In recent years, Mongolia has been one of the fastest-growing economies in the world. yet despite such rapid economic growth, as this report identifies, the informal economy has been expanding at a much faster rate than the formal economy. Furthermore, it is easier to operate an enterprise informally than formally. Depending on the type of the operation, having an informal business lessens many burdens, such as inspection, control, tax, social insurance, financial reporting etc. A range of perception based surveys and qualitative interviews formed the empirical basis for the report. Analytical work was carried out subsequently. The report was developed with a view to making a contribution to the current policy discourse, specifically in terms of providing concrete recommendations to help create the environment conductive to formalization.