The Business Licensing and Registration Legislative Changes in Lesotho 2020

In August 2020, the Ministry of Trade and Industry in Lesotho issued new regulations namely:

  • The Business Licencing and Registration Act, 2019; and
  • The Business Licencing and Registration Regulations, 2020.

(Kindly click on the links hereunder in order to access the Act and Regulations)

According to the Act, certain business activities have been reserved for indigenous Basotho nationals only. Furthermore, indigenous Basotho has been described as Basotho citizens whose ancestry can be traced to at least 3 generations in Lesotho.

Prior to the publication of the aforementioned, the business licence regime was regulated in terms of, inter alia, the Trading Enterprises Order, 1993 and the Industrial Licencing Act, 2014.  However, there are also other industry specific acts and regulations that regulate the licencing requirements for specific industries and sectors in Lesotho.  Such sectors include financial services and institutions, insurance, banking and finance, tourism, catering and liquor licencing.

With regards to the publication of the aforementioned Act and the Regulations, the Government of Lesotho has changed the licencing landscape fundamentally and repealed many of the current statutory instruments which deal with trade and other licences. We have summarised the most important aspects of the Act and the Regulations thereunder (kindly click on the links hereunder to access the Business and Licencing and Registration Memorandum hereunder)

As such, 47 business activities have been listed and will be reserved for Basotho nationals only. To this end, foreigners will need to prove that that they have invested at least M2 000 000 (Two Million Maloti) in their businesses in order to renew their trade licenses.  This will have a severe impact on foreign investment, foreign business and foreign workers in Lesotho.

The memorandum is by no means a complete analysis of the licencing regime in Lesotho however, we wish to highlight some of the fundamental changes and more specifically the impact that the Act and the Regulations will have on foreign investment, foreign owned companies and foreign workers operating in Lesotho.

With this in mind, we would like to encourage dialogue between stakeholders, businesspeople, and foreign investors in order to discuss the impact of these new legislative changes. We will be hosting an inclusive online webinar with various stakeholders, foreign diplomats and affected parties.  Participation will be free of charge.  Please visit our website at www.akmlaw.co.za for more details pertaining to the online seminar.

The memorandum is clear and concise and we will summarise some of the provisions in the Act and the Regulations. Furthermore, we will attach the Act and the Regulations for further reading and analysis. It will also be available on our website and Linkedin pages for download.

In conclusion, the objectives of the Act, as set out therein, is to promote private sector development through a conducive investment climate, facilitate the inclusion of all types of businesses into the formal business sector, facilitate speedy issue of licences and registration of businesses, simplify and streamline licensing and registration procedures and facilitate registration of business names. The Act is void as to the objectives in so far as naturalisation and foreign ownership, but it is dealt with in the Act and Regulations as a by-product.

Please do not hesitate to contact us should you have any questions or concerns.

Kleingeld Mayet Inc.

klein@akmlaw.co.za

mayet@akmlaw.co.za