Career advice and pathsCareer adviceEntrepreneurship and self-employmentBarriers to formal entrepreneurshipBARRIERS TO FORMAL ENTREPRENEURSHIP
The majority of young people or graduates who embark on entrepreneurship work in the informal sector, mainly in trade, handicrafts, agropastoral activities and services. Taxation, Corruption and administrative red tape are among the obstacles most cited by these entrepreneurs to justify their choice of the informal sector. (1)
The important cost of drawing up the aforementioned administrative documents relating to the formality also represents a major obstacle to the formalisation of the company: CFAF 41,500 on average for an establishment (Sole Proprietorship Company, SPC) to more than CFAF 54,625 for a Limited Liability Company (LLC) in a CFCE in addition to other taxes.
Last but not least, the informal sector also has its share of disadvantages which are more or less restrictive depending on the activity. So, we recommend to always do your business on a legal basis.
DISADVANTAGES OF WORKING IN THE INFORMAL SECTOR
Exclusion from almost all state programmes to help and support entrepreneurship (training, coaching, tax benefits, guaranteed credit, etc.);
Exclusion from public procurement;
Inability to access bank credit;
No insurance coverage;
Inability to do business with foreign partners; etc.
