You may have seen the recent headlines relating to no trading licences for foreign nationals. Although how it works and what its reach remains murky.
What is being implemented is Regulation 34 of the Business Licensing and Registration Regulations which reserves specific business activities exclusively for indigenous citizens. The rule is not a “foreigner vs. Basotho company” test and not a 20%/30% shareholding threshold. If any proprietor, shareholder, partner, or director is not an indigenous citizen, a licence in a reserved activity runs to expiry and will not be renewed. There is a limited carve-out for a joint venture or partnership with an enterprise wholly owned by indigenous citizens, but sham arrangements will be revoked.
What is an indigenous citizen? The regulations define an indigenous citizen to mean a person whose ancestry can be traced back to at least three generations as citizens of Lesotho.
Where things stand on timing
The Act and Regulations have been operational since 1 August 2022 (with Section/Regulation 34 subject to phased implementation). The Ministry has repeatedly indicated it is now moving to full enforcement.
Recent reporting says the Ministry intends to stop issuing or renewing licences for non-indigenous enterprises in reserved sectors from January 2026 (practically, non-renewal happens when the current licence expires).
Much focus has been placed on retail but is it just retail?
That “foreign companies can just keep 20% local ownership and carry on”.
For reserved activities, the lens is on indigenous citizen ownership and control. This is not a simple foreign/local percentage, that one may see in other jurisdictions. Any non-indigenous proprietor/shareholder/partner/director disqualifies renewal, unless the JV exception applies.
There also appears that there is a believe that the regulation only hits tuck shops and general retail. This is not what one can see from the regulations themselves, the net covers logistics, clearing, warehousing, business agents/brokers, cleaning, printing/photocopying, installation trades, scrap metal, and pharmacies (retail), among others.
The 2021 Amendment deleted “motor dealer” from the reserved list, replaced “retail sale in non-specialised stores (Division 471)” with “Convenience and grocery stores,” and narrowed item 40 to retail (not wholesale) of pharmaceutical and medical goods. Some media lists circulating online still reflect the pre-2021 wording, which may be misleading.
There appears to be a common misconception
That “foreign companies can just keep 20% local ownership and carry on”. For reserved activities, the lens is on indigenous-citizen ownership and control. This is not a simple foreign/local percentage, that one may see in other jurisdictions. Any non-indigenous proprietor/shareholder/partner/director disqualifies renewal, unless the JV exception applies.
There also appears that there is a believe that the regulation only hits tuck shops and general retail. This is not what one can see from the regulations themselves, the net covers logistics, clearing, warehousing, business agents/brokers, cleaning, printing/photocopying, installation trades, scrap metal, and pharmacies (retail), among others.
What should foreign investors do know?
Map your activities line-by-line against Schedule 16 (updated to reflect the 2021 amendment). If any line falls within the reserved list, treat it as high-risk, and seek professional advice.
Where to learn more
Official text: 2021 Amendment (Legal Notice No. 100 of 2021) replacing Regulation 34 and defining “indigenous citizen”.
Reserved list (Schedule 16) and fees (as originally published in 2020), noting 2021 changes to items 36 and 40 and deletion of “motor dealer”.
Government statements on implementation (phased approach from Aug 2022; updates on Section/Regulation 34).
For background on how we got here, see our earlier note “Where are we now – Business Licensing and Registration Act, 2019” (Webber Newdigate, 5 Aug 2022).
For further information or advice contact the Webber Newdigate Commercial Department on https://webbernew.com/p31/legal-services/commercial-law.html
Author: Pamela Bubb, Webber Newdigate Attorneys – Corporate and Commercial Department. This note provides general information as at 03 December 2025 and is not legal advice.
