Kathmandu, July 30
Anita Regmi of Narayan Municipality-6 in
Dailekh district has been running a poultry farm for the last several years.
She was running the business without registering it at any authorities but she
got a chance to attend a two-day training organised by Dailekh Chamber of
Commerce which educated her about the benefits that she could have if her
business were registered.
Regmi's Samragyi Agriculture and Livestock
Farm is now registered with the local government.
"I didn't know that registering the
business could draw multiple benefits. Now, I know the benefits of enrolling
into the Social Security Fund and book keeping. I am also planning to get a
Permanent Account Number (PAN) as well," she said to The Rising Nepal.
Many entrepreneurs
from across the country need such awareness and education on registering their
business. But federal, provincial and many local governments have just been
calling on the businesspeople to register their business. Although they have
formulated policies and laws to formalise the business, a significant portion
of it is operating informally.
Only making rules is
not sufficient, education awareness and trainings to the entrepreneurs are
necessary, said Juna Mathema, Chairperson of the FNCCI's Start-Ups and
Innovation Forum.
"However, the
entire process should be facilitating the entrepreneurs, not scaring them away
from the government authorities," she said.
To support in this
process, 'Formalise Your Business' (FYB) initiative is being
implemented by the governments at various level especially the provincial
agencies, International Labour Organization (ILO), private sector agencies
including the Federation of Nepalese Chambers of Commerce and Industry (FNCCI)
and its local district and municipal chapters, and Joint Trade Union
Coordination Center (JTUCC).
Likewise, Industrial Enterprise Development
Institute (IEDI), National Vocational Training Academy, Federation of Women
Entrepreneurs Associations of Nepal (FWEAN) and EU UN joint Empowered Women
Prosperous Nepal programme is also supporting this process.
A National Formalisation Committee (NFC) is
working on the national formalisation action plan that also includes the
development of the National Strategy for the same which is expected to engage
all concerned stakeholders from the government and non-government sectors in
spearheading the initiative.
The NFC has recently felt that Nepal is
making significant strides in its efforts to transition informal businesses
into the formal economy, a crucial move aimed at fostering economic growth,
promoting decent work, and advancing social justice.
Registering businesses
Registering informal enterprises – those
operating outside the legal and regulatory framework – with government authorities
and comply with laws and regulations is business formalisation.
This includes aspects like business
registration, bookkeeping, adherence to tax laws, social security
contributions, and compliance with labour laws. The FYB programme acts as a
practical tool that provides entrepreneurs and business managers with the
necessary information and guidance to facilitate them in this transition.
The formalisation of businesses is a
priority which is backed by the 16th Periodic Plan with a target to
achieve 50 per cent formal employment by 2028. The plan also envisions to
increase the number of formally registered businesses at least with one
government authority to 85 per cent by mid-July 2086. This aligns with
Integrated National Action Plan on Formalisation and the Decent Work Country
Programme 2023-27.
An ecosystem supporting formalisation
Krishna Bahadur Rokaya, Officer at the
Directorate of Industry and Consumer Protection in Karnali, said that for the
past six months, his office has been spearheading with the training and
awareness programmes for business registration and sharing its benefits to the
entrepreneurs.
The training which began with 15
entrepreneurs that included 12 businesswomen has now completed four rounds.
"We have launched business
formalisation training for beauticians, pickle producers and other businesspeople,"
said Rokaya while adding that the Directorate conducts continued follow-ups to
ensure that the trainee entrepreneurs have registered their enterprises and are
entitled of various benefits offered by the government as well the banks and
financial institutions (BFIs).
The Directorate is one of the key agencies
in implementing the FYB initiative in Karnali Province.
The directorate is working on an ecosystem
of creating entrepreneurs with relevant training, enabling them to register
their business, and conducting monitoring and follow up to make sure they are
registered with the relevant authorities.
"Earlier, entrepreneurs used to think
that registering business was just an act to get a piece of paper from the
government and it would be of no use in making the business better or enhancing
it. But now they know about the tax system, social security, consumer interest,
work place safety and labour rights," said Rokaya.
The trainings being implemented as per the
national action plan on business formalisation are conducted at 18 locations
and have trained 399 entrepreneurs with 350 women. Likewise, follow-up and
monitoring were conducted with 197 participants of such programmes to assess
the impact, according to the National Formalisation Committee (NFC).
The formalisation of business brings
benefits like access to finance, legal protection, market access, improved
business practice, social security and decent work and economic growth.
Pradip Kumar Koirala, Joint-Secretary at
the MoLES and Chairperson of the NFC,
said that the business formalisation training has become impactful and it
should be continued.
Published in The Rising Nepal daily on 31 July 2025.
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