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Starting a Business in Lesotho

 

About Companies

Not all businesses are companies. Many are run by sole traders or partnerships.

Companies are registered by the office of the Registrar Companies (Registrar) at OBFC. The companies are incorporated under Companies Act No 18 of 2011 and Companies Regulations 2012. The Registrar will provide the company with Standard Model Articles and Particulars of the Company, but a company can develop its own articles.

A company is a legal person, separate from those who own or manage it. The possible benefits of operating as a company include:

• the people who invest in the company (the members, normally shareholders) will not be personally liable for the company’s debts over and beyond what they have invested or agreed to invest but, if the business is profitable, they may be entitled to a dividend;

• the day-to-day management can be the responsibility of directors who need not be the same people as provide the investment;

• the company can continue indefinitely - it can survive the death of the founders of the business or be sold to new owners by simply transferring shares.

In return for these benefits, information about a company’s activities must be provided to the Registrar. This includes any change in the directors or registered office and an annual report.

Business Licensing

Licences are issued through the ONE STOP BUSINESS FACILITATION CENTRE in Maseru as well as the local offices of Ministry of Trade and Industry, Cooperative & Marketing. You may contact these for clarification of the above rules. A full list of these offices is shown below:

 

For those businesses in Maseru District, Licenses are issued by following the steps detailed below:
 

Exporting

Regardless of the value of the goods, whenever there is an export whether to Intra/Extra SACU,Individuals exporting goods valued above M5, 000.00 are required to complete the SAD500 document has to be filled at least five copies and the first two copies are submitted to Lesotho Customs at the border ,and the last two copies should be submitted to South African Revenue Services at the border, and the other copy is submitted with the goods at the destination place.

Individuals exporting goods outside of SACU are required to come into the OSS and proceed through the following steps:

Manufacturing Licensing

Manufacturing licenses are issued at OBFC under Ministry of Trade and Industry Marketing and Cooperatives to enhance institutional capacity, and to promote industrial expantion by creating investor-friendly policies.

Marketing Licensing

The department of marketing controls marketing of agricultural products in Lesotho and provide tranning to small and commercial farmers in the contry.

The services offered by this department are:

• Import permits for fruits, vegetables and legumes

• Issues agricultural traders certificate/license

 

Work Permits

The requirements for work permits have not changed in the period under review. Work permits were being issued only to those in the Textile Manufacturing sector however after extensive consultants with the Ministry of Labour and Employment work permits are currently issued to the entire manufacturing sector at the OBFC. All other sectors are serviced from the office of the Labour Commissioner which has now closer to the OBFC. It is currently situated on the Floor Block D Development House.

Requirements for work permit - First application

• Covering letter from the company

• A completed first application form

• Certified passport copy that include a visa

• Certified educational certificates

• Certified copy of traders license, manufacturing or other license

• Certified copy by of a company tax clearance certificate

• Memorandum and articles of association if the applicant is a director

• An agreement between the main contractor and sub-contractor if a sub-contractor is engaged

• Certified copies of registration from Lesotho Dental& Pharmacy Counsel and Lesotho Nursing Counsel (doctors, pharmacists and nursers)

• Copy of an advertisement for the post

• Names and terms of reference of the local counter part

• Organizational structure and detailed training programme

Renewal of work permit

• Expiring work permit card

• Company’s letter stating why permit should be renewed and why the counterpart cannot take over

• Completed renewal form

• Certified passport copies including residence permit

• Certified copies of trader’s, manufacturing or other license

• Certified copies by LRA of company and individual income tax certificate

• Certified copies of registration from Lesotho Dental& Pharmacy Counsel and Lesotho Nursing Counsel (doctors, pharmacists and nurses)

Fees payable

• First application M750.00

• Renewal application M1000.00

• Issuance of card M70

• Replacement of lost, defaced or destroyed work permit M100.00

Residence Permits

Requirements for residence permits (all copies have to be certified).

Applicants are required to bring the same documents for residence permits renewal.

Tax Registration

The information provided to the Registrar for the incorporation of a company will be shared with the Lesotho Revenue Authority in order that the company can automatically be registered as a taxpayer. Confirmation of the tax registration will be provided with the incorporation certificate.

As and when the company takes on employees, it will still necessary for them to be registered separately for PAYE purposes.

Starting a business, or company, in Lesotho takes approximately 40 days as compared to about 46 days for the Sub-Saharan Africa region. This piece outlines the general technical procedures for starting a company in Lesotho, according to the Doingbusiness.org database by the World Bank. It includes details and requirements to be in good standing with all relevant agencies beyond the company registrar like social security agencies.

Use this as a guide while you complete the process and consult with agents carrying out work on your behalf.  Additional notes may be found here.

Technical Procedures

The steps involved in registering a company (Private Limited Company €” PLC) in Lesotho are:

1. Hire a registered legal practitioner, who prepares all documents and registers the company in the Deeds Office.
2. Have land lease stamped and pay the stamp duty.
3. Receive an inspection by the Public Health Inspector with the city council.
4. Apply for manufacturing or trading license and register for taxes with the OSS at the Ministry of Trade and Industry.
5. Open a bank account and pay the required initial capital in a bank.
6. File for workman’s compensation with an insurance company.
7. Request a post office box or private box.