consumers from fraudulent activities.

The new policy represents a major transformation for Nepalese e-commerce, specifically targeting social media-based transactions with taxation requirements. Furthermore, the legislation implements substantial penalties for non-compliance, including imprisonment terms of 6 months to 3 years and fines ranging from NPR 50,000 to NPR 500,000.

 As Nepal steps into the digital age, these regulations aim to create a more structured and accountable online business environment, though some industry leaders are calling for amendments to ensure a more business-friendly approach.

Key Provisions of Nepal E-commerce Bill 2081

The E-commerce Policy Nepal 2081 establishes a comprehensive legal framework to govern online businesses. After receiving presidential certification, this landmark legislation will come into effect on the 31st day following that certification. The bill addresses critical aspects of digital commerce, from business registration to consumer rights and penalties for non-compliance.

Mandatory Registration Requirements for Online Businesses

The bill mandates that all businesses operating on electronic platforms must be registered according to Nepali law and obtain proper permissions to trade goods or services. Additionally, online business platforms must register with the Department of Commerce, Supplies & Consumer Protection.

For businesses already operating before the enactment of this legislation, registration must be completed within three months on the department's electronic trade portal.

Small or home-based entrepreneurs registered with relevant government authorities will be permitted to sell through platforms like TikTok, Instagram, and Facebook. Those without their electronic platform must register as small or micro-enterprises to legally sell goods and services via social media channels.

Consequently, developing a compliant e-commerce platform is essential. Rewa Soft offers specialized solutions to build effective e-commerce sites that meet all regulatory requirements, helping businesses establish the mandatory electronic platform with proper grievance redressal mechanisms and ensuring all compliance documentation is properly implemented.

Consumer Protection Measures and Rights

Consumer protection forms a cornerstone of the new legislation. When purchasing goods, buyers must be provided with detailed information about products, including the final sale price, delivery charges, delivery time and date, and payment methods.

The bill establishes a strong refund policy, allowing buyers to return goods if they:

• Do not match the listed details (design, trademark, shape, picture, weight)

• Differ from the provided information (warranty periods, country of production)

• Are delivered late or are defective

Businesses must accept returned items without imposing conditions and provide a full refund, including taxes paid by the buyer. Moreover, electronic platforms must maintain the confidentiality of consumer information, with data being used only following the law.

Taxation Framework for Digital Transactions

The legislation brings significant changes to digital taxation in Nepal. A 2% digital service tax applies to services provided over the internet to Nepali consumers by non-resident persons when annual turnover exceeds Rs 2 million. After crossing this threshold, taxable persons must apply for a permanent account number within thirty days.

Non-resident providers must file tax returns online within three months after the completion of the income year (mid-July). Importantly, failure to file returns within the stipulated time results in a fee of 0.1% per year, while late payment of taxes incurs an interest penalty of 15% annually.

For intermediary platforms, the bill requires maintaining transaction records for the period specified by tax law, which is typically six years. In contrast to direct taxes, the digital service tax should not be collected by adding it to the service value.

Penalties and Enforcement Mechanisms

The legislation introduces a tiered penalty system based on violation severity. For operating without creating an electronic platform, failing to register, or not providing adequate product details, businesses face fines ranging from Rs 20,000 to Rs 100,000.

More serious violations, such as conducting electronic transactions without fulfilling legal obligations, can result in:

• Fines between Rs 50,000 to Rs 500,000

• Imprisonment for six months to three years

• Or both penalties combined, depending on offense's severity

Under amendments to the initial bill, platform operators who fail to meet their legal responsibilities now face increased maximum jail terms of three years, up from the previously proposed two years. Moreover, if tax audits reveal that non-resident persons have understated their transaction amounts, they may face tax penalties of 50% of the concealed tax amount.

Impact on Different Business Models in Nepal's Digital Age

The E-commerce Policy Nepal 2081 creates significant shifts across various business models operating in the digital marketplace. As the first comprehensive legislation for online commerce in Nepal, this bill introduces structural changes that will reshape how businesses operate online, regardless of their size or platform.

Traditional E-commerce Platforms (B2C)

For established B2C e-commerce platforms like Daraz and SastoDeal, the new legislation brings increased accountability and formalization. These businesses must now register on the Department of Commerce's electronic portal within three months of the Act's implementation. Upon registration, they'll receive a unique listing number that must be displayed on their platforms.

The bill requires these platforms to maintain transaction records for six years - a significant compliance burden that will necessitate robust data management systems. B2C platforms must also establish dedicated sections for customer grievances and ensure a clear display of product details, pricing, delivery timelines, and payment methods.

One notable advantage for larger platforms is their existing technological infrastructure, which places them in a better position to adapt to these regulations. Additionally, the structured legal framework may benefit established players by creating barriers to entry for smaller competitors who cannot afford compliance costs.

