Why enterprise formalization?

The incidence of informal enterprises is high, particularly in developing countries where the informal economy provides a source of livelihood for people who cannot enter the formal economy. Informal enterprises are often characterised by low productivity and decent work deficits, they do not generate public revenues and they tend to engage in unfair competition with formal enterprises.

• The ILO conducts research and provides advisory services to constituents to facilitate enterprise formalization, for example through appropriate and well-coordinated legislation, policies and compliance mechanisms.
• This work is combined with direct measures to support enterprise formalization, such as business development services and measures that make business registration cheaper, easier and more attractive.
• The work undertaken by the team contributes to the SDG Goals of Agenda 2030, and builds on ILO Recommendation 204 concerning the Transition from the Informal to the Formal Economy, which was adopted by the ILC in 2015.

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