




































AGORA International Journal of Economical Sciences, http://univagora.ro/jour/index.php/aijes 

ISSN 2067-3310, E-ISSN 2067-7669 

Vol. 18, No. 2 (2024), pp. 276-299 

 

276 

 

EXPLORING THE NEXUS BETWEEN ENTREPRENEURSHIP AND 

INTERNATIONAL BUSINESS: A CASE STUDY OF BHUTAN 

 

B. SHRIVASTAVA, P. D. TOPGAY, P. L. TOPGAY, L. DEMA, S. DAVE 

 

Bhuwan Shrivastava¹, Pem Dechen Topgay², Pema Lhaden Topgay³, Lhaki Dema⁴, 

Sumita Dave⁵ 

¹ ² ³ ⁴ Royal Thimphu College, Thimphu, Bhutan 

¹ https://orcid.org/0009-0004-2114-3606, E-mail: bhuwanshrivastava@rtc.bt  

 ² https://orcid.org/0009-0001-4948-7222, E-mail: pemdtopgay@gmail.com 

 ³ https://orcid.org/0009-0001-7086-2920, E-mail: pemaltopgay@gmail.com 

 ⁴ https://orcid.org/0009-0009-5240-0042, E-mail: demalhaki24@gmail.com 

 ⁵ Amity University, Chhattisgarh, India 

https://orcid.org/0000-0002-3446-2727, E-mail: sdave@rpr.amity.edu  

 

Abstract: This study delves into the relationship between entrepreneurship and 

international business in Bhutan, a small, landlocked kingdom that primarily depends on 

agriculture and hydropower. It aims to assess the current state of entrepreneurship in Bhutan, 

explore the trends in international trade involving Bhutanese businesses, and pinpoint the 

challenges and opportunities that Bhutanese entrepreneurs face in the global market. By using 

secondary data involving the information pertaining to economic environment of Bhutan, the 

study reveals that Bhutanese entrepreneurs encounter significant obstacles to going global, 

such as limited access to finance, a shortage of skilled workers, and complex regulatory 

environments. However, there are opportunities in government policies that promote 

entrepreneurship and regional trade agreements. The study concludes with policy 

recommendations to better integrate Bhutanese entrepreneurial ventures into the global 

market, focusing on regulatory reforms, improved access to finance, and capacity-building 

initiatives. 

Keywords: Entrepreneurship, International business, Bhutan, Challenges, Opportunities 

 

1. INTRODUCTION  

1.1 Background and significance of the study 

Bhutan is a small landlocked kingdom nestled between two of the world's largest 

economies, India and China. Being completely landlocked and mountainous Bhutan has 

limited access to foreign markets due to which Bhutan heavily relies on India for its trade 

routes, making India a major trading partner. Bhutan's small domestic market and unfavorable 

resource endowment for industrialization mean that a significant portion of its population 

depends on primary sectors such as agriculture, forestry, and hydropower (Cheong, Bark & 

Jeong, 2015). Trade issues are not typically national policy priorities, reflecting the country's 

focus on holistic development over rapid industrialization (Cheong, Bark & Jeong, 2015). 

According to Warr (2012), historically, landlocked countries have been pessimistic 

about the scope for an export-oriented development strategy and often choose inward-looking 

development strategies. Hence, as a landlocked country with limited economic power, Bhutan 

https://orcid.org/0009-0004-2114-3606
mailto:bhuwanshrivastava@rtc.bt
https://orcid.org/0009-0001-4948-7222
mailto:pemdtopgay@gmail.com
https://orcid.org/0009-0001-7086-2920
mailto:pemaltopgay@gmail.com
https://orcid.org/0009-0009-5240-0042
mailto:demalhaki24@gmail.com
https://orcid.org/0000-0002-3446-2727
mailto:sdave@rpr.amity.edu


Bhuwan SHRIVASTAVA, Pem Dechen TOPGAY, Pema Lhaden TOPGAY, Lhaki DEMA, 

Sumita DAVE 

 

277 

 

has exhibited a passive attitude toward international trade (Cheong, Bark & Jeong, 2015). With 

a population of approximately 774,000 and a GDP of $2.84 billion, Bhutan is renowned for its 

unique development philosophy centered on Gross National Happiness (GNH) rather than 

Gross Domestic Product (GDP). This approach prioritizes sustainable and equitable socio-

economic growth, environmental conservation, cultural preservation, and good governance. 

However, achieving steady socio-economic growth has been a hurdle for the small 

kingdom with a largely underdeveloped trade sector and even more nascent engagement in 

international trade. Bhutan is heavily reliant on hydropower and tourism for revenue, leaving 

the country vulnerable to climate change and global pandemics or changes in tourism patterns. 

The World Bank reports that a decline in electricity production could lead to a 3-4 percentage 

point drop in GDP and a decrease in government revenue by approximately 0.5-1 percent of 

GDP (Razzaque, 2020). Additionally, due to travel restrictions imposed by COVID-19, tourism 

revenue fell drastically from $225 million in 2019 to $19 million in 2020 (Rinzin, 2021). 

Vijayasri (2013) states that international trade leads to economic growth and is important for 

achieving a quicker pace of economic development. 

Therefore, as Bhutan looks to restart its economy after COVID-19, improving 

international trade is essential for Bhutan's economic development. By participating in 

international trade, Bhutan can diversify its economy, lessen its dependence on a limited 

number of sectors, and improve its economic resilience. Studying the relationship between 

entrepreneurship and international trade in Bhutan can unlock new growth avenues, improve 

economic resilience, and contribute to the overall well-being of its population. This study aims 

to provide a comprehensive understanding of this nexus, offering actionable insights for 

entrepreneurs, policymakers, and other stakeholders to foster a vibrant and globally integrated 

entrepreneurial ecosystem in Bhutan. 

 

1.2 Research objectives and research questions 

1.2.1Research Objectives 

 Analyze the Current State of Entrepreneurship in Bhutan 

 Examine the Patterns and Trends of International Trade Involving Bhutanese 

Businesses 

 Identify the Challenges and Opportunities Faced by Bhutanese Entrepreneurs in the 

International Market 

 Assess the Impact of International Trade on Entrepreneurial Growth and Economic 

Development in Bhutan 

 Provide Recommendations for Policymakers to Support and Enhance the Nexus 

Between Entrepreneurship and International Trade 

1.2.2 Research Questions 

 What is the current landscape of entrepreneurship in Bhutan? 

 How are Bhutanese entrepreneurs participating in international trade? 

 What barriers do Bhutanese entrepreneurs face in accessing international markets? 

 What opportunities exist for Bhutanese entrepreneurs in the global market? 

 What role do government policies and trade agreements play in facilitating 

international trade for Bhutanese businesses? 



EXPLORING THE NEXUS BETWEEN ENTREPRENEURSHIP AND 

INTERNATIONAL BUSINESS: A CASE STUDY OF BHUTAN 

 

278 

 

 How does international trade influence the growth and success of entrepreneurial 

ventures in Bhutan? 

 What policy recommendations can be made to improve the nexus between 

entrepreneurship and international trade in Bhutan? 

 

1.3 Scope and limitations 

1.3.1 Scope  

This study focuses on exploring the relationship between entrepreneurship and 

international trade in Bhutan. The research will cover: 

 Entrepreneurial Landscape: Analysis of the current state of entrepreneurship, 

including key sectors, demographic characteristics, and the level of entrepreneurial 

activity. 

 International Trade Patterns: Examination of Bhutan's trade volumes, main products 

and services traded, and primary trade partners. 

 Challenges and Opportunities: Identification of barriers and opportunities for 

Bhutanese entrepreneurs in the international market. 

 Economic Impact: Assessment of the contribution of international trade to GDP, 

employment, innovation, and business growth in Bhutan. 

 Policy Analysis: Evaluation of existing policies and trade agreements, and formulation 

of recommendations for enhancing international trade and entrepreneurship. 

1.3.2 Limitations 

 Data Availability: The limited availability of comprehensive and up-to-date data on 

Bhutanese entrepreneurship and trade activities may affect the depth of analysis. 

