Introduction: The business environment is a fundamental determinant of economic growth and is shaped by institutional, legal, infrastructural, and policy-related factors. Its quality influences investment, industrial development, and employment. Despite its natural and human resources, Kohgiluyeh and Boyer-Ahmad Province faces persistent structural challenges in improving its business environment. This study aimed to identify and rank the most significant barriers to business environment improvement in the province and provide relevant policy implications. Method: This applied study employed a quantitative descriptive-survey design. The statistical population comprised economic actors, investors, experts, managers involved in the business environment, and provincial residents. Stratified random sampling was used, with a sample size of 384 estimated using Cochran’s formula. Of more than 450 distributed questionnaires, 390 were returned, and 359 valid questionnaires were retained for analysis. Content validity was assessed by 10 experts across 62 items grouped into seven factors, yielding a Content Validity Index (CVI) of 0.793. Cronbach’s alpha was 0.705 in a pilot study of 30 participants. The KMO value was 0.902, and Bartlett’s test was significant, confirming sampling adequacy. Data were analyzed using descriptive statistics, the Friedman test, multiple regression, and Partial Least Squares Structural Equation Modeling (PLS-SEM). Findings: The Friedman test ranked perceived barriers from highest to lowest as follows: educational and health barriers (5.89), commercial and financial barriers (5.62), macroeconomic barriers (5.34), innovation and technological barriers (5.08), institutional barriers (4.41), provincial and regional barriers (3.27), and infrastructural barriers (2.39). However, the PLS-SEM results revealed a different pattern. Institutional barriers (β = 0.552) and provincial and regional barriers (β = 0.537) were the strongest predictors of business environment constraints, while the remaining dimensions showed weaker effects. The model explained 61.4% of the variance, indicating substantial explanatory power. Conclusion: The study reveals an important gap between actors’ perceived priorities and the structural effects of different barriers. Although institutional and provincial/regional barriers received relatively lower priority in the Friedman ranking, they emerged as the most influential constraints in the structural model. This discrepancy may reflect the gradual normalization of institutional barriers and their incorporation into everyday business practices. Accordingly, improving the provincial business environment requires greater attention to institutional reform, provincial and regional governance structures, and administrative capacity. Such reforms should be complemented by measures that increase awareness among economic actors and strengthen their capacity to identify and address structural constraints. These interventions can contribute to sustainable improvements in the business environment and support investment, employment, and economic development in the province.