Business Impact Assessment


  • Another work focus of business facilitation is to encourage bureaux and departments (B/Ds) to assess the business impact before introducing new regulatory/licensing requirements so as to better take into consideration the operational circumstances and capacity of the trades and understand the costs associated with compliance of the regulatory requirements.

  • Through conducting business impact assessments (BIAs), B/Ds can grasp the concerns and compliance difficulties of the affected trades in complying with the regulatory proposals which will facilitate the B/Ds to enhance or fine-tune their regulatory proposals so as to avoid the introduction of unreasonable regulatory or licensing requirements and reduce the compliance cost without compromising public interests.

Business Impact Assessment Framework

  • The Government has developed a BIA framework to provide general guidelines to B/Ds to facilitate their systematic assessment of the business impact of their regulatory proposals on the business environment.

  • The different tasks under the different stages of the BIA Framework are depicted below -

Stages Tasks

Stage 1

Review of Government Intervention & Options

  • Understand problem, desired outcome and regulatory proposal
  • Review rationale for government intervention
  • Conduct research on overseas best practices and international standards
  • Identify options (e.g. non-regulatory option)

Stage 2

Assessment of Business Environment

  • Analyse industry / business structure and value chain
  • Assess affected business segments
  • Identify major business stakeholders groups
  • Design business consultation

Stage 3

Business Impact Assessment

  • Conduct business consultation
  • Assess benefits to business, compliance difficulties, cost of compliance and administrative burden
  • Assess impact on competition and small and medium-sized firms
  • Identify important issues from an industry perspective that the Government needs to consider or address
  • Identify key challenges faced by the industry on compliance issues and any unintended consequences

Stage 4

Consolidation of Assessment Results / Recommendations

  • Consolidate analysis of impact assessment findings
  • Propose changes to regulatory proposal (including recommendations on mitigation measures, enforcement strategy and approach, and monitoring and evaluation mechanism)

Business Compliance Cost (BCC) Framework

  • In addition, the Government has developed the Business Compliance Cost (BCC) Framework for assessing the additional compliance cost to be incurred from the regulatory proposals to facilitate B/Ds to estimate the BCC in a systematic and consistent manner.

  • An overview of the BCC Framework is as follows -

Business Compliance Cost
1. Administrative costs 2. Substantive costs 3. Financial costs
  • Additional internal staff costs associated with submission of paperwork to the Government
  • Additional cost associated with fees or expenses payable to third parties other than Government (e.g. engaging external consultant in the application process)
  • Additional cost associated with fees or expenses payable to the Government (e.g. licence fees)
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Last revision date: July 2023

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