 Geographical Focus: The study is confined to Bhutan, and findings may not be 

generalizable to other countries with different economic and trade contexts. 

 Time Constraints: The conduction of the study over a few months may limit the depth 

and accuracy of the findings. 

 Resource Limitations: Limited resources may restrict the extent of fieldwork case 

studies conducted. 

 

2. LITERATURE REVIEW  

2.1 Theoretical framework: Linkages between entrepreneurship and international 

business 

The connection between entrepreneurship and international business in Bhutan is 

extremely important owing to Bhutan’s unique economic landscape due to its geographic 

location, economic dependencies and policy priorities centered around Gross National 

Happiness (GNH). This review aims to delve into theoretical frameworks, the entrepreneurial 

ecosystem, factors influencing international business, and existing studies to provide a 

comprehensive understanding of the challenges and opportunities for Bhutanese entrepreneurs 

in the global marketplace. 

We must be familiar with several theoretical perspectives to understand the connection 

between entrepreneurship and international business. One such perspective is the Resource-



Bhuwan SHRIVASTAVA, Pem Dechen TOPGAY, Pema Lhaden TOPGAY, Lhaki DEMA, 

Sumita DAVE 

 

279 

 

Based View (RBV), which argues that businesses can achieve success in global markets by 

leveraging their unique resources and capabilities (Barney, 1991). This implies that Bhutanese 

entrepreneurs should focus on developing and utilizing their strengths to compete effectively 

on the international stage. Additionally, another theory that highlights this is the comparative 

advantage theory which states that nations should specialize in productions that result in lower 

opportunity costs to drive efficient international trade (Boyce, 2023). 

Another relevant theoretical framework is the Uppsala Internationalization Model, 

which proposes that businesses gradually expand their international operations, starting with 

markets closer to home and then progressing to more distant ones as they gain experience and 

knowledge (Johanson & Vahlne, 1977). The Uppsala Model is relevant to Bhutanese businesses 

because it suggests a gradual approach to international expansion by starting with neighbouring 

markets (e.g., India) and progressively venturing into more distant markets based on experience 

and market knowledge. 

Next, the Network Theory emphasizes the importance of social networks and 

relationships in international business activities (Johanson & Mattsson, 1988). For Bhutanese 

entrepreneurs, building strong networks with international partners and stakeholders can 

provide valuable opportunities for market access and growth. 

There is also the Effectuation Theory which encourages entrepreneurs to embrace 

uncertainty, leverage their strengths and networks, and adopt a flexible and adaptive approach 

to entrepreneurship (Sarasvathy, 2001). This will guide Bhutanese entrepreneurs in navigating 

uncertain international business landscapes by focusing on creating opportunities, leveraging 

local strengths, and adapting to emerging market demands with creativity and resilience. 

 

2.2 Entrepreneurial ecosystem and internationalization 

An entrepreneurial ecosystem comprises of various elements such as access to funding, 

mentorship, supportive policies and a conducive regulatory environment (Isenberg, 2010). In 

Bhutan, the entrepreneurial ecosystem is evolving. Ura et al. (2012) highlight that "Bhutan's 

policies aligned with the Gross National Happiness (GNH) framework promote sustainable 

development, social entrepreneurship, and ethical business practices."  

There are also entrepreneur support organizations such as the Bhutan Innovation and 

Technology Centre (BITC) that provide resources and guidance to startups. As noted by 

Johanson and Mattsson (1988), "Mentorship programs and incubators within the 

entrepreneurial ecosystem play a pivotal role in fostering innovation and guiding entrepreneurs 

through challenges." 

Research suggests that a supportive entrepreneurial ecosystem is instrumental in 

facilitating internationalization for startups and small businesses (Acs, Szerb, & Autio, 2014). 

Access to finance, mentorship programs and networking opportunities can enable Bhutanese 

entrepreneurs to expand their businesses globally. However, "Internationalization is the process 

of increasing involvement in international operations, such as foreign markets, cross-border 

production, or global value chains, which may include exporting, importing, licensing, 

franchising, foreign direct investment, joint ventures, and strategic alliances" (Rugman & 

Collinson, 2012). It is a strategic imperative for Bhutanese businesses seeking to expand 

globally. According to Knight and Cavusgil (2004), "Internationalization allows Bhutanese 



EXPLORING THE NEXUS BETWEEN ENTREPRENEURSHIP AND 

INTERNATIONAL BUSINESS: A CASE STUDY OF BHUTAN 

 

280 

 

enterprises to diversify their customer base, reduce dependence on domestic markets, and tap 

into new revenue streams." 

Another important detail is that export opportunities contribute to economic growth. 

Cheong, Bark, and Jeong (2015) state that "Internationalization facilitates export opportunities 

for Bhutanese products and services, promoting economic development and industry growth." 

The aforementioned studies reiterate that fostering a strong entrepreneurial ecosystem 

and embracing internationalization are integral to Bhutan's economic development and global 

competitiveness. Collaborative efforts among stakeholders, supportive policies, and strategic 

initiatives are vital for empowering Bhutanese entrepreneurs to succeed in the dynamic global 

marketplace. 

 

2.3 Factors influencing international business activities in Bhutan 

Several factors influence international business activities in Bhutan. Geographical 

factors, such as Bhutan's landlocked status between India and China, impact trade routes and 

market access (Warr, 2012).  

Economic factors, such as dependence on hydropower and tourism, contribute to 

Bhutan's vulnerability to external shocks and market fluctuations (Razzaque, 2020; Rinzin, 

2021). Moreover, the World Bank (2019), suggests that the dependence on state-led 

hydropower might have resulted in crowding out of the private sector which indirectly impacts 

international trade. 

Government policies, particularly those aligned with the GNH philosophy, shape 

Bhutan's approach to international trade and investment (Ura et al., 2012).  

Cultural and institutional factors also play a role in influencing international business 

activities in Bhutan. Brooks (2013) states that "Understanding cultural preferences and social 

norms is essential for effective market entry and relationship building in Bhutan."  

Infrastructure development also influences trade and connectivity. Warr (2012) 

highlights that "Improvements in transportation networks and energy infrastructure can 

enhance Bhutan's trade capabilities and reduce logistical barriers." 

Trade policies and agreements also greatly help to shape Bhutan's trade relations. 

Cheong, Bark, and Jeong (2015) mention that "Bhutan's participation in regional trade 

agreements impacts market access and trade flows." 

 

2.4 Existing studies on entrepreneurship and international business in Bhutan 

Several studies have contributed to understanding entrepreneurship and international 

business in Bhutan. Cheong, Bark, and Jeong (2015) conducted a study on "Regional 

Cooperation and Trade Issues in Bhutan," highlighting the challenges and opportunities in 

regional trade partnerships. 

In their other study on Bhutan's trade policy titled “A Framework of Trade Policy for 

Bhutan Compatible with the Gross National Happiness”, Cheong, Bark, and Jeong (2015) 

emphasize the importance of joining global supply chains for economic gains. They also 

highlight that while Bhutan's trade policy should support Gross National Happiness (GNH) by 

balancing economic growth with social well-being, it is crucial for Bhutan to adopt economic 

reforms and trade liberalization to improve its international competitiveness. 



Bhuwan SHRIVASTAVA, Pem Dechen TOPGAY, Pema Lhaden TOPGAY, Lhaki DEMA, 

Sumita DAVE 

 

281 

 

Warr (2012) conducted research on the economic strategies of landlocked countries, 

including Bhutan. His study provides insights into the economic challenges and strategic 

approaches adopted by landlocked nations like Bhutan.  

Razzaque (2020) focused on the economic impact of hydropower on Bhutan's economy. 

The study discusses the significance of hydropower revenues in Bhutan's international trade 

and economic development.  

Ura, Alkire, and Zangmo (2012) explored the influence of Bhutan's Gross National 

Happiness (GNH) framework on economic policies. Their study delves into how GNH 

principles shape Bhutan's approach to international business and economic development. 

