New "Entreprenant" Status Encourages Business Formalization in Benin

Benin has become the first member of OHADA, an initiative to harmonize business laws across 17 West and Central Africa nations, to implement the entreprenant status. The official launch took place in Cotonou on May 5, 2015 and was attended by over 600 participants, including private sector stakeholders, government officials, and donors.

OHADA, or the Organization for the Harmonization of Business Law in Africa, adopted the new simplified legal regime to encourage micro and small entrepreneurs to join the formal sector.

The Permanent Secretary of OHADA, Professor Dorothé Cossi Sossa, attended the launch and highlighted the importance of the entreprenant status: “This new regime helps the transition from an informal to a formal economy. It is an essential stepping stone to the emergence of a true and dynamic private sector.”

By simplifying the business registration process and making it free, the government is encouraging micro and small enterprises to formalize and benefit from various advantages. “This will enable these businesses to create jobs, increase profits, contribute to economic growth and thereby reduce poverty in Benin,” said the Honorable Minister of Public Policy, Antonin Dossou.

The national rollout follows a successful pilot project conducted from April 2014 to March 2015. The project targeted over 3,600 informal micro enterprises located in Cotonou. Since then, over 400 small entrepreneurs have formalized their businesses. As a result of the pilot, the process of registering a business has become easier, cheaper, and faster for entrepreneurs in Benin. 

Josetta Loupeda, a restaurant owner in Cotonou who registered as an entreprenant, was very impressed when she received her registration card within 24 hours and at no cost. She has also benefitted from training in accounting, inventory management and finance. Her management skills have greatly improved, and her profits are increasing. “Now I operate as a true professional because I have a better understanding of my stock,” Josetta said. “I manage my business better and know my incomes and expenditures.”

Since 2012, the World Bank Group has supported the government of Benin in investment climate reforms that promote trade and competitiveness in the private sector. The Benin Investment Climate Program specifically aims to build a strong business enabling environment by simplifying business entry and operation procedures, while the Competitiveness and Integrated Growth Opportunity Project works to foster entrepreneurship. 

Both projects jointly support the implementation of the entreprenant legal status, including access to credit and incentives such as a lighter tax regime, assistance in the formalization process, and support with bank, tax mediation and counseling services.  

"Benin has just shown the other 16 OHADA member states that the policy can be adapted to the local context. It is a successful way to integrate thousands of businesses to join the formal economy, become more prosperous and create jobs,” said Mr. Olivier Fremond, World Bank Group Resident Representative in Benin. “The World Bank Group support enabled the government to test and identify the most suitable way to implement the policy and customize it for Benin."

The project is expected to encourage hundreds of small businesses to formalize, generate thousands of jobs, and contribute to sustainable economic growth in the country. The status will be rolled out across all 17 OHADA member states in the near future.