SUPPORT | April 12, 2016

Business Registration Fuel for Economic Growth

Photo Credit:

The global labor force is starkly divided between those who are formally employed and those who are not. Approximately 60 percent of the world’s workforce, 1.8 billion people, work in the informal sector. According to the International Labor Organization, the informally employed are often women, migrants, and other exceptionally vulnerable populations. There is now a tool to help overcome the sharp disparities by showing governments how to make business registration easier: the Global Enterprise Registration portal.

GER is a web platform created by the United Nations Conference on Trade and Development, the Global Entrepreneurship Network, and the U.S. Department of State. GER contains links to all of the world's online business registration websites with ratings based on their user-friendliness. The goal of the platform, and its Go Green by 2019 Campaign, is to inspire governments to put business registration processes online and to make them clear and simple.

But why is business registration so important? First, business registration protects business owners. It gives their businesses a legal right to exist, so they are less susceptible to bribery. Second, business registration helps workers because they can access the safety net of their government’s labor standards. Employees in the informal sector work in uncertainty under the oversight of unaccountable bosses. Those who are treated poorly have no recourse. Third, businesses that have registered can open bank accounts, apply for bank loans, and bid on contracts with multinational firms as part of global value chains. Finally, unregistered businesses don’t pay taxes, so the government lacks tax revenues to pay for needed infrastructure and services. By facilitating business registration, governments expand the pool of taxpayers. This generates increased funding for development initiatives.

GER encourages both governments and entrepreneurs to take advantage of the benefits of business registration. By providing the links and ratings for registration websites, entrepreneurs can register their own businesses, and governments are able to learn from best practices globally. There are many challenges in the world, but business registration can act as a catalyst for global prosperity. By mobilizing the untapped entrepreneurship capabilities of people from across the globe, we can increase the probability of resolving global challenges. Learn more about the Global Enterprise Registration portal from the CFI.co Winter 2015-2016 issue.

Kidd Duhe Solomon is a student at Tulane University studying International Relations with a double minor in Spanish and International Development… About the author