Brooks (2013) conducted research on cultural and institutional factors affecting 

business practices in Bhutan. The study provides insights into how cultural values and 

institutional frameworks influence entrepreneurship and international business activities. 

Knight and Cavusgil (2004) discuss market entry strategies for Bhutanese enterprises 

in their work on international business expansion. Their insights into market diversification 

and entry modes are relevant for Bhutanese businesses aiming to expand globally. 

Ayaji Fujita, Jigme Lhendup, and Sangay Thinley (2022) shed light on the significant 

administrative hurdles, financial constraints, and cultural barriers that hinder entrepreneurial 

activities in Bhutan in their study titled “Promoting Entrepreneurship in Bhutan”.  

Vijayasri (2013) explores the impact of globalization on Bhutanese businesses and 

strategies for building resilience in international markets. The study provides recommendations 

for enhancing business competitiveness and sustainability in a globalized context. 

These studies offer valuable insights, best practices and strategic recommendations for 

fostering economic growth, innovation, and sustainable development in the country. 

In conclusion, the literature review has explored how entrepreneurship and 

international business intersect, especially in Bhutan. We've looked at theories that connect 

entrepreneurship with global trade and how a strong entrepreneurial environment supports 

businesses going global. Factors like Bhutan's unique geography, economic dependencies, and 

policies focused on Gross National Happiness (GNH) have a significant impact on international 

business activities. The existing studies we've reviewed shed light on regional cooperation, 

economic strategies, and cultural influences on Bhutanese businesses. Bringing all this 

together, it's clear that leveraging technology, fostering innovation, and building strong 

international relationships are key for Bhutan's continued growth and success in the global 

business arena. 

 

3. METHODOLOGY  

3.1 Research Design and Approach  

This research utilizes a combination of descriptive analysis and macroeconomic 

evaluation to investigate the relationship between entrepreneurship and international business 

in Bhutan. The descriptive approach facilitates a comprehensive understanding of the 

relationship, while the macroeconomic assessment offers insights into broader economic 

patterns and elements affecting entrepreneurship and business within the country. 

 

3.2 Data Collection Methods  



EXPLORING THE NEXUS BETWEEN ENTREPRENEURSHIP AND 

INTERNATIONAL BUSINESS: A CASE STUDY OF BHUTAN 

 

282 

 

This study's data collection process exclusively utilizes secondary data obtained 

through a comprehensive review of relevant government documents, case analysis, 

departments official reports, and research publications. These resources provide quantitative 

information on Bhutan's trade dynamics, governmental policies, and entrepreneurial landscape. 

By utilising secondary data, the research benefits from an extensive examination of existing 

studies and macroeconomic indicators. 

 

3.3 Sampling Techniques and Data Sources  

As the research relies on secondary data, no primary data collection was undertaken. 

Instead, information was gathered from diverse international and national sources, including 

publications from the World Bank, Asian Development Bank, and Bhutanese governmental 

bodies, as well as academic research focused on Bhutan's economy and international business. 

 

3.4 Data Analysis Techniques  

The collected data were analysed using macroeconomic metrics such as GDP 

expansion, trade quantities, and economic sector contributions. Visual representations and 

charts depicting trade patterns were sourced from various governmental publications and 

official websites. The analysis also included an evaluation of Bhutan's trade policies, trade 

agreements, and entrepreneurial environment to identify patterns, obstacles, and prospects for 

enhancing international business activities. 

 

4. ENTREPRENEURSHIP LANDSCAPE IN BHUTAN 

4.1 Overview of the entrepreneurial ecosystem 

Bhutan's entrepreneurship ecosystem has been progressively growing, reflecting the 

nation's aspirations to expand its economic base beyond conventional industries like 

hydropower and agriculture. The ecosystem includes a blend of educational institutions, 

government agencies, non-profit organizations, and private sector players who collectively 

contribute to fostering entrepreneurship. Initiatives like the Springboard Programme and the 

establishment of the Startup Centre are pivotal in providing necessary skills and mentorship to 

aspiring entrepreneurs (UNDP, 2024).Despite the increasing number of incubators, co-working 

spaces like the inaugural startup centre, and startup competitions, encouraging young people 

to view entrepreneurship as a fulfilling career option remains a challenge. This cultural hurdle 

is reinforced by conventional family settings that often do not see entrepreneurship as a viable 

professional path (Daily Bhutan, 2024). Businesses in Bhutan are categorized based on their 

investment levels and workforce size: 

 Small Industries: Investments of Nu 1 million to Nu 10 million (≈$13,000–$130,000) 

and employ 5 to 19 people. 

 Cottage Businesses: Investments of less than Nu 1 million (≈$13,000) and employ up 

to 4 people.  

This categorization helps structure the support and resources provided to businesses at 

different stages of development. The government's efforts to create a conducive environment 

for entrepreneurship are evident in initiatives like the G2B (Government to Business) portal, 

which simplifies the business registration process for small and cottage industries (G2B, n.d.). 



Bhuwan SHRIVASTAVA, Pem Dechen TOPGAY, Pema Lhaden TOPGAY, Lhaki DEMA, 

Sumita DAVE 

 

283 

 

Moreover, programs like the Springboard Programme and the Loden Entrepreneurship 

Programme (LEP) provide essential skills, mentorship, and financial support to young 

entrepreneurs, helping them navigate the entrepreneurial landscape and make their startups 

investment-ready (EBhutan, 2024). These initiatives indicate a supportive ecosystem, although 

more efforts are needed to foster a culture that fully embraces entrepreneurship as a career 

choice. Moreover, Bhutan lacks investors and targeted financial institution packages for 

financial support that can give entrepreneurs access to finance. Getting funding is still one of 

the largest obstacles in business development, regardless of the stage at which a company is 

founded or is growing and expanding (ITC, n.d.). 

 

4.2 Government policies and initiatives promoting entrepreneurship 

Entrepreneurship is vital for economic growth, innovation, and job creation, and the 

Bhutanese government has recognized this importance. Several laws and programs have been 

enacted to encourage economic diversification and support entrepreneurship. 

The government has established Industrial Estate zones in districts such as Samtse, 

Gelephu, Samdrup Jongkhar, Mongar, Tsirang, and Thimphu. These zones provide land, 

electricity, and water, creating a conducive environment for new and innovative ventures. 

Additionally, special fiscal incentives are offered, and these zones benefit from better market 

access due to their proximity to neighboring India. 

The Ministry of Industry, Commerce, and Employment (formerly the Ministry of Labor 

and Human Resources) has initiated various programs to promote entrepreneurship awareness 

and development. These include: 

 EDP Training: Conducted with Dzongkhags, NGOs, and other institutions to foster 

entrepreneurial skills. 

 Student Business Seedling Programme: Encourages young students to explore 

entrepreneurship. 

 Training of Trainers in New Business Creation: Builds capacity among trainers to 

support new entrepreneurs. 

 Counseling and Mentoring: Provides guidance and support to budding entrepreneurs. 

 Start-Up Weekend: An event to brainstorm and develop business ideas. 

 Business Idea Competition of Bhutan: Encourages innovation and recognition of 

creative business ideas. 

 Expanding Horizons, A guide for export growth from Bhutan to Australia: is an 

initiative by the Ministry of Foreign Affairs and External Trade to help Bhutanese 

export to Australia by using the success of Bhutan Blossoms as a guideline.  

The government also supports entrepreneurs through collaborations with organizations 

like the Loden Foundation. The Loden Foundation provides funding, mentorship, and capacity-

building programs. They organize events such as the Festival of Entrepreneurs in October, in 

place of Global Entrepreneurship Week, in collaboration with national and international 

agencies (Bhutan Foundation, 2019). Overall, these policies and initiatives reflect the 

government's commitment to creating an environment that fosters entrepreneurship, supports 

small enterprises, and drives economic diversification. 

 



EXPLORING THE NEXUS BETWEEN ENTREPRENEURSHIP AND 

INTERNATIONAL BUSINESS: A CASE STUDY OF BHUTAN 

 

284 

 

4.3 Support organizations and networks for entrepreneurs 

Several organizations and foundations support entrepreneurs with relation to financing, 

training, and different programs associated with the building of one’s capability in Bhutan. 