Rewa Soft can assist traditional e-commerce businesses by developing compliant platforms that incorporate all required elements - from consumer grievance sections to secure data storage systems. Our tailored solutions ensure the seamless integration of mandatory registration processes and accountability features.

Social Media-Based Businesses

Perhaps the most dramatic impact will be felt by social media-based sellers. The bill recognizes that small or home-based entrepreneurs registered with relevant government authorities can sell through platforms like TikTok, Instagram, and Facebook. However, these businesses must still register as small or micro-enterprises to operate legally.

Social media sellers will need to:

• Register their businesses with appropriate government authorities

• Display business details, contact information, and registration numbers

• Maintain records of all transactions

• Implement proper refund and return policies

The legislation acknowledges the evolving business landscape by adding a provision allowing small industries to operate through platforms established by others without creating their electronic platforms. This represents an important concession for micro-entrepreneurs who previously operated informally.

Nevertheless, the financial burden of compliance remains a significant concern. Many small sellers fear the high costs of meeting regulatory requirements could push them out of the market entirely. The bill doesn't fully address unregulated social media marketplaces, creating uncertainty about enforcement mechanisms.

Cross-Border E-commerce Operations

International e-commerce platforms face distinct challenges under the new legislation. The bill stipulates that foreign entities can conduct business in Nepal provided they comply with local laws. This means international platforms must register on Nepal's e-commerce portal if they deliver goods or services within the country.

Given Nepal's relatively small market size and limited international transactions, many question whether major global platforms will find value in undertaking these additional compliance measures. The requirement to maintain transaction records for tax purposes and establish local grievance mechanisms could prove particularly burdensome for cross-border operations.

Furthermore, cross-border transactions face additional scrutiny, as the bill permits imports from foreign e-commerce platforms only under specific conditions outlined in Section 11(1). Foreign sellers must verify their identities before selling through intermediaries, potentially complicating international partnerships.

The bill recognizes various digital business activities, including advertising, OTT services, data collection, gaming, and software supply as e-commerce. Therefore, foreign digital service providers in these categories must also comply with registration requirements, potentially limiting Nepali consumers' access to international digital services.

Compliance Challenges and Solutions

Implementing the E-commerce Policy Nepal 2081 presents substantial hurdles for businesses adapting to newfound regulatory demands. The bill's emphasis on accountability creates operational challenges that require strategic solutions to ensure legal compliance without hampering business growth.

Technical Infrastructure Requirements

Initially, businesses must establish independent electronic platforms with robust technical features. The legislation mandates e-commerce platforms to develop dedicated sections for customer grievances and integrate secure payment gateways. 

Beyond these basics, platforms must maintain robust data protection systems to safeguard consumer information and implement cybersecurity protocols that align with Nepal's Electronic Transactions Act.

Small sellers face significant financial pressures as setting up an independent e-commerce platform can cost between NPR 100,000 and NPR 500,000. Indeed, this expense represents a substantial investment, especially for micro-entrepreneurs who previously operated through social media channels without formal infrastructure.

Documentation and Reporting Obligations

Documentation requirements create another layer of complexity. Businesses must:

• Submit detailed registration applications with company particulars

• Update the electronic portal within 48 hours of any business changes

• Maintain transaction records for six years as mandated by tax regulations

• Display registration numbers, contact details, and business information prominently

Correspondingly, failure to maintain proper documentation can result in fines ranging from NPR 10,000 to NPR 50,000. Besides financial penalties, non-compliance may lead to business suspension or even deregistration in severe cases.

E-commerce Platform Development with Rewa Soft

Rewa Soft offers specialized e-commerce development solutions tailored to meet the specific requirements of the new legislation. As experts in creating custom e-commerce platforms for Nepali businesses, we build sites that incorporate mandatory grievance sections, secure payment gateways, and robust inventory management systems.

Our development process begins with thorough consultation to understand your specific business needs, followed by creating platforms that ensure full compliance with registration requirements and accountability obligations. Essentially, our approach transforms regulatory challenges into strategic assets for your business.

Streamlined Registration Process Systems

Subsequently, navigating the registration process itself requires systematic planning. The online registration system has simplified the procedure, reducing the time and effort for business formalization. Applicants can track application status through the OCR portal, though processing times vary based on document completeness and the Office of Company Registrar's workload.

The legislation allows existing e-commerce businesses a three-month transition period to submit listing applications after the Act takes effect. Preparation is vital - properly structured documentation avoids delays or rejections that could compromise your ability to operate legally in Nepal's evolving digital marketplace.

