The future of business licensing in South Africa

Understanding the Businesses Act, 1991 and the proposed Business Licensing Bill, 2025

If you run a business or are considering starting one, you need to know that the regulatory framework for business licensing in South Africa is on the brink of significant transformation. For more than three decades, the Businesses Act 71 of 1991 has governed the licensing of certain categories of business, giving municipalities wide discretion to regulate activities within their jurisdictions. While the Act remains in force, the publication of the Business Licensing Bill, 2025 for public comment signals government’s intention to modernise, streamline and eventually replace the current system with a unified national framework.

As at March 2026, the Business Licensing Bill is still at proposal stage and may undergo extensive revision before being enacted. Nonetheless, its structure and objectives offer insight into the likely future regulatory landscape for South African businesses. We explain the purpose and content of the proposed 2025 Bill and consider how these changes might affect your business.

The current position: Businesses Act 1991

The Businesses Act, 1991 was introduced when the South African economy relied heavily on localised control of business activities. Its central features include:

• The delegation of licensing authority to local municipalities
• The publication of municipal by-laws prescribing licence requirements and conditions
• Wide variance in licensing requirements between municipalities
• A focus on specific categories of businesses, particularly those involving food, health risks, entertainment, lodging and informal trading

The Act’s decentralised structure has resulted in a system that is functional but inconsistent. Two similar businesses in different municipalities may face different licensing obligations, turnaround times or compliance costs. This fragmentation is one of the issues the new Bill seeks to address.

Why a new licensing bill?

Over the past decade, the Department of Trade, Industry and Competition (DTIC) has increasingly emphasised regulatory harmonisation, especially for small businesses. Fragmented licensing laws create barriers to entry, increase administrative burdens, and complicate enforcement.

The Business Licensing Bill, 2025 aims to replace the existing patchwork of rules with a centralised, uniform legal framework applicable throughout South Africa. According to the draft Bill’s explanatory memorandum, its objectives include:

• Establishment of one national system setting out when a business must be licensed
• Standardisation of national requirements and procedures for licence applications
• Improved regulatory oversight, monitoring and enforcement
• Creation of a digital licensing platform to streamline the application process
• Enhanced transparency and reduced opportunities for abuse or arbitrary decision-making

The Bill attempts to modernise an outdated legal regime and reduce complexity for entrepreneurs.

What the Business Licensing Bill seeks to change

Although still an early draft, the Bill proposes several key reforms:

A single national framework

Municipal by-laws will no longer operate as the primary source of licensing rules. Instead, national legislation will determine:

• Which businesses must be licensed
• Standardised application requirements
• Nationalised timeframes for processing applications
• Grounds for refusal, suspension, or revocation of licences

Municipalities will still be involved, but their role will be more administrative than legislative.

A national register and digital system

The Bill envisages a central electronic licensing system, accessible to national, provincial and local authorities. This would significantly improve efficiency, reduce duplication and allow businesses to track applications in real time.

Uniform enforcement mechanisms

The Bill aims to standardise inspection powers, compliance notices and penalties across the country. This is intended to reduce uncertainty and prevent municipalities from imposing the same rules differently.

Transition from the 1991 Act

Once enacted, the Bill will repeal and replace the Businesses Act, with transitional measures allowing existing licence holders to convert their documents into the new system.

How these changes will affect businesses

Greater predictability

A standardised national system will make it easier for businesses to understand what is required, no matter where they operate.

Reduced administrative burden

Businesses operating in multiple municipalities, such as chains and franchises, will no longer face region-specific licensing requirements.

Digital efficiency

A central online platform promises faster processing, fewer in-person visits, and less time spent dealing with bureaucracy.

Stronger regulatory oversight

Although the system will be more accessible, enforcement is likely to become stricter as monitoring improves through digital records.

Transitional compliance

Businesses will be required to update their licensing documentation, but transitional provisions will be in place.

Is your business ready for the new licensing regime?

The Business Licensing Bill is still in draft, but the time to review your compliance position is now — before the rules change. Contact Simon on 086 099 5146 or email sdippenaar@sdlaw.co.za for a confidential discussion about your business licensing obligations.

SD Law – Simon Dippenaar & Associates Inc.

Attorneys, Notaries & Conveyancers

SD Law is a Cape Town law firm with a strong practice in divorce and family law, urgent eviction matters, antenuptial contracts, liquor licence applications and selected commercial disputes. Clients instruct us when the matter is urgent, high-stakes or strategically sensitive, and when they want direct, clear legal advice backed by practical litigation experience.

Read articles