Some of the most prominent associations and networks are as follows: 

i. Bhutan Innovation and Technology Centre (BITC) and the Bhutan Innovation and 

Technology Foundation (BITF): For the support of Startups in Bhutan, there are new 

policies and favorable environment exists such as the Bhutan Innovation and Technology 

Centre (BITC) and the Bhutan Innovation and Technology Foundation (BITF). These 

institutions assist those willing to bring their ideas to practice by availing of incubation 

funding and mentorship services (Jain Kai, 2023). (Jain Kai, 2023).  

ii. Loden Foundation: The Loden Foundation is a Registered Civil Society Organization in 

Bhutan (CSO) and has been in business since 1999. The foundation initially started as an 

education support group but later supported the ones who studied from Loden 

Foundation’s funding to become successful entrepreneurs through entrepreneur education 

and funding. Loden Foundation also has a program named Student Empowerment through 

Entrepreneurship Development (SEED) to empower students to learn about 

entrepreneurship (Tradition, n.d.) 

iii. Bhutan CSI Association: An association known as Bhutan CSI Association was established 

by a group of Startups to further advance and develop the cottage and small industries, or 

CSIs, in the country. The main goal of having this association is to inform the Government 

of the actual needs of CSI entrepreneurs and recommend implementing policies that help 

the startups build innovative and robust CSI ecosystems (Dekar, 2023). 

iv. Startup First: CEFE (Competency-based Economies through Formation of Entrepreneurs) 

Bhutan’s Startup First institute provides training for entrepreneurs, conducts research, and 

offers advisory services to teen entrepreneurs. It also offers capacity development courses 

for start-up ecosystem stakeholders (CEFE International – Glimpses of Entrepreneurship 

in Bhutan, 2023). 

v. Bhutan Chambers of Commerce and Industry: Bhutan Centre for Entrepreneurs and 

Innovators is a non-governmental organization with the vision of promoting 

entrepreneurship in Bhutan which was set up with the blessing of H.M the King in 1980. 

Another strategic vision of BCCI is about promoting entrepreneurship since it provides 

human capital development in the private sector (About Us, n.d.). 

vi. Druk Holding and Investment (DHI): Druk Holding and Investment provides support to 

organizations and networks of business-oriented through the usage of many programs 

where DHI funds programs like the Business Acceleration Program (BizAP) under which 

DHI grants Nu. 500,000 to the entrepreneurs who took part in the acceleration program. 

This program was developed to assist new businesspersons in establishing networks with 

professionals in the business industry and getting to understand the proper way of running 

their business ventures (Zangmo, 2019). 

4.4 Challenges and opportunities for entrepreneurs in Bhutan 

Challenges: 

i. Financial Constraints: Entrepreneurs face significant challenges in securing funding, 

regardless of their business stage. Bhutan lacks targeted financial institution packages and 



Bhuwan SHRIVASTAVA, Pem Dechen TOPGAY, Pema Lhaden TOPGAY, Lhaki DEMA, 

Sumita DAVE 

 

285 

 

investors willing to support startups. A survey was done of 133 people who attended the 

entrepreneurship program held by Thimphu Tech-Park In 2016-2017 and the result showed 

that some of the young minds could not become an official entrepreneur due to the lack of 

necessary funding (Singh et al., 2020) 

ii. Lack of financial incentives and no weak relations with the banks: Singh et al. (2020) did 

some research on other research papers and in that research, it was found that individuals 

who failed at starting a business were mainly due to having no connection with the banks 

and insufficient financial initiatives by the Government.  

iii. Entrepreneurship and career choice: In a study involving 921 students from different 

educational institutions in Bhutan, showed that there is a greater number of students 

wanting to acquire government jobs despite the problem of unemployment rising in the 

country. This is mainly due to the lack of emphasis on entrepreneurship education and poor 

instructional strategies in the education curriculum (Utha et al., 2016). While there are 

opportunities for training and coaching during the initial phases, there is limited support 

for scaling businesses.  

Opportunities: 

i. Supportive Ecosystem: The growing number of incubators, co-working spaces, and startup 

competitions indicate a supportive ecosystem for entrepreneurs (EBhutan, 2024). Another 

opportunity lies in the different kinds of programs being held by the government of Bhutan 

to help individuals get employed and have training to improve their entrepreneurial skills 

and creativity. For example, the Ministry of Labor and Human Resources introduced a 

small cottage industry and start-up flagship program worth Nu. 1.2B (Lhamo, 2020). 

ii. Sectoral Focus: Sectors like agriculture, IT/ITES, and tourism offer significant 

opportunities for innovation and growth. Government initiatives like allowing 100% 

foreign ownership in agriculture highlight the potential in this area (MoIC, 2023).  

iii. Technological and Educational Integration: Programs focusing on digital skills and 

freelancing are opening new avenues for tech-based startups, further supported by 

infrastructure developments like Thimphu Techpark (Daily Bhutan, 2024). In addition, on 

9th February 2021 a Memorandum of Understanding was signed by the Department of 

Employment and Human Resources under the Ministry of Human and Labor Resources 

and the Royal Education Council under the Ministry of Education to incorporate 

entrepreneurship-related courses in the education curriculum (Bhattarai, 2021). 

iv. NEHUB and SAWDF: There are many forms of enhancing women's entrepreneurship and 

such form of opportunities are Nepal Entrepreneurs Hub (NEHUB) and South Asian 

Women Development Forum (SAWDF) whereby both of these interventions are related to 

policies and opportunities for women's entrepreneurship in the SAARC region (South 

Asian Association of Regional Corporation) which includes Bhutan as well (Goodrich et 

al., 2018). 

5. INTERNATIONAL BUSINESS ACTIVITIES IN BHUTAN  

5.1 Patterns and trends in international trade 

According to the United Nations Conference on Trade and Development (UNCTAD) 

(2024) report on key statistics and trends in international trade, the following has been 

observed:  



EXPLORING THE NEXUS BETWEEN ENTREPRENEURSHIP AND 

INTERNATIONAL BUSINESS: A CASE STUDY OF BHUTAN 

 

286 

 

i. Unpredictability and Division: 

Since the COVID-19 pandemic began, international trade has shown significant fluctuations. 

Trade dcreased sharply in 2020 but saw a robust recovery in 2021 and 2022, hitting 

unprecedented levels. However, trade growth reduced in 2023 due to geopolitical issues and 

economic instability. 

ii. Regional Differences: 

Trade performance has varied widely across regions. Developed countries saw a smaller 

decline in trade compared to developing nations. The European Union and the United States, 

in particular, showed stronger trade performance, whereas East Asia and other parts of Asia 

experienced larger setbacks. 

 

Figure 1. Global Trade Trends 

 
Source: (United Nations Conference on Trade and Development, 2024) 

 

iii. Regional Trade Agreements (RTAs): 

Trade within RTAs has generally been more stable. Agreements such as MERCOSUR, 

AfCFTA, USMCA, and intra-EU trade have performed better than trade outside these 

agreements. Nonetheless, intra-RTA trade performance has differed, with some agreements like 

CPTPP witnessing relatively poorer intra-regional trade. 

iv. Developing vs. Developed Countries: 

The share of trade between developing countries has grown significantly, from 17% in 

2010 to 21% in 2022. BRICS nations have a substantial share in global trade, particularly in 

goods and services. 

v. Commodities and Manufacturing: 

Intermediate goods form the largest share of world trade, followed by primary and 

consumer goods. Manufacturing trade dominates, especially among developed nations, while 

developing countries have a significant share in natural resources and agricultural exports. 

vi. Sector Performance: 

Sectors such as chemicals, communication equipment, and energy products (oil, gas, 

coal) represent a significant portion of global trade. Developing nations have increased their 

market shares in most sectors since 2015, although some sectors like energy have seen a shift 

back towards developed countries. 