Implementation Timeline and Transition Period

The E-commerce Policy Nepal 2081 follows a structured timeline for implementation, giving businesses a defined window to adjust their operations. Understanding this schedule is crucial for all online businesses to avoid penalties and ensure uninterrupted operations in Nepal's emerging digital marketplace.

Key Dates for Business Registration

The E-commerce policy Nepal 2081 will come into effect precisely 31 days after presidential certification. For existing online businesses, this marks the beginning of a critical adaptation period. All e-commerce operations active before the law's implementation must complete their registration within three months from the Act's commencement date. This grace period allows businesses to prepare the necessary documentation and adjust their platforms to meet compliance standards.

The registration process itself typically requires 2-4 weeks to complete. This timeframe varies based on document completeness and the current workload at government offices. For faster processing, businesses should ensure all required documents are thoroughly prepared before application submission. Registration costs include several components: company name reservation (NPR 100), registration fee (varies by capital size), PAN registration (NPR 500), and digital signature certificate (NPR 3,000-5,000).

Phased Enforcement Approach

Throughout the implementation process, enforcement will follow a phased approach. This methodology aligns with Nepal's national e-commerce strategy launched in 2019. A technical intergovernmental committee comprising all relevant agencies will oversee implementation activities, ensuring coordinated enforcement across different aspects of the legislation.

Rewa Soft offers specialized support during this transition period. Our team can develop compliant e-commerce platforms that meet all technical requirements specified in the new legislation.

Despite the tight implementation timeline, we expedited platform development to ensure your business meets registration deadlines. Our solutions include built-in accountability features like consumer grievance sections, secure data storage systems, and streamlined documentation management—all critical components for mandatory registration compliance.

Once registered, the Department of Commerce will issue platform listing numbers within seven days, delivered electronically to business owners. In turn, businesses must update their electronic portal within seven days whenever they make operational changes.

Preparing Your Business for Compliance

Meeting compliance requirements of the E-commerce Policy Nepal 2081 demands methodical preparation. With clear steps and proper documentation, businesses can navigate registration processes smoothly and avoid penalties.

Step-by-Step Registration Guide

To register your e-commerce business in Nepal, follow this systematic approach:

1. Form a legal entity by registering with the Office of Company Registrar and obtaining a PAN from the Inland Revenue Department.

2. Apply to the Department of Commerce, Supplies and Consumer Protection's e-commerce portal with all required business details.

3. Await verification - the department will review your application and issue a platform listing number within seven days via electronic means.

4. Update information promptly - any changes to your business must be updated on the electronic portal within 48 hours from the modification date.

Required Documentation Checklist

Prepare these essential documents for a smooth registration process:

• Company registration certificate and PAN/VAT registration number

• Business name, address, and contact information (email, phone, business address)

• Comprehensive description of business activities

• Details of all branches or outlets, if applicable

• Identity information of proprietor (for private firms) or directors (for companies)

Accountability Systems Implementation

Businesses must establish robust accountability mechanisms:

• Create a dedicated grievance section on your e-commerce platform for customer complaints

• Implement a system to register complaints and provide immediate acknowledgment

• Develop investigation protocols to resolve issues within fifteen days

• Retain all transaction records for six years as mandated by law

Technology Solutions for Regulatory Compliance

Rewa Soft offers specialized e-commerce development solutions that ensure full compliance with Nepal's new regulations. Our platforms incorporate:

• Secure payment gateways approved by Nepal Rastra Bank

• Built-in grievance redressal mechanisms

• Automated documentation management systems

• Data protection features that safeguard customer information

• User-friendly interfaces for updating business information

Altogether, preparing for compliance involves understanding registration requirements, gathering proper documentation, implementing accountability systems, and utilizing technology solutions. 

Rewa Soft can streamline this process by building e-commerce platforms that meet all technical and legal requirements while ensuring a smooth user experience. For existing businesses, the three-month transition period after the Act's commencement provides a critical window to complete registration.

How Rewa Soft Can Help You Get a Professional and Secure Website

Nepal's E-commerce Bill 2081 marks a transformative shift in the country's digital marketplace regulation. This comprehensive legislation establishes clear guidelines for online businesses through mandatory registration requirements, consumer protection measures, and strict taxation frameworks.

The bill affects various business models differently. Large e-commerce platforms must enhance their existing infrastructure, while social media-based sellers face the challenge of formal registration and compliance. Additionally, international platforms must adapt to local regulations or risk losing access to Nepal's growing digital market.

Rewa Soft specializes in building e-commerce platforms that meet all regulatory requirements of the new legislation. Our solutions include built-in compliance features, streamlined registration processes, and comprehensive documentation management systems. These platforms ensure that businesses operate legally while maintaining efficient operations in Nepal's evolving digital marketplace.

Ready to future-proof your online store? Contact Rewa Soft today and build your e-commerce site with confidence.