Self Employment and Small-Scale

Industries
Group Presentation by

Santosh Kumar Thapa, Shivaraj KC

Rakshya Gauli, Samir Pandey
Roshan Khanal
Self Employment and Small-Scale
Industries
Table of Contents

1. Concept of Self Employment

2. Small Scale Industries and Cottage Industries
3. Legal and Statutory Environment in Setting a Small-
Scale Industry
4. Steps in Starting a Small-Scale Industry
5. General Problem of Small-Scale Industries in Nepal
Self Employment

Self-employment refers to working for oneself

rather than working for a specific employer
who pays them a salary. Self-employed
individuals often act as independent
contractors by collaborating with other
businesses.
Self Employment
Examples of occupations in which self-employment is
common include various jobs like writers, freelancers,
artists, lawyers, accountants, financial services
professionals, and investors.

They have the large degree of freedom, flexibility,

they are their own boss, there is the sense of pride and
achievement

On the other-hand there is the high degree of

uncertainty of employment and perpetual existence,
there are a lot of financial downside as well.
 Small Scale Industries and
Cottage Industries

Small-scale industries, belong to the group of

industries which have capital investment up to Rs 5
crores (MoI 2067) and are operated with the help of
outside labour varying in the most cases from 10 to
25 heads.
The Industrial Policy 1992 has considered an industry as a
small industry if it has installed machinery and tools worth
more than Rs. 200,000 and has fixed capital not exceeding
Rs. 10 million.
Eg- Woodcarving, dyeing, printing, cloth weaving, carpet
knitting, oil processing
 Small Scale Industries and
Cottage Industries

According to Nepal Industrial Policy 2067, an industry which uses up to

10 KW electricity for production is called a cottage industry (MoI 2067).

It is related to country's tradition, art, culture, and traditions. Handlooms,

clothes, carpets, curio goods (curios products like statue), hand-made
papers and paper products, metal products, wooden and bamboo product
industry are some of the examples of cottage industries of Nepal (MoI
1992).
Small Scale Industries and
Cottage Industries
 Legal and Statutory Environment in
Setting a Small Industry
Regulatory Framework
Nepal does not have a dedicated national MSMEs development policy or framework. With
regards to institutional arrangements, Nepal’s Department of Cottage and Small Industries
(DCSI), under the Ministry of Industry, Commerce and Supplies, has the mandate to promote
and foster various kinds of cottage and small industries, but it lacks the authority and/or
capacity to support their access to finance and many other areas. (UNESCAP,2020)

Registration and Tax Compliance

They are required to register either at the company registration office, the GoN’s Department of
Cottage and Small Industries, or at the local government municipalities. They are then required
to enroll the enterprise at the tax office to obtain a Permanent Account Number (PAN) or, if
their annual turnover is over NPR 5 million (USD 41,384), they need to register for value
added tax (VAT).
 Legal and Statutory Environment in
Setting a Small Industry
Government’s Eye on Small Scale Industry
Government of Nepal is seeing the growth of small-scale industry as the prominent economic
achievement. It is trying to boost the country wide growth of the small-scale industry through the
amendment of the existing law, enforcement of new law and giving subsidy to the women, rural
and indigenous entrepreneurs.

Efforts are also being made to streamline bureaucratic processes and make doing business in Nepal
easier and more transparent. Nepal government also improved company act 2063, implemented
foreign investment policy 2071, industrial business act 2073, special economic zone act 2073 and
national intellectual property policy 2073. Similarly department of industry provides different
facilities to promote SMEs in Nepal
 Steps In Starting a Small-Scale Industry

Navigating the Choosing the Right

Business Registration Operation
Business Landscape Business Structure
 Steps In Starting a Small-Scale Industry

Choosing the Right

Navigating the
Business Registration
Operation
BusinessLandscape
Structure
Business

• Understanding the
legal System
• Market Research
• Funding Terms
• Intellectual Property
Rights
• Contract Laws,
Employment Laws
and recent reforms
 Steps In Starting a Small-Scale Industry

Navigating the Choosing the Right

Business Registration
Operation
Business Landscape Business Structure

• Understanding the • Sole

legal System • Partnership
• Market Research • Private
• Funding Terms • Public
• Intellectual Property
Rights
• Contract Laws,
Employment Laws
and recent reforms
 Steps In Starting a Small-Scale Industry

Navigating the Choosing the Right Business Registration

Operation
Business Landscape Business Structure

• Understanding the • Sole • Choosing a Business Name

legal System • Partnership • Preparing documents
• Market Research • Private • Filing application
• Funding Terms • Public • Fees and Timeline
• Intellectual Property • Local Administration Registration
Rights • Obtaining PAN/VAT
• Contract Laws, • Registration in Ind. Of Commerce
Employment Laws • Open a Corporate Bank account
and recent reforms • Additional Business License, Permit
and Registration
 Steps In Starting a Small-Scale Industry

Navigating the Choosing the Right Business Registration Operation

Business Landscape Business Structure

• Understanding the • Sole • Choosing a Business Name

legal System • Partnership • Preparing documents
• Market Research • Private • Filing application
• Funding Terms • Public • Fees and Timeline
• Intellectual Property • Local Administration Registration
Rights • Obtaining PAN/VAT
• Contract Laws, • Registration in Ind. Of Commerce
Employment Laws • Open a Corporate Bank account
and recent reforms • Additional Business License, Permit
and Registration
 General Problems of Small-Scale
Industries in Nepal

• Infrastructure
• Access to Capital
• Access to Government
• Contradictory Laws
• Raw Materials
• International Recognition and Strong
Rivals
Thank You