eCommerce Laws in Nepal

This article talks about the main laws that cover eCommerce in Nepal and related topics. It lists four important laws that anyone interested in understanding Nepal’s online market or starting an online business should know about.

Each law is explained in simple language with a short summary to help you get the basics easily. You will also find official links for each law if you want to learn more in detail.

Electronic Transaction Act, 2063 (2006)

1. The Electronic Transactions Act makes online business safer and more reliable in Nepal. It ensures that digital documents and signatures you use in your eCommerce store are legally valid. This means you can trust electronic contracts and payments just like paper ones, helping your business run smoothly and securely.

1. This law protects your online business by confirming that digital signatures are legally accepted and secure. It also sets rules for issuing and managing these digital certificates, making sure only authorized people can sign important documents electronically, which keeps your transactions safe from fraud.

1. If you run an online store, the Act helps prevent cyber crimes like hacking, fraud, or sharing false certificates. It lays out penalties for these crimes, so your business and customers are better protected against online threats and illegal activities.

1. The Act requires businesses to follow clear steps to get digital signature licenses and certificates, which are important for verifying identities online. This adds trust for your customers, as they can be confident their information and orders are handled safely and legally.

1. The law also creates special tribunals to quickly handle any disputes or issues related to electronic transactions. This means if problems arise in your eCommerce dealings, there is a clear, legal way to solve them efficiently without long delays.

Consumer Protection Act, 2075 (2018)

1. Consumer Rights: Protection from harmful goods, right to information, fair pricing, grievance redress, compensation, and consumer education.

1. Prohibited Practices: No artificial control of demand, supply, or prices through hoarding, limiting production, or similar acts.

1. Supply Control: Government can regulate quality, price, and supply; monitor unfair trade and monopolies; prevent artificial shortages.

1. Labeling Requirements: Consumer goods must include producer info, ingredients, quantity, quality, usage instructions, price, expiry, warranty, and safety precautions.

1. Standards & Price Lists: Government sets quality standards; vendors must display wholesale and retail prices.

1. Government Powers: Authorities can inspect, investigate, confiscate sub-standard goods, and appoint inspection officers to enforce the law.

1. Penalties: Violations lead to fines and imprisonment ranging from 2 to 14 years depending on severity, including penalties for actions that threaten life or cause harm.

For a more comprehensive and in-depth understanding, you can check the Consumer Protection Act related to eCommerce.

Data Privacy and Protection

1. Legal Framework: Nepal’s data privacy laws include Article 28 of the Constitution, the Individual Privacy Act 2018, the Individual Privacy Regulation 2020, and the Muluki Criminal Code 2017, aiming to protect personal privacy and data.

1. Scope & Applicability: The Act protects fundamental privacy rights related to personal data of individuals in Nepal, covering collection, storage, processing, use, and retention by public bodies. Its applicability to foreign entities is unclear.

1. Definition of Personal Information: Includes sensitive details like caste, ethnicity, identity documents, biometric data, health, political views, and opinions. It has a narrower scope than GDPR.

1. Collection & Consent: Only authorized persons may collect personal data, with mandatory disclosure of purpose and obtaining individual consent.

1. Use & Processing: Data can be processed only for the stated purpose with consent. Exceptions exist for legal, security, and criminal investigation reasons. Sensitive data use is highly restricted.

1. Data Retention & Transfer: No clear rules on retention duration. Transfer of data requires individual consent, especially for sensitive categories like health, property, and political affiliation.

1. Responsibilities of Public Entities: Must protect data against unauthorized access or misuse and correct inaccurate data upon valid request before benefiting from it.

1. Rights of Individuals: Right to access, be informed about, and correct their data. No explicit right to restrict processing.

1. Regulator & Enforcement: No dedicated data protection authority in Nepal. Privacy violations are criminal offenses punishable by imprisonment, fines, and possible compensation.

eCommerce Bill 2025

Nepal has made a new law called the E-Commerce Act 2025 to control and protect online buying and selling. This is the first big law in Nepal for online business. It helps keep things safe, fair, and clear for buyers, sellers, and everyone involved. If someone breaks the law, they can be fined up to NPR 500,000 or even go to jail for up to 3 years.

What the Law Aims to Do:

-Control all kinds of online business, whether selling goods or services.

-Protect people who buy online and make it easy to complain if something goes wrong.

-Help small and local businesses start selling online.

-Make sure everyone involved in online business knows their responsibilities.

Who Must Follow This Law:

Anyone, inside or outside Nepal, who sells goods or services to people in Nepal using websites, mobile apps, social media, or other online platforms.

Important Rules:

Registration: All online sellers must register their business with the government within 3 months, except small local businesses that sell through bigger online marketplaces.

Electronic Contracts: Online agreements (like clicking “I agree” or using digital signatures) are official and must clearly say the rules for returns, warranties, delivery times, and cancellations.

Returns and Refunds: Buyers can get a full refund if the product is not as described, late without reason, or poor quality. Some exceptions apply, like for perishable goods or customized items.

Information on Websites: Sellers must clearly show product details, price (including delivery), warranty, seller contact info, payment methods, and return policies. If they don’t update this info within 48 hours of any change, they can be fined NPR 20,000 to 100,000.

Responsibilities of Different People:

-Sellers must deliver goods on time, provide refunds if needed, and avoid fake reviews or ads.

-Online platforms (like marketplaces) must provide correct product info, protect buyers, keep records safe, and handle complaints properly.

=Everyone must avoid misleading customers or selling fake products.

Protecting Customer Data:

Businesses must keep customer personal data safe, only use it for the sale, and allow customers to update or remove their data. Breaking these rules can lead to legal trouble.

Delivery Rules:

Sellers are responsible for delivering products as promised. Delivery workers must follow consumer protection laws, and payments to delivery services count as payments to the sellers.

How Complaints Are Handled:

Online platforms must have a way for customers to complain, respond to complaints within 15 days, and keep a record of how complaints were solved. The government will also check businesses regularly, and those who don’t follow rules can be removed or blacklisted.

Penalties for Breaking the Law:

Operating without registration: Fine between NPR 10,000 and 50,000.

False advertising or fake reviews: Fine between NPR 50,000 and 500,000, and possible jail time 6 months to 3 years.

Selling illegal goods online: Fine between NPR 100,000 and 500,000.

Misusing customer data: Punished under cybersecurity laws.

Other Laws Connected to This Act:

-This new law works along with:

-Consumer Protection Act (for refunds and product safety)

-Electronic Transactions Act (for digital contracts)

-Companies Act (for business registration)

-VAT Act (for taxes)

-Cybersecurity Bill (for data safety)

Besides the main four, other important laws affecting eCommerce in Nepal include the Company Act, Private Firm Act, Partnership Act, Industrial Enterprise Act, Foreign Investment Act, PAN/VAT registration, and Trademark/IPR laws. These help with business setup, taxes, compliance, and brand protection.