AUS=Australia; BD=Brunei Darussalam; CDA=Canada; CHL=Chile; PRC=China; HKC=Hong Kong, China; INA=Indonesia; JPN=Japan; ROK=Korea; MAS=Malaysia; MEX=Mexico; NZ=New Zealand; PNG=Papua New Guinea; PE=Peru; PHL=The Philippines; ; RUS=Russia; SGP=Singapore; CT=Chinese Taipei; THA=Thailand; USA=United States; VN=Viet Nam economy, as more accessible and efficient business settings affect informal actors’ decision to formalise (APEC PSU 2024a). A comprehensive policy package that includes simple and streamlined regulations, as well as a robust enforcement system, can create a conducive business environment (Ohnsorge and Yu 2022; APEC PSU 2024a), allowing businesses to operate confidently within the regulatory framework. Beyond regulatory simplification, the willingness of individuals and businesses to formalise of staying informal (Olomi et al. 2018; APEC PSU 2024a). To support this, it is crucial to balance well-designed policies with incentives for formalisation, for example, tax exemptions and preferential subsidies, which can help reduce the cost of formalisation and maintain Such efforts are particularly relevant to address Type 2 informality, where choosing the informal economy is perceived as a rational decision to maximise profits, and Type 3, where informality is the result of substantial bureaucratic barriers to enter the formal sector. 2.1.4. Limited financial and market access within the formal or informal economy (Capasso et al. 2022). Informal sector actors are often credit-constrained and face limited access to finance, an issue that is particularly relevant to