The principal forms of business enterprises in Lesotho are:

  • A business may be conducted by individuals, partnerships, trusts, close corporations, companies or branches of foreign companies.
  • A company may be public (name ends in Limited) or private (name ends in Proprietary Limited). Both private and public companies are governed by the Companies Act.
  • A private company is the most common vehicle for operating a business in Lesotho. It must have at least two directors. There need not be any Lesotho resident directors.
  • A subsidiary of a foreign company is regarded as a Lesotho company. The legal liability of the Parent Company is limited to the amount of capital committed (together with any guarantees provided).
  • A branch of a foreign company is regarded as an external company if it establishes a place of business or owns immovable property in Lesotho, and must register as such.
  • The legal liabilities of a branch are not limited to the extent of its Lesotho assets.
  • Both a Lesotho company and a branch operation are subject to the provisions of the Companies Act.
  • A branch is obliged to lodge a certified copy of its Memorandum and Articles of Association (or other instrument defining its constitution) with the Registrar of Companies, as well as a sworn translation into English, where appropriate.
  • A branch is required to have an annual audit and lodge annually its financial statements with the Registrar of Companies.
  • Locally registered private companies do not require an auditor unless one of the shareholders is a company and/or the number of shareholders exceed ten.


  • Both a subsidiary and a branch are taxed at the rate of 35% on profit derived from Lesotho.
  • Foreign income is not subject to Lesotho tax.
  • Three provisional tax payments are made in respect of each tax year. Any balance is payable on assessment (after an annual tax return is lodged).
  • A resident company which pays a dividend is liable to make advance payments of income tax (referred to as advance corporation tax) except when the dividend is paid out of manufacturing income or the dividend is paid from dividends received from another resident company.
  • The rate of advance corporation tax is 53.8%.
  • The liability to pay advance corporation tax may be satisfied by an instalment of tax which has been paid and has not been set off against a final liability for income tax.
  • A dividend paid by a resident company shall not be included in the gross income of a resident shareholder.
  • Certain distributions made by companies will be deemed to be dividends, for example, loans to shareholders.
  • Dividends payable to non-resident shareholders are subject to a withholding tax of 25% and are charged to the non-resident shareholders.
  • A branch in Lesotho of a non-resident company is subject to tax at the rate of 25% on repatriated income in addition to income tax on the chargeable income of the branch.

Other Taxes

If a subsidiary or branch :
  • Employs personnel it must register as an employer with the Revenue authorities and deduct tax PAYE from remuneration payable to employees.
  • Sells goods or provides services, it must register with the sales tax department and charge and pay over sales tax. The rate is 10% except for liquor and telephone/electricity services – where rates of 20% and 5% apply respectively.
  • Stamp duties are paid on transfer of shares, issue of shares, leases, mortgage bonds.
Customs and excise tax.
  • Fringe benefit tax is paid by an employer who provides any of the following fringe benefits to employees: car, housing, utilities, domestic assistance, meals or refreshments, medical fees, loan and debt waiver.
  • Resident individuals are taxed on a sliding scale.
    • M0 – M30,000 at 25%
    • Above M 30,000 at 35%
  • A tax credit of M 2640 per annum applies to all resident individuals regardless of marital status.
  • Maximum tax rate is 35%.
  • Non-resident individuals are taxed at the rate of 25%.


Incentives offered to manufacturers include :

  • A special low corporate tax of 15% on profits which can be freely repatriated without attracting further withholding tax on dividends.
  • Financial incentives including training grants, concessional loan finance and a comprehensive export credit facility.
  • Readily available and purpose built factory shells at competitive rental rates.
  • Concessional access to international markets in the Southern African Customs Union and other Africa States, North America and Europe.
  • The services of Lesotho National Development Corporation to ensure speedy processing of official documents.


Lesotho is a member of the South African Common Monetary Area (CMA) through a trilateral Agreement with South Africa, Swaziland and recently Namibia. Lesotho has no exchange rate policy independent of that of the CMA. There are no exchange controls on movements within the CMA. Exchange Controls for outside transactions are similar to those in the Republic of South Africa. These controls and regulations are implemented by the Central Bank of Lesotho (CBL). There are no restrictions on imports from other members of the Southern African Customs Union (SACU) namely South Africa, Botswana, Swaziland and Namibia. Licensing of imports from other countries outside SACU is similar to the Republic of South Africa. There are no controls on exports, except for diamonds for which a licence is required.


There are no visa requirements for all visitors from the Commonwealth countries except as noted below.

Countries that have visa abolition agreements with Lesotho are :

  • Denmark, Finland, Greece, Iceland, Ireland, Israel, Japan, Madagascar, Norway, South Korea, Sweden

Visas are required for visitors from the following countries :

  • Australia, Canada, Ghana, India, New Zealand, Nigeria, Pakistan.

Shaun Bakamoso

Greetings. I'm Shaun Bakamoso, and I'm thrilled to be your guide through the dynamic world of business news in South Africa here at With a passion for staying informed and a keen interest in the ever-evolving landscape of business, I've dedicated myself to providing you with timely, insightful, and comprehensive coverage of the latest developments impacting the South African economy. / Instagram