There are thousands of officially registered commercial websites in Nepal, but due to the lack in proper rules and regulations, roadmap, tech startup support etc.

In an era of globalization and a society that is technologically driven, E-Commerce has seen a rapid growth in recent years. In context of Nepal, E-Commerce has witnessed a swift rise since its introduction back in the late 1990’s. E-Commerce has finally emerged as one of the most successful business ventures for aspiring entrepreneurs. In the late 1990s’ Nepalese residing abroad were the main users of this digital version of performing commercial transactions via internet, back in the days NRN (Non-Residential Nepalese) used to place an order online for Goats for their family back in Nepal, after making the payment abroad the Goats used to be delivered in Nepal. We can clearly see the transition of E-Commerce in Nepal; from purchasing goats online mostly by NRN’s to ordering almost everything today by the general crowd.

The development of Information & Technology and the advancement has led to a simplified online based business ventures throughout Nepal. During the COVID-19 pandemic, people stayed home and mostly made online orders for their grocery items and other essential products, during the pandemic the importance of E-Commerce was realized by both customers and sellers.

There are thousands of officially registered commercial websites in Nepal, but due to the lack in proper rules and regulations, roadmap, tech startup support etc., there are only handful E- Commerce websites that can be asserted as an established commercial website.

Rules & Regulations

In Nepal, the boom in online business was possible due to the internet penetration which was recorded at 77.91 % as of October 2020. However, amidst all the progress, Nepal lacks proper regulatory directives for an operation of E-Commerce. There are many issues associated with digital transactions and online business module which needs to be timely addressed. There is no law governing E-Commerce in Nepal, and E-Commerce businesses in Nepal are usually registered at the Office of the Company Registrar as per Company Act 2063. E-Commerce companies are not allowed to produce goods or get involved in manufacturing and if required, a license from Department of Industry and Commerce is mandatory.

There is lack of proper guidelines and legal procedures concerning E-Commerce but recently, the Ministry of Industry, Commerce and Supplies has finalized a draft of a bill to regulate and monitor E-Commerce. Numerous existing online based businesses are now obligated to register themselves within one year from the validation of the bill. The bill is under revision and shall be passed from the parliament; The Rt. Hon. President of Nepal’s approval is required before the first E-Commerce dedicated law is implemented.

What the proposed bill states?

1. The acceptance of order by the seller from the customer will be regarded as a contract.

2. The customer holds the right to cancel the product before dispatched.

3. There shall be no cancellation charge and customer should be refunded fully if the payment was done.

4. Multiple mode of payment should be implemented.

5. The seller is responsible for timely delivery of the product as mentioned during the order.

6. The goods/services mentioned on the website shall be delivered to customers, alteration is not allowed.

7. The seller is liable to replace a defective product or refund the amount.

8. The seller if is non-compliant with the established law, he/she shall be fined up to Nrs.200,000.

9. The customer has the right to file a complaint against the E-Commerce company at the District Administration Office if the product is not delivered within the stated time frame.

10. A designated employee to register complaints and help the customer is mandatory for all E-Commerce company and the employee’s name, phone number and address shall be placed on the website.

Trilegal has been actively associated with many tech startups in Nepal and have provided all the required advices on data protection, royalty payments, drafting of agreements, software licensing, trademarks, patent rights, logo registration etc. for a legally secured start to a business or assist existing businesses.