Lyonpo Loknath Sharma (middle) launches the guidelines for registration of cottage-scale industries

MB Subba

Registration of cottage-scale businesses can be done online now.

Businesses whose initial investments are less than Nu 1 million and engage up to four people are categorised as cottage-scale industries.

Tengye Lyonpo (Economic Affairs Minister) Loknath Sharma at the launch of the Guidelines for Registration of Small-scale Industries 2021 in Thimphu yesterday said that the objective of the reform was to ease the regulatory burden on applicants.

He said that public services would become faster and more reliable. Applicants can log into and apply for registration certificates.

Lyonpo Loknath Sharma said that the reform was initiated in line with the principle of “allow first and regulate later” approach to ease the process of starting cottage industries. “Henceforth, applicants for cottage-scale businesses need not visit offices frequently.”

The registration certificates will be valid for three years. Although the businesses must pay taxes they will be exempted from registration and renewal fees.

Sector clearances, if required, can be submitted online.

However, entertainment businesses including drayang, video game parlours and cinema halls are not eligible for online registration. Travel agents, bars, contract businesses, quarries, stone crushing units, mining activities and wood-based industries like sawmills are also not eligible.

The reform is expected to eliminate the need to submit unnecessary documents for the establishment of a business.

The initiative is aimed at encouraging more aspiring entrepreneurs to venture into cottage-scale industries, which the ministry hopes will enhance economic diversification, create employment opportunities, enhance value addition to the locally available resources and contribute to the overall socio-economic development.

Lyonpo Loknath Sharma said that the initial challenge faced by any aspiring entrepreneurs was the regulatory and administrative burden in having to submit numerous documents to different agencies. The lengthy approval process, he said, discouraged entrepreneurs from starting a business.

An entrepreneur will be allowed to establish the business in the specified location only. The person will not be allowed to register for the same business in other places.

The registered business can participate in tender works, import goods, and apply for loans with the registration certification.

The ministry also has asked cottage-scale businesses already holding cottage scale licenses to switch to the online registration system on or before the expiry of the present licenses with tax clearance certificates.

Lyonpo said that cottage industries are mostly home-based involving the whole family for their income and survival. “The government has diverted enough focus and energy understanding its role in our small economy.”

The Department of Cottage and Small Industries (DCSI) also launched the online technology request database, which is a platform that will facilitate entrepreneurs to look for suitable equipment required for operating their business.

Entrepreneurs can log into for information about the machinery and equipment they are looking for.

The online database platform will also serve as a means to exchange technology within and outside Bhutan. The online search engine is connected to select international database centres, which provide access to various technology suppliers.

According to the ministry, most cottage and small-scale entrepreneurs, particularly startups, lack knowledge on machinery and equipment that are required for the operation of their businesses.