Bhuwan SHRIVASTAVA, Pem Dechen TOPGAY, Pema Lhaden TOPGAY, Lhaki DEMA, 

Sumita DAVE 

 

287 

 

vii. Import and Export Tendencies: 

Many developing nations have high import and export tendencies, indicating significant 

dependence on international trade. Southeast Asian economies, Central and Eastern European 

countries, and several African countries are particularly export-dependent. 

viii. Trade Balances: 

In 2022, China, Russia, UAE, Ireland, and Saudi Arabia had the largest trade surpluses, 

while the United States had the largest trade deficit. Trade imbalances are relatively small in 

relation to GDP for most countries, but some African countries show large imbalances. 

ix. Export Diversification: 

Developing countries generally exhibit lower export diversification compared to 

developed countries. African nations, in particular, have highly concentrated export portfolios, 

making them more vulnerable to economic shocks. 

x. Patterns and Trends of Bhutan’s International Trade 

Import Trend: There was a steady increase in imports from 2020 to 2022, which indicates 

higher consumption or dependency on foreign goods. The slight decrease in 2023 could be due 

to import restrictions due to low foreign reserves in Bhutan.  

Export Trend: Exports showed an increasing trend until 2021, after which there was a 

decrease.  

Trade Deficit: The increasing trade deficit from 2020 to 2022 reflects the higher growth rate 

of imports compared to exports.  

 

Figure 2. Export trend of Bhutan by country and commodity. Trade deficit status of Bhutan 

 

  
Source: (Ministry of Finance, 2023) 



EXPLORING THE NEXUS BETWEEN ENTREPRENEURSHIP AND 

INTERNATIONAL BUSINESS: A CASE STUDY OF BHUTAN 

 

288 

 

5.2Analysis of Bhutan's trade partners and export-import commodities 

Export Patterns 

Dominance of India as a Trade Partner: 

India is by far Bhutan’s largest trading partner, both in terms of exports and imports. 

The export values to India are significantly higher than to any other country, underscoring the 

strong economic ties between the two nations. This reliance on India is evident across all years, 

with exports peaking at substantial amounts. Despite a noticeable dip in 2020, likely due to the 

global impact of the COVID-19 pandemic, exports to India quickly rebounded in subsequent 

years. This trend highlights the resilience and importance of the India-Bhutan trade 

relationship. 

Exports to Other Countries: 

While India remains the dominant partner, Bhutan also engages in trade with 

Bangladesh, Italy, Nepal, South Korea, and other countries. Exports to Bangladesh are the 

second largest, although they are significantly lower than those to India. The trade with other 

nations remains minimal, indicating limited diversification in Bhutan’s export markets. This 

lack of diversification can pose risks and opportunities for expanding Bhutan's trade network. 

Key Export Commodities: 

 55% of Silicon: This is Bhutan’s major export commodity, reflecting high export 

values consistently over the years. The significant dip in 2020 was followed by a quick 

recovery, indicating stable global demand. 

 Boulders: Another key export commodity, boulders show relatively stable export 

values, contributing significantly to Bhutan’s export portfolio. 

 Ferro-silico-manganese, Dolomite, and Other Commodities: These commodities 

have lower export values compared to silicon and boulders but are essential in 

diversifying Bhutan's export base. 

Import Patterns 

Heavy Reliance on India for Imports: 

Similar to exports, Bhutan’s imports are predominantly sourced from India. The import 

values from India far exceed those from any other country, reflecting a heavy dependence on 

India for various goods. This trend highlights the critical role of India in Bhutan’s trade 

dynamics. 

Imports from Other Countries: 

China emerges as a notable import partner, although the values are much lower 

compared to India. Imports from countries like France, Singapore, and Thailand are minimal, 

with some variation over the years. This pattern again points to limited diversification in 

Bhutan’s import sources. 

Key Import Commodities: 

 Other Light Oils and Preparations (HSD): This category is the largest import 

commodity, showing high import values each year. The dip in 2020, followed by a 

rebound, aligns with global economic trends during the COVID-19 pandemic. 



Bhuwan SHRIVASTAVA, Pem Dechen TOPGAY, Pema Lhaden TOPGAY, Lhaki DEMA, 

Sumita DAVE 

 

289 

 

 Ferrous Products and Motor Spirit (Gasoline): These are significant import 

commodities, showing variations that could reflect changes in global prices and 

domestic demand. 

 Semi-milled or Wholly Milled Rice: This commodity consistently shows notable 

import values, indicating its importance in Bhutan’s food security. 

 Other Commodities: Various other commodities contribute to the import basket, 

providing some level of diversification. 

Analysis of Trends 

 

Figure 3. Imports trend of Bhutan by country and commodity 

 
Source: (Ministry of Finance, 2023) 

Impact of COVID-19: 

The year 2020 shows a noticeable dip in both exports and imports, reflecting the global 

economic disruptions caused by the COVID-19 pandemic. However, Bhutan’s trade appears 

to have rebounded quickly, showcasing resilience in its trade practices. 

Heavy Dependence on India: 

Bhutan’s trade is heavily dominated by India, which poses both opportunities and risks. 

While the strong relationship with India provides a stable trade partner, it also makes Bhutan 

vulnerable to economic fluctuations in India and potential geopolitical tensions. 

Commodity Concentration: 

Bhutan’s exports are concentrated in a few key commodities, with silicon being the 

most significant. This concentration suggests limited diversification, which could be a risk if 

global demand for these commodities declines. Diversification into other sectors could enhance 

economic stability. 

Limited Market Diversification: 

While Bhutan engages in trade with several countries, the volumes are relatively small 

compared to India. Expanding trade relationships with other countries could provide new 

opportunities and reduce dependency on a single market. 

Stable Import Patterns: 

The import patterns show consistency in terms of key commodities like oil, ferrous 

products, and rice. These stable patterns indicate a steady demand for essential goods, 

highlighting areas where Bhutan may need to develop domestic alternatives to reduce import 

dependency. 



EXPLORING THE NEXUS BETWEEN ENTREPRENEURSHIP AND 

INTERNATIONAL BUSINESS: A CASE STUDY OF BHUTAN 

 

290 

 

5.3 Foreign direct investment (FDI) in Bhutan 

Foreign Direct Investment (FDI) refers to when a party invests in a business or 

corporation in a different country, aiming to establish a long-term stake or interest (Hayes, 

2024). In Bhutan, an FDI company is an entity incorporated under the Companies Act of the 

Kingdom of Bhutan, primarily for conducting commercial activities within the nation. This 

company must have a minimum of 20% equity held by foreign investors, with individual 

foreign investors required to own at least 10% equity. For foreign institutional investors, the 

FDI company must have at least 10% of its equity owned by such institutions (MoICE, 2023).  

 

Key Highlights of Bhutan's FDI Framework: 

i. FDI Policy Evolution: 

Bhutan introduced its first FDI policy in 2002, with significant revisions in 2010, 2014, 

and the latest in 2019. These revisions aim to create a more investor-friendly environment and 

adapt to changing economic conditions. The FDI Policy of 2019 notably emphasizes 

maximizing equity shareholding for foreign investors, allowing up to 49% participation in most 

sectors, while also permitting 100% foreign ownership in select high-priority sectors (MoICE, 

2023). 

ii. Sectoral Distribution: 

The distribution of FDI inflows in Bhutan reflects a strong focus on the service sector, 

which includes areas such as hospitality, information technology, and IT-enabled services. 

However, other sectors are also attracting FDI, including manufacturing, dairy, and agro-based 

projects. As per FDI Annual Report, 2023, the Department of Industry authorized 12 foreign 

investment projects worth BTN 7,606.95 million in 2023, out of which seven of the projects 

are in the service sector, and five are in the manufacturing sector, highlighting the diverse 

opportunities for investment across various industries. 

 

Figure 1. No. of FDI projects approved over the years 

 
Source: MoICE, FDI Annual Report (2023) 

 

 



Bhuwan SHRIVASTAVA, Pem Dechen TOPGAY, Pema Lhaden TOPGAY, Lhaki DEMA, 

Sumita DAVE 

 

291 

 

The total number of FDIs as of 2023 is 108 projects, in which India remains the major 

source of investment in Bhutan with a 57 % share followed by Singapore (13 %) and Thailand 

(10 %). In this overall, Asia accounts for over 65% of foreign investors, followed by Europe 

(17%) and America (11%) (MoICE, 2023). 

