A Guide to Business Licences in South Africa

Business licensing in South Africa is municipal. The national framework comes from the Businesses Act 71 of 1991, but you apply to your local municipality, and requirements and fees differ between them.

Not every business needs a licence. The Act targets specific activities, principally the sale or supply of food, health and entertainment-related activities, and certain hawking and trading. A consultancy working from an office generally does not need one; a business preparing meals does.

The confusion worth clearing up early: a business licence is not company registration, and it is not a sector licence. Many businesses need all three, and they come from three different places.

A business licence is municipal permission to conduct a specified activity at specified premises. It is tied to both the activity and the address, which is why it does not move with you and is not transferable when a business changes hands.

It sits alongside, not instead of, three other things. Company registration with the Companies and Intellectual Property Commission creates the legal entity. Zoning or land use approval permits that activity at that property. And sector licences, such as liquor, transport, financial services or health, come from their own regulators.

Getting these in the wrong order is the common and expensive error. Zoning first, then registration, then the licence.

The activities most commonly requiring a licence are:

• Selling or supplying prepared foodstuffs, which covers restaurants, takeaways, caterers, food trucks, bakeries and spaza shops selling food
• Providing health facilities or entertainment, including certain saunas, massage and similar establishments, and some entertainment venues
• Hawking in food, and street trading, which is separately regulated by municipal by-laws with trading bays allocated by the municipality
• Certain activities involving gaming machines or adult entertainment

Many other businesses need no business licence but still need zoning approval and sector-specific authorisation. Where you are unsure, ask the municipality directly rather than assuming, because trading without one you needed is not cured retrospectively.

Food businesses carry the heaviest requirements, and the licence is only part of it.

You will generally need a Certificate of Acceptability from the municipality’s environmental health department, which certifies the premises are fit for handling food and is required before you trade. You will need zoning or consent use permitting food preparation at that address. You will usually need a business licence under the Businesses Act. And you may need fire and building compliance sign-off depending on the premises.

If you serve alcohol, that is an entirely separate application to your provincial liquor authority, with its own timelines and objection process.

Our guide to food licence applications covers what inspectors check and how to prepare.

1. Confirm with the municipality whether your activity requires a licence, and confirm zoning for the address in writing. Do this before signing a lease.

2. Obtain the application form from the municipality’s business licensing or environmental health department.

3. Prepare the supporting documents: identity documents for owners or directors, company registration, proof of the right to occupy the premises, zoning confirmation, a layout plan, and any health, fire or building clearances.

4. Submit and pay the prescribed fee, which varies by municipality and activity.

5. Pass any inspection. Health, fire and building inspectors may each need to visit.

6. Display the licence at the premises and keep it current. Contact details for municipalities and departmental services are listed on the government services portal.

Trading without a required licence is an offence. Municipalities can issue fines, order the business to close, and seize stock or equipment in some circumstances.

The wider costs are usually worse than the penalty. Landlords in formal retail require sight of the licence. Insurers may decline a claim where the business was trading unlawfully. Corporate and government clients will not contract with an unlicensed supplier. And a business that cannot demonstrate compliance is effectively unsellable, because no buyer will take on the exposure.

If you are already trading without one, applying is almost always better than waiting to be found. Municipalities deal with applications routinely, and the cost of regularising is far lower than the cost of enforcement.