However, a large chunk of these women sole-proprietors comes from the small-scale industry, the largest number among the different scales of industries
The distribution of industry in Bhutan by ownership is dominated by sole proprietorship which constitutes 95.91% of the total industries, followed by private limited companies at 1.83% and partnerships at 1.13%. Interestingly, for sole proprietorships, female ownership accounts for 53.28% while male ownership stands at 46.72%, accentuating a slight prevalence of female-owned businesses.
According to the recently released Industry Census of Bhutan Report 2024, the distribution of industry by ownership is dominated by sole proprietorship with 12,477 industries, followed by private limited companies with 239 industries and partnerships with 148 industries. More industries are owned by females, totaling 6,648, compared to 5,829 industries owned by males. This higher female ownership arises from the small-scale industry, which encompasses 8,972 industries, the largest number among the different scales of industries, of which 55.66% are female owned and managed. Of the 3,136 industries in the cottage-scale, ownership between male and female is near equal at 1,596 and 1,540 respectively. As a percentage, male ownership accounts for 50.89%, slightly more than female ownership at 49.11%. The medium-scale industry accounts for 298 industries, with males ownership at 67.45% and female-ownership at only 32.55%. Likewise, for large-scale industry, male ownership dominates with 76.06%, with female ownership at 23.94%.
The medium-scale industry accounts for 298 industries, with male ownership at 67.45% and female ownership at only 32.55%. Likewise, for large-scale industry, male ownership dominates with 76.06%, with female ownership at 23.94%. The data presented here shows the distribution of ownership of sole proprietorships only. Ownership structures such as partnerships, cooperatives and groups, which involve more than one owner, posed challenges in accurately disaggregating ownership by gender and are therefore not reflected in the Census Report.
Though there is a nearly equal split between male and female ownership in cottage and small-scale industries, there is a noticeable disparity in medium and large-scale industries with male ownership at 67.45% and 76.06% respectively as compared to female ownership at 32.55% and 23.94%.
The distribution of sole proprietorship and partnerships across various education levels reveals that about 28.11% have no education, followed by those who have attained at least middle secondary education level at 17.33%. Apart from other educational levels, 11.94% of sole proprietors and partnerships have Bachelor’s or Postgraduate Degrees. The overall median age for sole proprietorship and partnerships is 40 years.
The most prevalent of industries in Bhutan are the small-scale industries, accounting for 70.59% of the total industries, followed by cottage-scale at 24.75%, medium-scale at 3.01%, and large-scale industries at 1.65%. Service industries dominate across all scales of industry accounting for 84.81%, followed by production and manufacturing (P&M) with 10.42% and contract with 4.77% of the total licenses.
The industrial sector in Bhutan is classified based on the scale of industry and is determined by the size of the capital investment and employment. Further, the industry is categorized into three classifications: P&M, Service and Contract. A large industry is characterized by an investment of BTN 100 million (M) and above with a minimum of 100 employees. A medium-scale industry falls within the investment range of BTN 10M to BTN 100M, with a work-force of 20 to 99 people, while, small-scale industries are those with investments between BTN 1M and BTN 10M, employing 5 to 19 individuals. A cottage industry is identified by an investment of less than BTN 1M and a staff size of less than 4 employees.
The Report outlines that the contribution of the industries to the provisional GDP stands at 45.84% with Nu 117,723M. Out of the 45.84%, medium and large industries accounted for 42% of the GDP valued at Nu 107,848M while cottage and small industries accounted for 3.84% of the GDP valued at Nu 9,875.49M.
The P&M industry accounts for 1,355 licenses (10.42%) of the total, which are mostly cottage and small-scale, with a significant presence in forest-based activities (46.9%) followed by agro-based activities (29.2%). Sole proprietors own 87.3% of the P&M industries and are primarily concentrated in Thimphu Dzongkhag (23.3%) followed by Chhukha Dzongkhag with 138 industries (10.2%).
In terms of urban-rural distribution, a vast majority of P&M industries are in rural areas (63.3%). An estimated 90.9% of P&M products are sold domestically and rely heavily on domestic raw materials. Subsidies totaling Nu 1,128.82M, mainly in tax exemptions, supported the P&M sector. Challenges include access to finance (39.04%), markets (37.64%), and skilled labor (32.03%). Recommendations emphasize policy intervention (33.1%) and improved access to finance (18.5%) among others.
