Big changes on the cards for South African business owners

Proposed amendments to South Africa’s Business Licensing Bill could bring significant changes to the licensing process for the country’s small business operators.

The Department of Small Business Development (DSBD) gazetted the first draft of the Business Licensing Bill in September 2025.

The aim of the bill was to replace the existing Businesses Act of 1991 with a modernised framework for the establishment and licensing of small businesses in the country.

Through this, the DSBD hoped to standardise business application procedures and timelines across the country’s nine provinces, significantly improving licensing efficiency.

While the Bill was portrayed as a cutting of regulatory red-tape for small business owners, various parties pushed back against the Bill as potentially having the opposite effect instead.

DA Spokesperson for Small Business Development Henro Kruger said the Bill would place additional administrative strain on municipalities and duplicate existing regulatory processes.

The Centre for Development and Enterprise (CDE) similarly opposed the original draft Bill alongside the Western Cape government, and called for it to be withdrawn.

In response to the backlash, the DSBD rescinded the draft Bill in May 2026, before publishing a revised version later that same month on 26 May.

DSBD Deputy Director-General Vuyisa Dayile discussed some of the amendments made to the Bill in an interview with Newzroom Afrika.

“We are proposing a standardised licensing regime, which will make things much easier for small businesses,” Dayile said. “We want to cut all the complications that are there in the system.”

“One of the things we want to look at is to introduce an e-registration system, which integrates a number of departments so as people apply they are not taken from pillar to post.”

Through this, Dayile explained that the DSBD hoped to reduce both the cost of licensing small businesses in South Africa, and the time it takes to process business applications.

Dayile said his department had also considered introducing waivers for certain “low-risk” businesses. These businesses would thus not require a licence to operate.

This specifically refers to businesses which pose low risk to human life, such as home-based artisanal businesses within South Africa’s townships.

Concerns over revised bill remain

Despite the revisions made to the Bill, certain parties have raised concerns over issues previously mentioned with regard to the original draft.

The Black Business Council (BBC) said while they support the overall goals of the Bill, they remain concerned about certain aspects of its implementation.

In an interview with Newzroom Afrika following the revised Bill’s release, BBC CEO Kganki Matabane said his organisation had made proposals to the DSBD on certain amendments.

“We are worried by the capacity of the municipalities to implement the Bill,” Matabane said. “Most of the municipalities are struggling with providing basic services.”

“Once you give municipalities those powers, they may have challenges. But we believe that’s where the Bill belongs, because small businesses are operating mainly in the municipalities.”

Part of the revised Business Licensing Bill introduces formal regulations for businesses owned by non-citizens for the first time in South Africa’s history.

Matabane said the BBC had requested the DSBD to allow ministers to designate specific areas and business types for South African citizens only.

“We believe that the barrier for small businesses is not that high, so we shouldn’t be having foreign nationals holding some of the businesses,” Matabane said. “So that must be clear.”

With regard to business licensing, the BBC proposed that first-time business applicants should be granted a temporary two-year licence while their applications are processed.

Matabane said that while government regulation was important, it should not hinder the ability of small businesses to operate in South Africa.

On the other hand, he explained that a lack of regulations on small, informal businesses was a key driver behind the country’s current crusade against foreign nationals.

“Any person who comes to South Africa can start a business, and that business is not even registered,” Matabane said.

“We need to find a balance that says ‘register these companies and small businesses, but don’t impose more regulations.’ That balance is important, because otherwise it becomes a free-for-all.”