Incorporating a business in Lesotho is a critical step for entrepreneurs and investors seeking to formalise their operations, secure legal protections, and engage effectively with financial institutions, regulators, and commercial partners. The incorporation process is governed primarily by the Companies Act No. 18 of 2011, which provides the statutory framework for the registration, operation, and governance of companies in Lesotho. While the Act establishes clear rules regarding the legal structure of companies, fiduciary obligations of directors, and filing requirements, the actual procedural pathway to incorporation is primarily facilitated through the One-Stop Business Facilitation Centre (OBFC), which falls under the Ministry of Trade, Industry, Business Development and Tourism.
The incorporation process begins with a name reservation application, in which a proposed company name is submitted for approval. The Registrar of Companies conducts a name search to confirm the availability of the proposed name, ensuring it is neither misleading nor confusingly similar to an existing registered entity. Once approved, the name is reserved for a period of 30 days. Following this, the incorporation application is submitted along with several key documents. Supporting identification documentation for directors and shareholders, such as certified copies of identification documents or passports, is also required.
Once all requirements are met and reviewed, the Registrar issues a Certificate of Incorporation, officially recognising the company as a separate legal entity. This certificate contains the company’s registration number and date of incorporation.
After incorporation, companies are required to maintain corporate registers, including a register of shareholders, a register of directors, and records of all board and shareholder resolutions. Companies must also keep accurate financial statements and accounting records, which should be retained for a minimum statutory period. Private companies are required to file annual returns with the Registrar of Companies, providing updated information on the company’s structure, shareholding, and operational status. Failure to file returns may lead to administrative sanctions, including the possibility of deregistration.
Foreign investors may incorporate companies in Lesotho without significant restriction; however, some sectors are reserved for Basotho nationals. It is important to obtain sound legal advice when foreign direct investment is involved, particularly where large-scale projects, land acquisition, or capital remittance are concerned. The Central Bank of Lesotho regulates all foreign exchange transactions, and prior approval may be required for the repatriation of capital or dividends.
Despite reforms introduced to streamline registration, challenges persist, including delays in document verification, limited digitisation of corporate filings, and inconsistent enforcement of compliance obligations. Furthermore, many entrepreneurs lack access to legal guidance and may be unaware of the importance of compliance with post-incorporation obligations. Engaging a local legal advisor is recommended to ensure that the incorporation process is carried out efficiently and that the company remains in good standing with regulatory authorities.
Incorporation in Lesotho is more than a procedural formality; it is a foundational step that enables entrepreneurs to access financing, contract in the company’s name, and scale operations within a protected legal framework. It is also a key element in promoting formal employment, enhancing corporate transparency, and contributing to national economic growth. As Lesotho continues to reform its business regulatory environment, improve investment facilitation, and align with regional and global best practices, a comprehensive understanding of incorporation procedures will be essential for new business owners and investors alike.