New Business Licensing Bill Adding More Red Tape
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The Department of Small Business Development has introduced a new Business Licensing Bill that will impact every business in South Africa, formal or informal, large or small.
What is the Bill about?
The Bill aims to create a national registry of all businesses operating in South Africa. To do this, every business will need to register and apply for a licence through their local municipality. These licences will be valid for five years.
The goal is to:
Standardise licensing rules across the country
Make the registration process faster and simpler
Help government provide better support to small and informal businesses.
What powers will inspectors have?
Licensing inspectors will be able to:
Ask to see your business licence at any time
Fine businesses or confiscate goods if rules are broken
Shut down businesses operating without a licence.
What are the concerns?
While government says the Bill will support business growth and improve governance, several organisations have raised serious concerns. Given local government’s questionable service delivery track record these concerns are definitely well founded.
While government claims the Business Licensing Bill will support growth and improve oversight, many business organisations have expressed serious concerns, especially given local government’s poor service delivery track record. Stakeholders, including Business Unity South Africa (BUSA) and Free Market Foundation and NEASA warns that the Bill will:
Add more red tape, especially for small businesses.
Compound existing admin burdens already imposed by legislation in the past few years, including the General Laws Amendment Act of 2022 (e.g. beneficial ownership reporting).
Increase compliance costs for businesses.
Fuel corruption and bribery as businesses try to navigate complex requirements.
Drive more businesses into the informal sector to avoid red tape.
Could limit who qualifies for a business licence, potentially excluding certain groups.
Gives too much unchecked power to inspectors, raising the risk of arbitrary enforcement.
Creates legal uncertainty and increased operational risk for small and medium business owners.
Why does this matter?
South Africa’s economy depends heavily on small and medium enterprises. Any new law that affects how businesses operate must balance the need for order with the realities of running a business.
This Bill is open for public comment until 28 November 2025. If passed in its current form, it could change how every business in the country is regulated.
The Bigger Question
Is this just another way to raise funds for local government under the guise of regulation? Will the creation of a national business register truly offer value that outweighs the additional cost and complexity for businesses? These are the critical questions businesses and taxpayers alike must consider before this Bill becomes law.
