South Africa's new business licensing policy aims to protect local interests

IOL News

02-07-2025

Small Business Development Minister Stella Ndabeni has released the national business licensing policy after it was approved by the Cabinet.
Image: GCIS
Small Business Development Minister Stella Ndabeni has publicly released the national business licensing policy following its approval by Cabinet, with the policy looking to preserve certain sectors for South African citizens.
In terms of the policy, it aims to ensure standardised and common policies across the country for business licensing.
Its further objectives include delineating South Africa's sovereign right to determine the business licensing conditions for foreign nationals in line with its national interest as well as to provide for the reservation of sectors in respect of which a license may only be granted to South African citizens.
It also notes that South Africa has emerged as one of the high immigrant recipient countries in Sub-Saharan Africa and the resident immigrant population has increased substantially in the last three decades.
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'This development has not been addressed systematically, including setting conditions under which foreign-owned businesses can operate, the skills and other attributes required of those businesses, and how they complement capabilities deficits in South Africa,' reads the policy.
It states that several frameworks inform the context for South Africa's policy approach to general business licensing.
Internationally, the country's membership of the World Trade Organisation and the United Nations, among others obligates adherence to rules and regulations set out in the various multilateral treaties with implications on trade regulation.
Some obligations include the treatment of investors and foreign investments to the same standards as local investors and the receipt and granting of trading rights to refugees.
On the accommodation of foreign nationals in the granting of general business licenses it proposes policies that have proactive provisions for the granting of licences to foreign nationals.
'The provisions should clarify the additional criteria to be met by this category of applicants guided by the Immigration Act of 2002 as amended and any other relevant legislation.
Licensing authorities should also consider awareness programmes to educate both the citizens and non-nationals on the relevant criteria and promote open and harmonious trading conditions within their jurisdiction,' the policy explains.
The Immigration Act sets out categories of permits available to foreign nationals and their conditions in relation to trade while through the Spatial Planning and Land-Use Management Act, a uniform system of spatial planning and land use management throughout South Africa is provided for municipalities to apply in relation to other policies such as the trading license.
In traditional councils recognised by the Traditional Leadership and Governance Framework Act 2003, municipal business licensing policies may outline the manner and extent of participation by traditional leadership.
This participation and consultation should be provided for with due regard to the interests of minimising red tape for micro, small and medium enterprises.
The department also hopes the streamlining of licensing procedures will lead to reduced administrative burden and time required for businesses to obtain licenses, renewals or permits.
In addition, through licenses to trade, entities can execute their business ventures, create jobs and revenue for the economy and pursue growth and sustainability.
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