If the rise in numbers is any indication, Bhutan has made significant strides in promoting small and informal businesses in recent years, as part of a broader effort to build a more vibrant and formal economy. According to the Ministry of Industry, Commerce and Employment (MoICE), a total of 8,552 new trade licenses were issued over the past two years, reflecting a sustained national push to bring small enterprises into the formal sector and strengthen regulatory coverage of the private economy.
At the centre of this framework is the Department of Trade under MoICE, which administers three main categories of trade licenses and certificates aimed at supporting different layers of business activity while ensuring compliance with national trade regulations.
The first is the Micro Trade Registration Certificate (MTRC), designed specifically to support small-scale entrepreneurs and vulnerable groups. The Ministry issues these certificates free of cost, with no renewal fee, significantly lowering entry barriers for informal traders. The certificate is valid for three years before renewal is required. This mechanism is intended to encourage the transition of micro-level informal activities into the formal economy without imposing financial pressure on small operators.
The second category is the retail license, which is required for businesses engaged in retail trade. These licenses are subject to annual renewal and are intended to regulate retail operations while ensuring proper monitoring of market activity and compliance with trade rules.
The third category is the wholesale license, issued to businesses involved in wholesale distribution. Like retail licenses, these are renewed annually and play a key role in maintaining regulatory oversight across supply chains and larger trade operations.
Beyond licensing, MoICE has also expanded its focus on providing practical support to entrepreneurs. This includes guidance on business management, regulatory compliance, and market access, delivered through regional offices and outreach programmes. Officials emphasise that the objective is not only to regulate business activity but also to strengthen the capacity of small entrepreneurs, many of whom are engaging with formal systems for the first time.
A major milestone in this transformation has been the introduction of the Integrated Business Licensing System (IBLS) in 2022, which marks a significant shift towards digital governance in business services. “This digital platform is designed to simplify and expedite the licensing process,” said an official from the Ministry, noting that entrepreneurs no longer need to physically visit multiple offices or complete repetitive paper-based procedures. Instead, applications can now be submitted online through a single integrated system, improving both transparency and user convenience.
According to the Ministry, the IBLS is expected to fully replace the older Government-to-Citizen (G2C) system in a phased transition. This move is aimed at improving efficiency, reducing administrative delays, and making business registration more accessible, particularly for entrepreneurs in remote and rural areas.
Further, MoICE is currently reviewing and revising the Trade and Industry Rules 2023 to improve the overall ease of doing business. The official said, “These reforms aim to simplify regulations, reduce bureaucratic hurdles, and create a more competitive environment for businesses.” The reforms are also intended to support private sector expansion and attract greater investment into the economy.
These combined initiatives have contributed to a steady shift in Bhutan’s informal sector towards formalisation. By reducing costs, simplifying procedures, and introducing digital platforms, more small traders and entrepreneurs are opting to register their businesses officially. This shift not only improves regulatory oversight but also enhances access to financial services, government support programmes, and formal market opportunities.
The integration of sectoral clearance agencies into the IBLS has further strengthened this process by enabling businesses to obtain multiple approvals through a single digital platform. This has reduced delays, improved coordination among agencies, and enhanced transparency in the licensing ecosystem.
Importantly, the Ministry continues to maintain a dual approach, combining digital systems with regional service delivery, to ensure inclusivity. This is particularly significant in a country where not all entrepreneurs have equal access to digital infrastructure or literacy. Regional offices continue to play a key role in ensuring that small businesses can still access licensing services without technological barriers.
Sherab Dorji, Thimphu
