Concerns raised over proposed Business Licensing Bill
Small Business Development Minister Stella Ndabeni-Abrahams has published the proposed Business Licensing Bill of 2025 currently out for public comment.
Image: GCIS
CONCERN has been raised by business associations regarding the proposed Business Licensing Bill of 2025 published by Stella Ndabeni-Abrahams, Minister of Small Business Development, that is out for public comment.
Free SA, in a statement, said that they launched a national campaign opposing the proposed Business Licensing Bill.
Free SA added that they believe the bill seeks to centralise and control who can do business in South Africa, how they may operate, and where they are allowed to trade.
They labelled the Bill a dangerous move toward economic authoritarianism, warning that it will suffocate entrepreneurship and deepen unemployment.”
Free SA said that the Bill, currently under review by Parliament, proposes sweeping regulatory powers for the Department of Small Business Development, including:
The ability to determine which businesses require licences;
The designation of restricted trading zones;
Expanded authority for inspectors to enter premises and confiscate goods without clear judicial oversight;
The erosion of municipal and provincial authority over local economic activity.
Other Business associations said that they also had reservations about the implementation of the Bill.
In a submission response to the draft bill, the National Employers' Association of South Africa (NEASA) said that the draft Bill aims to empower local councils to make bylaws to provide for preferential business licensing for small businesses owned by disadvantaged groups.
“This may include shortened, simplified application and renewal processes, lower application fees, and the waiver or suspension of fees.”
NEASA added that in its analysis, apart from its ‘noble’ attempt to formalise the informal sector, the association seeks clarity on the vague terms used in the Bill that is the usage of the phrases ‘persons and areas that were previously excluded’ and ‘disadvantaged groups and areas’ which are not defined in the Bill.
“This vague language causes suspicion and concern that this draft Bill may attempt to infuse exclusionary affirmative action imperatives into business licensing practices (similar to those requirements in the B-BBEE and PPPF Acts), especially considering the terminology used in the guiding principles and the policy document driving this Bill.”
NEASA said that they demanded that the Department provide clarity on how B-BBEE and PPPF Acts’ imperatives, as measures of differentiation for purposes of ‘redress’, find application in this draft Bill.
“Licences should be given to any business that requires one, and no requisite as a measure for preference should be applied in determining those businesses which can or cannot benefit from being licensed.”
Sakeliga, a not-for-profit business group and public benefit organisation, in its written comments, said that the Bill would replace the Business Act 71 of 1991.
“In so far as the Bill seeks to reduce and simplify regulatory and licensing burdens on businesses and promote the development of productive economic activity, Sakeliga would welcome such change. It, however, seems that the Bill will in reality undermine economic growth through regulatory overreach and complex, multi-layered bureaucratic hurdles.”
Sakeliga added that the Bill unjustifiably embeds socio-political objectives directly into the South African business licensing framework. “The ‘principle of redress’ mandates that business licensing policies must now actively correct historical imbalances. Through such a mandate, licensing is morphed from a neutral regulatory tool to an instrument of social engineering.”
Sakeliga said that socio-political objectives should not be embedded into a business licensing framework. “Provisions such as the principle of redress, preferential licensing, and designated exclusive trading areas indicate that the state is prioritising socio-political objectives rather than market principles and basic constitutional rights.”
Trade union Congress of South African Trade Unions has cautiously welcomed the draft bill.
Cosatu's parliamentary coordinator Matthew Parks said it's important that the Bill ease the red tape burdens upon small businesses as this will help unlock economic growth, in particular for emerging entrepreneurs, and contribute towards job creation. “It will help build upon earlier efforts by the Department of Trade, Industry and Competition to make business registration processes simple, accessible, and fast.”