 

Figure 2. Part of foreign investors 

 
Source: MoICE. FDI Annual Report (2023) 

 

iii. Investment Incentives: 

To attract foreign direct investment (FDI), Bhutan offers several incentives that create 

a favorable investment climate. These include a low-emission development environment, 

political stability, and transparency, along with subsidized electricity (Royal Bhutanese 

Embassy, n.d.). Additionally, the government has recently announced that it will allow 100% 

foreign ownership in the agriculture sector for FDI. This decision was made during the opening 

session of the Bhutan Agrifood Trade and Investment Forum (BATIF) 2024, highlighting the 

government's commitment to enhancing investment opportunities in key sectors (World Bank, 

n.d.). 

iv. Regulatory Framework: 

All businesses engaging in FDI must incorporate under the Companies Act of the 

Kingdom of Bhutan, which ensures that they comply with the local corporate governance 

standards. In 2019, the Ministry of Economic Affairs established an FDI Division specifically 

to promote investment and provide single-window services to investors. Whereby, under the 

FDI Policy 2019, a maximum equity shareholding of 49% is allowed to foreign investors by 

the government with a minimum project cost for small-scale production and manufacturing 

sectors set at Nu. 5 million (MoEA, 2019).   

v. Geographical Distribution and Employment: 

Foreign investment projects in Bhutan are primarily concentrated in the Chukha, Paro, 

and Thimphu Dzongkhags. As of December 2023, these projects directly employed 4,327 

Bhutanese individuals, with a gender distribution of 47% female and 53% male (Royal 

Bhutanese Embassy, n.d.; MoICE, 2023). The highest number of FDI received is in the hotel 

sector with 34.9 % followed by IT sector with 21.7% as per the FDI Annual report, 2023. 

 



EXPLORING THE NEXUS BETWEEN ENTREPRENEURSHIP AND 

INTERNATIONAL BUSINESS: A CASE STUDY OF BHUTAN 

 

292 

 

Figure 3. Sectoral share of FDI 

 
Source: MoICE. FDI Annual Report (2023) 

 

vi. Agriculture Sector Focus: 

To enhance the production of six key agricultural commodities—mandarin oranges, 

quinoa, rainbow trout, black pepper, asparagus, and strawberries—the government will allow 

100% foreign ownership in the agriculture sector. Bhutan has set ambitious targets to increase 

the agriculture sector's contribution to the GDP, aiming for $365 million in 2022, $625 million 

by 2029, and $854 million by 2034 (World Bank, n.d.).  

However, despite the conducive policy environment, Bhutan's FDI inflows have been 

relatively modest, averaging less than $20 million annually since 2010 (World bank, n.d.). 

However, Bhutan's unique selling points, such as its commitment to Gross National Happiness 

(GNH) and clean, green environment, offer a unique investment appeal. Bhutan's policies aim 

to attract responsible and sustainable investments that contribute to the country's long-term 

development goals. 

 

5.4 Trade policies and regulations affecting international business 

Bhutan's trade policies and regulations are designed to foster international business 

while maintaining sustainable development and economic stability. The key elements 

influencing international trade and business in Bhutan include its trade deficit, membership in 

regional trade agreements, and sector-specific regulations. 

Trade Deficit and Economic Overview 

Bhutan has consistently registered a trade deficit since 2008, primarily due to higher 

imports compared to exports. In 2023, Bhutan exported BTN 52.9 billion worth of goods and 

imported BTN 108.4 billion, resulting in a trade deficit of BTN 55.5 billion. The primary 

trading partner is India, which accounts for over half of Bhutan’s total exports and nearly 80% 

of its imports. Other significant trade partners include Bangladesh, Italy, Nepal, China, 

Singapore, and Thailand (Lloyds Banks, 2024). 

 

Trade Policies and Regulatory Framework 

Bhutan’s trade policies are influenced by several regulatory frameworks: 



Bhuwan SHRIVASTAVA, Pem Dechen TOPGAY, Pema Lhaden TOPGAY, Lhaki DEMA, 

Sumita DAVE 

 

293 

 

i. Customs Rules and Regulations of Bhutan: Revised Edition 2023: 

The Customs Rules and Regulations of Bhutan govern the import and export of goods, 

ensuring adherence to both national and international standards. These regulations include 

various provisions related to the valuation, classification, and clearance of goods, as outlined 

by the Ministry of Finance (MoF, 2023). 

In accordance with the Customs Duty Act of Bhutan 2021, customs duty is levied on 

imported goods during international business. This duty is applicable during the importation 

process, reinforcing the need for compliance with established customs regulations to facilitate 

smooth trade operations. 

ii. Bhutan Trade Information Portal (BTIP): 

The BTIP provides essential trade information, including market analysis, export-

import procedures, and strategic resources for entrepreneurs. It serves as a one-stop-shop for 

all trade-related information and is managed by the Ministry of Economic Affairs (MoE, 2023). 

iii. Sector-specific policies: 

The government of Bhutan has introduced various sector-specific policies to enhance 

economic growth and development. In the agriculture sector, the government has recently 

allowed 100% foreign ownership, which aims to boost production of key commodities. This 

initiative is a part of the broader goal to increase the sector’s contribution to GDP (World Bank). 

In addition, the service and manufacturing sectors have also seen significant 

developments. In 2023, 12 foreign investment projects worth BTN 7,606.95 million were 

authorized, with a significant focus on the service sector (hotels, IT/ITES) and manufacturing 

(MoICE, 2023). These initiatives reflect the government’s commitment to attracting foreign 

investment and fostering growth in key industries. 

iv. Investment Regulations 

Foreign Direct Investment (FDI) in Bhutan is governed by the FDI Policy 2019 and the 

Companies Act, some of the rules include minimum of 20% equity must be held by foreign 

investors in FDI companies.Specific incentives for various sectors, including full foreign 

ownership in high-priority areas like agriculture and IT services (MoICE).  

v. Regional and International Trade Agreements 

Bhutan is a member of several regional trade agreements which facilitate international 

business, whose ruels and regulations also apply when engaging in international trade: 

 South Asian Association for Regional Cooperation (SAARC) 

 Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation 

(BIMSTEC) 

 Agreement on South Asian Free Trade Area (SAFTA) 

 Soon World Trade Organization (WTO) 

These memberships aim to enhance economic cooperation and trade liberalization 

within the region, offering Bhutan access to larger markets and potential trade benefits (Lloyds 

Banks, 2024). 

 

5. Analysis and Findings  

 



EXPLORING THE NEXUS BETWEEN ENTREPRENEURSHIP AND 

INTERNATIONAL BUSINESS: A CASE STUDY OF BHUTAN 

 

294 

 

Identification of key factors influencing the relationship between entrepreneurship and 

international business in Bhutan 

As per the data analysed from various sources, the key factors influencing the 

relationship between entrepreneurship and international business in Bhutan can be classified 

into two categories i.e. from the side of the entrepreneurial environment and the international 

trade environment: 

 

Figure 4. Prepared by group. Venn diagram on key factors influencing the relationship between 

entrepreneurship and international business in Bhutan 

 
 

7. Discussion  

7.1 Synthesis of findings and comparison with existing literature 

The study reveals multiple issues that entrepreneurs in Bhutan face, which align with 

findings from existing literature. According to Fujita, Lhendup, and Thinley (2022), challenges 

faced by entrepreneurs in Bhutan are related to the complex and lengthy process of establishing 

businesses, difficulty in accessing finance, and lack of entrepreneurial mindset with many 

preferring government jobs. 

Furthermore, Bhutan's ranking of 89th out of 190 countries in the Ease of Doing 

Business (EOB) index, as reported by the World Bank (2020), shows the presence of complex 

government regulations and procedures. These factors contribute to a challenging business 

environment characterized with complex administrative procedures, difficulty in accessing 

finance, and a lack of business culture. The importance of nurturing an entrepreneurial mindset 

is emphasized by Cooney (2012), asserting that having an entrepreneurial mindset and 

upskilling is important for business growth. The OECD SME and Entrepreneurship Outlook 

Report (2019) further highlights the significance of nurturing an entrepreneurial culture to drive 

innovation and economic growth. 

