Business compliance in Lesotho
Everything a business must do to stay compliant in Lesotho — tax with Revenue Services Lesotho (RSL), company registration with Registrar of Companies (OBFC), labour, data and licences. Plain English, no jargon.
Revenue authority
Revenue Services Lesotho (RSL)
Companies registry
Registrar of Companies (OBFC)
Corporate tax
25% (10% for manufacturing & farming)
VAT
15% (register at LSL 2,000,000)
Labour law
Labour Code (1992), with the Labour Act, 2024 reforms
Social security
statutory workplace protections (national social security is being reformed)
Data protection
Data Protection Act
Empowerment / localization
limited formal empowerment rules — check sector requirements
LABOUR LAW
WHAT IS IT?
Employment in Lesotho is governed by the Labour Code (1992), with the Labour Act, 2024 reforms, with contributions to statutory workplace protections (national social security is being reformed).
WHEN DOES IT APPLY?
From day one of hiring your first employee in Lesotho. Statutory minimums and written terms apply immediately — there is no informal grace period.
HOW TO COMPLY?
Put every employee on a written contract, register as an employer with Revenue Services Lesotho (RSL) and statutory workplace protections (national social security is being reformed), withhold and remit employee taxes, and meet the minimum conditions on hours, leave and termination set by the Labour Code (1992), with the Labour Act, 2024 reforms.
WHY IT MATTERS?
Unfair-dismissal claims, labour-inspector findings and unpaid statutory workplace protections (national social security is being reformed) contributions carry penalties and back-pay orders — and can jeopardise work permits for foreign staff. Always confirm the current detail with Revenue Services Lesotho (RSL) or a local professional.
TAX & CUSTOMS
WHAT IS IT?
Business tax in Lesotho is run by Revenue Services Lesotho (RSL). Companies pay corporate income tax (headline rate 25% (10% for manufacturing & farming)) and most charge VAT at 15%; cross-border goods attract customs duty.
WHEN DOES IT APPLY?
From the moment you incorporate and start trading. VAT registration becomes compulsory once taxable turnover passes LSL 2,000,000.
HOW TO COMPLY?
Register for a tax number with Revenue Services Lesotho (RSL), file the required returns (corporate income tax, VAT, employee taxes) on time, and keep proper records. Register separately for customs if you import or export.
WHY IT MATTERS?
Late or missing returns attract penalties and interest, and Revenue Services Lesotho (RSL) can raise estimated assessments or withhold your tax-compliance status — stalling tenders, contracts and banking. Always confirm the current detail with Revenue Services Lesotho (RSL) or a local professional.
COMPANY REG
WHAT IS IT?
Companies in Lesotho are incorporated and kept on record by Registrar of Companies (OBFC).
WHEN DOES IT APPLY?
Before you trade through a company. A sole proprietor may only need a business-name registration, but a company must be incorporated and kept in good standing.
HOW TO COMPLY?
Reserve a name and file incorporation documents with Registrar of Companies (OBFC), appoint directors, then register the company for tax with Revenue Services Lesotho (RSL). Keep annual filings and ownership details current.
WHY IT MATTERS?
Trading through an unregistered or lapsed company, or failing to keep filings up to date, risks penalties, personal liability and deregistration. Always confirm the current detail with Revenue Services Lesotho (RSL) or a local professional.
B-BBEE / LOCALIZATION
WHAT IS IT?
Lesotho's empowerment / localization angle: limited formal empowerment rules — check sector requirements.
WHEN DOES IT APPLY?
Mainly when you bid for government work or large contracts, and for licences in some regulated sectors. Buyers often ask for proof before contracting.
HOW TO COMPLY?
Establish your status under limited formal empowerment rules — check sector requirements, and build local ownership, employment and procurement where the framework rewards it. Keep your proof current.
WHY IT MATTERS?
Without the right status you lose points — or are excluded — on tenders and supplier programmes. Always confirm the current detail with Revenue Services Lesotho (RSL) or a local professional.
POPIA / PRIVACY
WHAT IS IT?
Data protection in Lesotho is governed by the Data Protection Act.
WHEN DOES IT APPLY?
Whenever you process personal information about customers, staff or suppliers — which covers almost every business.
HOW TO COMPLY?
Process data lawfully and for a clear purpose, get consent where required, keep it secure, appoint an information officer where the law requires one, and handle breaches and access requests properly.
WHY IT MATTERS?
Regulators can impose fines and enforcement notices, and cross-border data transfers can be restricted — on top of the reputational damage of a breach. Always confirm the current detail with Revenue Services Lesotho (RSL) or a local professional.
LICENCES & PERMITS
WHAT IS IT?
Beyond the universal registrations, Lesotho requires sector-specific licences — construction, private security, financial services, food and health, alcohol, transport and more each have their own regulator.
WHEN DOES IT APPLY?
Before you operate in the regulated activity — often before you can even tender or import.
HOW TO COMPLY?
Identify your sector regulator(s), meet their requirements (registration, premises, qualifications, standards) and renew on time. A municipal trading licence and zoning often apply on top.
WHY IT MATTERS?
Operating without the right licence can mean fines, closure, confiscated goods and disqualification from contracts. Always confirm the current detail with Revenue Services Lesotho (RSL) or a local professional.
Where to go
Lesotho — frequently asked questions
What is the corporate tax rate in Lesotho?
Revenue Services Lesotho (RSL) levies corporate income tax at 25% (10% for manufacturing & farming). VAT is charged at 15%. Rates are set in the budget and change — always confirm the current figure with Revenue Services Lesotho (RSL).
How do I register a company in Lesotho?
Companies in Lesotho are incorporated with Registrar of Companies (OBFC): reserve a name, file the incorporation documents, appoint directors, then register the company for tax with Revenue Services Lesotho (RSL).
When must I register for VAT in Lesotho?
VAT registration becomes compulsory once your taxable turnover passes LSL 2,000,000. You can often register voluntarily below that — check with Revenue Services Lesotho (RSL).
What labour law applies in Lesotho?
Employment in Lesotho is governed by the Labour Code (1992), with the Labour Act, 2024 reforms, with social-security contributions to statutory workplace protections (national social security is being reformed). Written contracts and statutory minimums apply from the first employee.
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Reviewed June 2026 from official sources. General information only, not legal, tax or accounting advice — confirm with Revenue Services Lesotho (RSL) or a registered professional.