Exchange control in the Kingdom of Lesotho is regulated under the Exchange Control of Order of 1987 and the Exchange Control Regulations of 1989. The regulating authority in this instance is the Central Bank of Lesotho.
These pieces of legislation were enacted in order to regulate dealings in the following:
- Foreign and local currency; and
- Security (in stocks and shares);
Foreign exchange in Lesotho can be defined as any currency, or means of payment, that is not legal tender in Lesotho. The South African Rand and any other Rand-denominated means of payment is not considered as foreign exchange since it circulates freely in Lesotho amid the Common Monetary Area (CMA) agreement. The CMA consists of countries such as the Republic of South Africa, the Republic of Namibia, the Kingdom of Eswatini and the Kingdom of Lesotho.
Money according to the Act is defined as foreign currency, bills of exchange or negotiable instruments. Security however is defined as “shares, stocks, bonds, debentures, debenture stock, unit certificates and includes any letter or other document conferring or containing any evidence of rights in respect of any security”.
According to the Regulations no person may accept or deal in foreign currency unless he or she is an authorised dealer. The exception to this rule is if the Minister of Finance provides permission to a person to accept or deal in foreign currency.
The commercial banks have been appointed as the authorised dealers and as such, exchange control applications must be made to any authorized dealer within Lesotho.
It is also a requirement to be in possession of endorsed share certificates if the shareholder in a local company is a non-resident of the CMA. Such endorsements would also require exchange control approvals.
Our corporate commercial team can provide assistance with regards to applications for exchange control in Lesotho. Contact us on 0027 51 492 5353 (SA) 00266 5905 2797 or send us an email at email@example.com
This article was written by Zurayda Mayet. She is a director at Kleingeld Mayet and has acted for a wide range of clients that include multinational-corporations, government institutions, non-governmental organizations, private individuals, listed and unlisted companies. Her experience stretches across corporate, commercial, company and cannabis law in various sectors both in South Africa and Lesotho.