Access to capital remains a critical challenge for entrepreneurs, as noted by the Asian 

Development Bank (2022). They identified that lengthy loan processes and difficulties in 

accessing credit facilities hinder financial support for businesses in the country. According to 

Dolkar (2022), small and medium enterprises (SME) have complained of needing to know the 

bank officials personally to get the loans sanctioned during the sensitization of credit lending 



Bhuwan SHRIVASTAVA, Pem Dechen TOPGAY, Pema Lhaden TOPGAY, Lhaki DEMA, 

Sumita DAVE 

 

295 

 

schemes between private sectors and financial institutions meeting in July, 2022. This aligns 

with the observations made by Giudici, Sannajust, and Auken (2021), who state that access to 

finance is essential, as SMEs play a significant role in the international business landscape. 

Lastly, logistical issues present another hurdle for businesses in Bhutan. Warr (2012) 

points out that landlocked countries historically face challenges in adopting export-oriented 

development strategies, often resorting to inward-looking approaches. Supporting this, 

Business Bhutan (2019) states that the lack of railways and waterways, huge dependency on 

Port of Kolkata, limited air travel poses hurdles to businesses in Bhutan. Overall, these findings 

highlight the interconnected challenges that must be addressed to foster a more conducive 

environment for entrepreneurship and international business development in Bhutan. 

 

7.2. Implications for entrepreneurship and international business development in Bhutan 

The findings reveal that there are multiple hurdles for initial business establishment and 

then for that business to grow and become internationally capable. If no interventions are 

carried out, the development of entrepreneurship and its contribution to economic development 

may continue to be very little. Cooney (2012) states that the relevance of entrepreneurship to 

economic development has been established by multiple studies. Entrepreneurship drives 

innovation, creates jobs, and fosters economic growth. In the context of Bhutan, overcoming 

these hurdles is crucial to harness the potential of entrepreneurship for national development. 

Regulatory challenges pose significant obstacles, as complex and lengthy processes of 

establishing businesses and accessing finance create barriers for entrepreneurs. Without 

regulatory reforms that simplify and streamline these processes, new businesses may struggle 

to survive, limiting their ability to grow and expand into international markets. More 

entrepreneur-friendly regulatory reforms are essential to create a more conducive environment 

for business operations.  

Financial accessibility is another critical issue, as many entrepreneurs face difficulty in 

securing the capital needed to start or expand their business. Without improvements in financial 

accessibility, many potentially viable business ideas may never materialize. Policies that 

facilitate easier access to credit and financial resources are necessary to foster entrepreneurial 

ventures. The lack of an entrepreneurial mindset and preference for government jobs over 

entrepreneurship stifle innovation and business creation. Fostering an entrepreneurial culture 

through education and awareness programs can encourage more individuals to consider 

entrepreneurship as a viable career path. Developing entrepreneurial skills at an early stage 

through educational reforms will be key to shifting societal perceptions.  

Inadequate infrastructure and logistical challenges hamper the ability of businesses to 

operate efficiently and engage in international trade. Improving transportation networks, digital 

infrastructure, and connectivity are essential to enhance connectivity and reduce the cost and 

time of doing business. Government support is crucial for addressing challenges related to 

regulations and international trade. Complex government regulations and insufficient 

knowledge among officials can discourage both local and international business activities. 

Government support in the form of trade agreements, export advisory services, and 

participation in international trade organizations can help businesses overcome these 

challenges and access new markets while boosting their competitiveness. 



EXPLORING THE NEXUS BETWEEN ENTREPRENEURSHIP AND 

INTERNATIONAL BUSINESS: A CASE STUDY OF BHUTAN 

 

296 

 

Finally, the availability of a skilled workforce is another significant hurdle. Many 

businesses struggle to find employees with the necessary skills to meet their needs. Providing 

vocational training and skill development programs aligned with industry demands can ensure 

that the workforce meets the demands of modern businesses and supports their growth and 

internationalization. 

 

7.3 Policy recommendations for promoting the internationalization of Bhutanese 

entrepreneurial ventures  

i. Regulatory Reforms 

Simplify and streamline business registration and licensing processes by adopting best 

practices from countries like Singapore, which consistently ranks among the top five in the 

Ease of Doing Business (EOB) index. Singapore’s “GoBusiness Licensing” portal offers a 

single registration window for new business registration and fee payments, providing a 

seamless experience for entrepreneurs. In addition, Singapore’s corporate income tax (CIT) at 

17%, one of the lowest in the world, has contributed to establish its pro-business environment, 

benefiting local businesses and attracting international businesses (World Bank, 2019). 

In contrast, Bhutan’s CIT stands at 30% for fully tax-liable firms and 25% for limited 

tax-liable companies, which may discourage business growth. Therefore, the government could 

explore reducing CIT to encourage business establishments and allow firms to retain larger 

profits. This would enable companies to increase retained earnings, facilitating growth, 

expansion, or reinvestment in research and development. 

ii. Development of entrepreneurial mindset and capacity building  

Incorporate entrepreneurial studies into the national syllabus to foster an 

entrepreneurial mindset from an early stage. Additionally, provide seminars, training programs, 

and mentorship opportunities to equip individuals with practical skills and knowledge. 

Furthermore, popularize success stories of Bhutanese entrepreneurs, such as Bhutan Blossoms, 

to inspire and motivate aspiring entrepreneurs.  

iii. Sensitization of relevant government agencies 

Improve coordination and efficiency, by making it mandatory for relevant government 

agencies to meet regularly and collaborate. Additionally, establishing a common web portal 

will streamline access to information and provide updates on any changes in service delivery 

rules. Furthermore, setting up an entrepreneurship development and international trade office, 

along with a customer complaints division, to address discrepancies and ensure seamless access 

to trade-related information.  

iv.Enhance Financial Accessibility  

Develop specialized financial products for SMEs and startups, and establish 

government-backed loan guarantee schemes like the National Credit Guarantee Scheme 

launched during the pandemic but later discontinued (Dolkar, 2023). 

v. Launch more initiatives like the Expanding Horizons guidebook 

vi. Skill Development Programs 

Offer vocational training aligned with industry needs and foster collaborations between 

educational institutions and businesses. 

 



Bhuwan SHRIVASTAVA, Pem Dechen TOPGAY, Pema Lhaden TOPGAY, Lhaki DEMA, 

Sumita DAVE 

 

297 

 

8. CONCLUSIONS  

8.1 Summary of the study's key findings 

The study revealed several factors contributing to Bhutan’s 89th position in the Ease of 

Doing Business (EOB) ranking out of 190 countries. Key challenges include complex 

government regulations, coupled with a lack of awareness among government officials. 

Limited access to finance and inadequate infrastructure, compounded by the country’s 

geographical challenges, further restrict business growth. Additionally, there is a shortage of a 

skilled workforce and an entrepreneurial mindset, limiting innovation. Moreover, Foreign 

Direct Investments (FDIs) are predominantly concentrated in the hotel sector, signaling a need 

to diversify investments. The study emphasizes the importance of policy reforms and enhanced 

capital access avenues to facilitate entrepreneurial growth and facilitate international trade. 

 

8.2 Contributions to the Field of Entrepreneurship and International Business 

This research makes several significant contributions to the fields of entrepreneurship 

and international business. It applies both case studies and comparative analysis to provide 

insights by drawing parallels between Bhutan’s entrepreneurial landscape and those of other 

economies. Through longitudinal studies, the research tracks changes and trends in trade 

balance and economic growth, offering a broader understanding over time. It also sheds light 

on the entrepreneurial ecosystem of small developing economies like Bhutan, revealing how 

regulatory, financial, and cultural factors shape these ecosystems. 