The service industry in Bhutan accounts for 11,032 licenses and is predominantly small-scale, comprising 74.56%, with sole proprietorships dominating at 97.34%. Thimphu Dzongkhag leads with 24% followed by Chhukha at 10.72% and Sarpang Dzongkhag at 9.33%. In terms of urban-rural distribution, there is a nearly equal distribution with 5,366 service industries in rural areas and 5,666 service industries in urban areas. Accommodation and food services leads the service industries’ activities with 69.34% (7,650). This industry primarily caters to the domestic market (98.21%) and sources raw materials both domestically (Nu 1.65 billion (B)) and internationally (Nu 1.02B). Significant challenges include market access (43.1%), financial accessibility (32.4%), and skilled labor shortages (15.1%). Recommendations emphasize the need for policy intervention (41.82%) and better financial access (24.91%) among others.
The contract industry is similarly dominated by small-scale licenses, which constitute 68.76% of the 621 contract licenses. Contract activities are primarily focused on construction of roads and bridges and building-related projects, with sole proprietorships dominating ownership at 89.37%. Thimphu Dzongkhag leads with 22.87% of contract licenses, followed by Chhukha and Wangdue Phodrang Dzongkhags with 9.18% and 7.57% respectively. In terms of urban-rural distribution, 331 industries (53.30%) were based in urban areas and the remaining 290 industries (46.70%) in rural areas. Most contract activities cater to the domestic market (98.55%), relying heavily on locally sourced raw materials amounting to Nu 1.57B. Subsidies, totaling Nu 54.52M, mainly support large-scale contracts through tax exemptions. Key challenges include access to finance (40.10%) and markets (31.40%), with notable recommendations emphasizing policy intervention (52.67%) and improved access to finance (18.33%).
Of the 50 FDI companies enumerated, 90% are private limited companies. By scale, 40% are large, 36% medium, and 24% small-scale FDIs. Service industries dominate the FDIs, accounting for 70% of the total, with the main concentration of activity in accommodation and food services at 46%. Thimphu Dzongkhag leads with 58% of FDIs, followed by Chhukha (14%). The market focus is predominantly domestic (72%), with 26% targeting both domestic and international markets. FDI companies spent Nu 1.12B on domestic raw materials and Nu 1.07B on imported raw materials. Two companies received tax exemptions totaling Nu 31.79M. Major challenges include access to skilled labor (32%), markets (26%), raw materials (22%), and finance (20%). Policy intervention is the top recommendation (68.18%), followed by addressing labor shortages (9.09%).
In terms of employment, the census reveals the pronounced presence of Bhutanese nationals who make up 91% of the total employment with regular employees accounting for 53.20%. Non-Bhutanese workers are prevalent as casual paid employees (33.13%) and contract employees (25.50%). The report also highlights gender imbalances, especially in contract and casual paid employees where male workers exceed female workers by seven and eight times, respectively. Similarly, persons with disabilities (PWDs) account for 62% male and 38% female of the total 133 employed. Thimphu and Phuentsholing Thromde constitute a notable share of employment at 37.54% and 11.06% of the total employed in the industry sector. Additionally, the data reveals a strong demand for skilled workers, particularly in craft and related trades workers, comprising 28.81%, followed by services and sales workers accounting for 16.63% of the total employment.
Overall, the census also reveals that industries in Bhutan face significant challenges, with 42% struggling with market access and 33.5% with finance, followed by 17.3% facing skilled labor shortages. Recommendations include policy interventions as the top concern, with 41.32% of industries highlighting its importance, followed by access to finance at low interest rates (11.04%) and general accessibility to finance (10.85%). Other categories of recommendations range from logistics to technology enhancements and constitute varying percentages across scales, underscoring the multifaceted challenges faced by industries.
The census also reports the reasons for partial operation of industries during the reference period, which include issues with licenses (5.26%), family matters and issues with market accessibility (4.94% and 4.31% respectively) among others. The report also discusses observations and limitations in census data, revealing the reasons for unenumerated industries. Based on the observations, recommendations include overall business advocacy and timely monitoring, collaboration between agencies to address discrepancies, and streamlining online systems for clarity and compliance.
By Tashi Namgyal, Thimphu
