Lesotho

Starting a Business in

Lesotho

Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Lesotho. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.

This information was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 185 economies. The most recent round of data collection was completed in June 2012.

Compare Lesotho to 184 other economies.

  • Standardized Company

  • Legal Form: Private Limited Company
  • Paid in Minimum Capital Requirement: None
  • City: Maseru

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No. Procedure Time to Complete Associated Costs
1 Conduct a company name search and apply for business registration

Documents required: - certified proof of address and - certified copy of a proof of identity. Certification at the OBFC can be done for a cost of R2 per page. At the endo of the process, the Company registration clerk delivers an advice form which containes the R530 registration fee to be paid.
7 days LSL 2 per page to certify the documents
* 2 Pay registration fee at the Accounting window, submit the receipt and obtain company registration documents and TIN number

The entrepreneur receives 2 receipts, one for his records and the other one needs to be given to the Company registration window.
1 day (simultaneous with previous procedure) LSL 500 for a domestic company + LSL 30 for search of company name
3 Have land lease stamped and pay the stamp duty

All sublease agreements for longer than 3 years must be registered in the Deeds Registry after obtaining Ministerial Consent to the sublease. Thus, if any new business enters into a sublease agreement for longer than 3 years, ministerial consent must be obtained and should be registered in the Deeds Registry within 3 months. Ministerial consent and subsequent registration can take from 3 months to 3 years. Usually, however, agreements are entered into for 3 years less 1 day, which does not require registration or any formalities except the formal stamping of the agreement according to the Stamp Duty Order.

Fee schedule for stamp duty on agreements:

• Up to 5 years: 0.5%.
• 5–10 years: 0.8%.
• 10–20 years: 1%.
• Over 20 years: 1.4%.

 1 day no cost
4 Receive an inspection by the Public Health Inspector and obtain health certificate

The Maseru City Council requires a health inspection by its health officers and issues a health certificate after satisfactory results. The certification process does not involve any costs, but the time can vary from 1 week to 3 weeks.
14 days LSL 60
5 Apply for an operational license

It is required to submit the stamped sublease or lease, certified passport copies all ofdirectors, and the health certificate. Cost varies depending on the activity.

 1 day no charge
* 6 Pay the operational license fee at the Accounting window, submit the receipt and obtain operational license

The entrepreneur receives 2 receipts, one for his records and the other one needs to be given to the Company registration window. The cost of the business license will depend on the type of activity.
1 day (simultaneous with previous procedure) LSL 650 for a retailer of domestic goods.
* 7 File for workman’s compensation with an insurance company

Workman’s compensation insurance must be taken out with a private insurance company registered in Lesotho. The cost of insurance depends on the number of employees and the level of risk. The “pay as you earn” (PAYE) tax is payable to the Lesotho Revenue Authority, by completing a monthly form that states employee names and details.
1 day (simultaneous with previous procedures) no charge
* Takes place simultaneously with another procedure.
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