Moreover, the study identifies key barriers hindering business growth and 

internationalization, such as complex regulations, limited financial access, logistical issues, and 

a lack of entrepreneurial mindset. With these, policy recommendations which can be used to 

stimulate entrepreneurship and facilitate international business development include, 

simplifying regulatory processes, improving financial accessibility, promoting entrepreneurial 

culture, and developing infrastructure to support business growth. In addition, the importance 

of financial accessibility for small and medium enterprises (SMEs) is also highlighted, with 

suggestions for improving credit availability and fostering financial inclusion. The study 

underscores the need for education reforms to integrate entrepreneurship at all stages, thereby 

nurturing an entrepreneurial mindset from an early stage. Furthermore, briefly highlights the 

impact of government policies on entrepreneurship, evaluating the existing regulatory 

environment and system.  

 

8.3 Suggestions for Future Research 

This study identifies several areas for future research. Future studies with proper data 

collection can help strengthen the understanding of the link between entrepreneurship and 

international business in Bhutan. Additionally, the impact of regional trade agreements on 

Bhutan’s international trade dynamics along with the effects of specific government policies, 

such as high taxation, on entrepreneurship and trade can be further examined. Another scope 

for future research involves analyzing how FDIs influence Bhutan’s trade and entrepreneurial 

environment, helping policymakers craft more effective strategies to attract and manage 

foreign investments. 

 



EXPLORING THE NEXUS BETWEEN ENTREPRENEURSHIP AND 

INTERNATIONAL BUSINESS: A CASE STUDY OF BHUTAN 

 

298 

 

REFERENCES 

1. Asian Development Bank. (2022, April). Asian development outlook 2022: Mobilizing 

taxes for development. adb.org/sites/default/files/publication/784041/ado2022.pdf 

2. Bhutan Foundation. (2019, October 30). Made in Bhutan: Entrepreneur stories by 

Loden Foundation celebrates 10th anniversary. bhutanfound.org/made-in-bhutan-

entrepreneur-stories-by-loden-foundation-celebrates-10th-anniversary/ 

3. Business Bhutan. (2019, February 5). Private sector beset with challenges. Business 

Bhutan. businessbhutan.bt/private-sector-beset-with-challenges/ 

4. Cheong, I., Bark, T., & Jeong, H. Y. (2015). A framework of trade policy for Bhutan 

compatible with the gross national happiness. Asian Development Bank. 

adb.org/sites/default/files/publication/174813/south-asia-wp-039.pdf 

5. Cooney, T. M. (2012). Entrepreneurship skills for growth-oriented businesses. Dublin 

Institute of Technology. oecd.org/cfe/leed/cooney_entrepreneurship_skills_HGF.pdf 

6. Daily Bhutan. (2024, June 10). What are the entrepreneurship programmes and 

initiatives available in Bhutan? dailybhutan.com/article/what-are-the-entrepreneurship-

programmes-and-initiatives-available-in-bhutan 

7. Dolkar, D. (2022, July 20). No credit facility for small and medium enterprises. 

Kuensel. kuenselonline.com/no-credit-facilities-for-small-and-medium-enterprises/ 

8. Dolkar, D. (2023, August 22). NCGS projects come to an end by this month. Kuensel. 

kuenselonline.com/ncgs-projects-come-to-an-end-by-this-month/ 

9. EBhutan. (2024, January 4). Empowering dreams and thriving startup ecosystem. 

entrepreneurbhutan.com/empowering-dreams-and-thriving-startup-ecosystem/ 

10. Giudici, G., Sannajust, A., & Auken, H. (2021). Special issue on small business 

financing: New actors, new opportunities, new challenges. Journal of Small Business 

Management, 59, 219-222. doi.org/10.1080/00472778.2020.1865540 

11. G2B. (n.d.). To obtain cottage registration certificate. Ministry of Economic Affairs. 

g2b.gov.bt 

12. Hayes, A. (2024, June 6). Foreign direct investment (FDI): What it is, types, and 

examples. Investopedia. investopedia.com/terms/f/fdi.asp 

13. ITC. (n.d.). Entrepreneurship ecosystem in Bhutan. itcbenchmarking.org/download-

file/789 

14. Lewis, S. (2015, April 4). Qualitative inquiry and research design: Choosing among 

five approaches. Sage Journals, 16(4). doi.org/10.1177/1524839915580941 

15. Lhamo, T. (2020, February 11). Multiple strategies in place to tackle youth 

unemployment. Business Bhutan. businessbhutan.bt/multiple-strategies-in-place-to-

tackle-youth-unemployment/ 

16. Ministry of Industry, Commerce and Employment (MoICE). (2023, March). Foreign 

direct investment rules and regulations 2012. moice.gov.bt/wp-

content/uploads/2023/03/FDI-RULES-REGULATIONS-2012-Amended-on-

December-30-2014.pdf 

17. Ministry of Industry, Commerce and Employment (MoICE). (2023, September). FDI 

annual report. industry.gov.bt/publications/annual-fdi-report-2023 



Bhuwan SHRIVASTAVA, Pem Dechen TOPGAY, Pema Lhaden TOPGAY, Lhaki DEMA, 

Sumita DAVE 

 

299 

 

18. Ministry of Economic Affairs (MoEA). (2019). Foreign direct investment policy 2019. 

Royal Government of Bhutan. bhutan.eregulations.org/media/FDI-Policy-2019.pdf 

19. Ministry of Finance, Bhutan. (2023). Bhutan trade statistics. 

https://www.mof.gov.bt/publications/reports/bhutan-trade-statistics/ 

20. Organisation for Economic Co-operation and Development (OECD). (2019). OECD 

SME and entrepreneurship outlook 2019. OECD Publishing. 

doi.org/10.1787/34907e9c-en 

21. Singh, E., Wangda, S., Khan, S., & Khan, S. (2020). Exploring the obstacles for start-

ups in Bhutan: From a prevented entrepreneur's perspective. International Journal of 

Innovation, Creativity and Change, 11(4), 70. 

ijicc.net/images/vol11iss4/11407_Singh_2020_E_R1.pdf 

22. Razzaque, M. (2020, May). Graduation of Bhutan from the group of least developed 

countries: Potential implications and polity imperatives. Working Paper Series, 

Macroeconomic Policy and Financing for Development Division. 

unescap.org/sites/default/files/publications/WP_20_04%20Bhutan%20Graduation_Po

tential%20implications%20and%20policy%20imparatives.pdf 

23. Royal Bhutanese Embassy, Dhaka, Bangladesh. (n.d.). Investment opportunities in 

Bhutan. mfa.gov.bt/rbedhaka/business-opportunities/ 

24. Rinzin, Y. (2021). A cursed year for the tourism sector. Kuensel Online. 

kuenselonline.com/a-cursed-year-for-the-tourism-sector/ 

25. United Nations Conference on Trade and Development. (2024). Key statistics and 

trends in international trade 2024. unctad.org/system/files/official-

document/ditctab2024d1_en.pdf 

26. United Nations Development Programme (UNDP). (2024, June 6). Springboard 

Programme celebrates its 2024 cohort. undp.org/bhutan/news/springboard-

programme-celebrates-its-2024-cohort 

27. Utha, K., Rinchen, S., Gurung, B., Gurung, G., Rabgay, T., & Dorji, C. (2016). 

Entrepreneurship education in Bhutan: Perception, culture and challenges. World 

Journal of Educational Research, 3(2), 460. doi.org/10.22158/wjer.v3n2p460 

28. Vijayasri, G. (2013). The importance of international trade in the world. International 

Journal of Marketing, Financial Services and Management Research, 2, 111-119. 

scirp.org/reference/referencespapers?referenceid=3189848 

29. World Bank. (n.d.). Bhutan policy notes - Attracting foreign direct investment. 

openknowledge.worldbank.org/server/api/core/bitstreams/192484c3-dd5f-5360-8710-

313d9967fb74/content 

30. World Bank Group. (2020). Doing business 2020. 

openknowledge.worldbank.org/bitstream/handle/10986/32436/9781464814402.pdf 

31. World Bank. (2019). The World Bank in Singapore. 

worldbank.org/en/country/singapore/overview 


