How to Register an Online Business in Nepal: Instagram, Facebook & E-Commerce

Do I Really Need to Register My Instagram / Facebook Shop?

For years, running a shop off an Instagram page was an informal, grey-area activity. The e-Commerce Act 2081 formalised it: if you sell goods or services to customers in Nepal online, your business must be registered, regardless of which platform you use. Compliance has been low so far — only a few hundred businesses had registered by the deadline — which means most social-media sellers are technically operating illegally right now.

What Happens If You Don’t Register?

You’ll see a lot of different fine figures online, so here’s the honest picture. Officials at the Department of Commerce (DoCSCP) have said an unregistered business caught during a market inspection or after a consumer complaint can be fined up to NPR 200,000. The Act’s penalty schedule is graduated, and exact bands vary by source:

In practice, enforcement is complaint- and inspection-driven rather than automated, and inspectors typically give a 7-day notice to register before acting. But given how cheap registration is, there’s little reason to gamble on staying invisible.

The Simple 4-Step Path to Getting Legal

Most solo online sellers only need a sole proprietorship plus a PAN. Here’s the full sequence:

“But I Sell From Home — What Address Do I Use?”

This is the question that stops most home-based sellers, and no one answers it cleanly. You can register using your home address. For the PAN and ward steps, acceptable address proof is usually one of: a utility bill in your name, a ward recommendation letter, or a rent agreement (plus the landlord’s citizenship copy and current property-tax clearance if you rent). You do not need a commercial shopfront to register an online business.

What Your Online Business Must Display

Once registered, the Act requires you to show certain information to customers on your page or store. It’s good practice anyway — it builds trust:

• Your registered business name and registration number, and your PAN/VAT number
• A real address and contact details, plus a grievance/complaint contact
• Clear product details — price, description, country of origin, and (where relevant) manufacture/expiry dates
• A return and refund policy — defective or misrepresented goods must be taken back

You also have to resolve consumer complaints within 15 days and keep transaction records for at least 5 years.

Cost & Timeline

Registration and PAN themselves are cheap or free — the bigger ongoing cost is an accountant for annual filing (roughly NPR 10,000–50,000/year), not the signup.

How You’re Taxed as an Online Seller

An online seller with no separate company is taxed as a natural person (sole proprietor), by turnover — the same regime we cover in depth in the sole proprietorship guide:

• Turnover up to NPR 30 lakh (net income under 3 lakh): a flat presumptive tax — NPR 7,500 (metro), 4,000 (municipality), or 2,500 (rural). Optional, and zero transactions means zero tax.
• NPR 30 lakh – 1 crore: a small turnover-based tax (~1% for goods, 2% for services, on the slice above 30 lakh).
• Above NPR 1 crore (or higher profit): normal progressive income-tax slabs.

VAT kicks in at NPR 50 lakh turnover for goods or NPR 30 lakh for services/mixed (the services figure was raised from 20 lakh in FY 2082/83 — ignore older guides that still say 20). Then you charge 13% VAT and file monthly VAT returns. Note: many online sellers see “VAT above NPR 5,000,000” — that’s just the 50-lakh goods figure written in full, not a separate rule.

Getting Paid Legally (and the Foreign-Payment Trap)

Registration isn’t just about avoiding fines — it’s what unlocks getting paid at scale:

• Domestic payments — eSewa, Khalti, ConnectIPS, Fonepay QR, bank transfer, and cash-on-delivery. To open a verified merchant account or a business bank account for settlement, you need a PAN and registration documents — this is the wall most sellers hit when they try to grow beyond a personal wallet.
• Selling on Daraz — you must already have a business PAN (and a bank account for payouts) before you can onboard; the signup form asks for it. The marketplace does not register your business for you.
• Foreign customers — money must come through a bank, and a flat 5% final tax applies on foreign income under NPR 40 lakh/year. PayPal can send but not receive to a Nepali bank, so sellers use Payoneer, Wise, or remittance services instead. Informal “hundi” is illegal.

Dropshipping & Importing Stock

If you import goods into Nepal to fulfil orders (importing stock, or dropshipping physical goods that clear Nepali customs), you also need an EXIM code from the Department of Customs, and you’ll typically need to be VAT-registered to import commercially. Pure “invisible” dropshipping — where a foreign supplier ships directly to a foreign customer and you only market — is closer to the foreign-income case above (5% tax, no EXIM). And if you resell branded products, make sure you have the reseller rights to avoid trademark trouble.

What Most Sellers Get Wrong

• “Selling on Daraz means I’m registered.” No — the marketplace registers itself; you still need your own PAN and business registration.
• Personal PAN vs business PAN. A personal PAN isn’t enough to invoice or open a business account — get a business PAN.
• Quoting the old 20-lakh VAT figure. The services/mixed threshold is now 30 lakh.
• Assuming registration costs a lot. PAN is free and firm registration is a few hundred rupees — the real cost is the ongoing accountant, not the signup.
• Forgetting you must now file returns. Once registered you file annually even with low or zero income — non-filing accrues penalties.
• The foreign-payment grey area. Routing foreign sales through a friend’s overseas account is common but risky under NRB rules — use a legitimate channel.

Why Registering Is Actually Worth It

Beyond avoiding fines, going legal unlocks the things that let an online shop grow: a verified payment gateway and business bank account, Daraz / marketplace onboarding, the ability to issue PAN tax invoices that offices and B2B buyers demand, running Meta / TikTok ads with proper billing, and simple customer trust. Most sellers who register say the unlocks were worth it well before the fine risk mattered.

Frequently Asked Questions

Do I need to register my Instagram or Facebook shop in Nepal?

Yes. Since the e-Commerce Act 2081 (in force 15 April 2025), online selling is only legal if your business is registered — explicitly including Instagram, Facebook, TikTok, WhatsApp and Daraz sellers. Unregistered selling has been illegal since ~20 July 2025, and an unregistered business caught during inspection can be fined up to NPR 200,000.

How do I register an online business in Nepal?

Four steps: register the entity (a sole proprietorship for most solo sellers, or a Pvt. Ltd.), get a business PAN, get a ward licence, and list on the DoCSCP e-commerce portal (7-day review). See the full picture in our company registration guide.

How much does it cost?

PAN is free; firm registration is NPR 500–2,000, plus a ward licence of NPR 1,000–10,000/yr. Realistically a few thousand rupees to get fully legal in ~2–3 weeks. The bigger ongoing cost is an accountant for annual filing.

When do I have to register for VAT?

Once turnover crosses NPR 50 lakh (goods) or NPR 30 lakh (services/mixed) — then you charge 13% VAT and file monthly. Below that you need registration and a PAN but not VAT.

How do I get paid, including from abroad?

Domestically: eSewa, Khalti, ConnectIPS, bank, or COD — a merchant/business account needs your PAN. For foreign income, money must come through a bank and a 5% final tax applies under NPR 40 lakh/year; PayPal can’t receive to a Nepali bank, so use Payoneer, Wise, or remittance services.

Do I need to register separately to sell on Daraz?

You must already have a business PAN and a bank account before onboarding as a Daraz seller — the marketplace does not register your business for you.