Shadow entrepreneurship and its impact

In recent years, Bangladesh has witnessed a sharp rise in shadow entrepreneurship, mainly due to the growth of online and home-based businesses. Platforms like Facebook and Instagram have made it easier for people-especially students, women, and young entrepreneurs-to start ventures with only a very minimal amount of start-up capital. As a result, many sellers are earning well and becoming financially independent, which is a strong indicator of personal empowerment and increased online engagement.

However, most of these businesses operate informally; the majority of e-businesses are neither registered nor taxed, and they lack proper consumer protection and legal accountability. Although the entrepreneurs benefit individually, this trend is creating challenges for the national economy. When thousands of sellers avoid VAT and corporate taxes, the government is deprived of potential revenue that could be invested in development, infrastructure, and social services. In other words, while the personal economy of sellers is improving, the broader economy of Bangladesh is being weakened.

Another problem is the unfair competition faced by formally registered businesses. Firms that follow all rules and regulations, pay taxes, and maintain product standards, find it difficult to compete with unregistered sellers who bear none of these expenses. This imbalance discourages formal entrepreneurship and slows the country's transition toward a stable, transparent, and growth-oriented economy. Informal sellers also leave consumers unprotected due to the absence of accountability and quality assurance.

To address these concerns, the government should simplify the process of business registration, establish affordable tax rates for micro-entrepreneurs, and launch awareness campaigns on the long-term benefits of formalisation. Social media companies can also contribute by encouraging verified business pages and promoting transparent practices. Bringing shadow entrepreneurs into the formal system will not only safeguard consumers but also boost revenue generation and support the sustainable growth of Bangladesh's economy.

Rafida Moselemin khan

Student

BBA Department

North South University