LFN’s Take on the Business Licensing Bill: A Balanced Voice Amid Rising Panic

Excerpt: The Business Licensing Bill has sparked fierce debate across South Africa. At Liberty Fighters Network (LFN), we cut through the noise to assess what the Bill actually proposes, how it might affect the unemployed, informal traders, and foreign business operators — and why now is the time for calm, critical engagement, not panic. While the Bill could potentially support fairer trade and community-level accountability, it also poses serious risks of abuse, overreach, and unintended exclusion if poorly implemented.

LFN does not endorse the Bill in its current form, but we stand ready to challenge any unconstitutional provisions once the final Act is enacted. In the meantime, we urge all South Africans to read, think, and act constructively.

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South Africa’s draft Business Licensing Bill, 2025, has ignited a national debate — fuelled by fear, uncertainty, and, at times, disinformation. At Liberty Fighters Network (LFN), we believe in arming the public with factual, impartial information to help you make informed decisions. With this article, we seek to provide a balanced analysis of the Bill, clarify what it actually proposes, address common fears, and highlight both the dangers and the opportunities it presents.

What the Bill Actually Does

The Business Licensing Bill is meant to repeal the outdated Businesses Act, 1991, and create a new national framework under which businesses — formal and informal — can be licensed through their local municipalities. It proposes that designated types of businesses (to be listed via Gazette) must obtain a license in order to operate. Foreign-owned businesses are brought under stricter compliance requirements, informal trade is to be formalised, and municipalities are given structured enforcement powers through appointed “authorised officers.”

A Measured Look at Common Concerns

1. Will every small business, informal trader, or home enterprise be required to get a licence?

Eventually, yes — but not all at once. The Bill enables the Minister to designate which types of businesses require licences through a public process. Not every business will be caught from day one, and exemptions for micro and low-risk activities are also provided. Municipalities may waive licensing fees for small traders. Possibly, the eventual Act will come into operation in phases, and not all at once. It would probably take several years before licensing would be actively enforced.

2. Is this a tool to target foreign nationals?

It is a tool to enforce legal compliance — not an anti-immigrant law. Non-citizens will only be eligible for a business licence if they have valid immigration status and permits authorising business activity. This will help bring unregulated and undocumented foreign-operated businesses under lawful oversight. It also aligns with constitutional requirements and should be seen as levelling the playing field, not scapegoating. Therefore, the Pakistani or Somalian trader at your local corner, for example, will have to be licensed for him to trade. Probably your Zimbabwean minibus taxi driver, who effectively runs his own business, will also have to obtain a licence to operate.

3. Will this open the door to corruption and abuse by municipal officials?

Potentially yes — but that depends on implementation. The Bill gives officials broad enforcement powers, including entry, inspection, seizure, and issuing fines. These powers can be abused if left unchecked, but the Bill also contains due process safeguards, such as appeal rights and written reason requirements. Whether these are respected depends on civic vigilance and local capacity.

4. Is this an attempt to control the economy and crush informal trade?

Not inherently. The Bill does impose licensing, but it also seeks to support small enterprises through fee waivers, simplified processes, and exclusive trading zones for small entrepreneurs. It could be used to uplift informal businesses — if implemented with a development-first mindset. The risk lies not in the law, but in the administration.

5. Could this Bill be used to regulate landlords and slumlords?

Potentially, yes. The Bill allows the Minister to designate any business activity for licensing. That could include residential letting, which would empower municipalities to enforce basic standards for rental dwellings as part of the licensing process. Potentially licensing the trade of landlords would guard against city deterioration and counter the leasing of dwellings to illegal immigrants.

6. Can shopping malls be forced to accommodate small enterprises?

Not directly, but indirectly yes. Municipalities may establish trading zones exclusively for small businesses. These could be integrated into or near commercial centres, promoting inclusion. While the Bill doesn’t specifically mandate mall diversity, it empowers local governments to encourage it.

The Potential Benefits

• Legal accountability: Businesses (foreign or local) must comply with health, zoning, and safety laws.
• Immigration enforcement: Unlawful foreign traders can be prevented from operating.
• Support for small businesses: Licence fee waivers and simplified processes are possible.
• Community development: Councils can promote inclusive trading zones.
• Public health and safety: Businesses will be better regulated.

The Real Dangers

• Corruption risk: Unchecked municipal discretion can lead to gatekeeping and bribery.
• Over-regulation: Excessive red tape may deter entrepreneurship.
• Unintended exclusion: Without care, informal traders may be pushed out instead of supported.
• Vague empowerment terms: If not clarified, terms like “disadvantaged groups” could be used unfairly.

LFN’s Position

LFN remains committed to opposing unlawful overreach of State power. However, we also recognise that the intent of the Business Licensing Bill — if fairly and efficiently implemented — could create an enabling environment for all entrepreneurs, safeguard communities, and curb exploitative practices by illegal operators. That said, we are acutely aware of the distrust our members and the broader public have in the ability of the State to implement such frameworks fairly, competently, or without political motive.

As highlighted in our earlier article, “Unemployment in South Africa: Fact, Fiction or Misclassification?”, the real unemployment crisis in South Africa is deeply misunderstood and frequently manipulated. The creation of a complex licensing regime that may discourage informal and small-scale entrepreneurship must be weighed against the reality that millions survive through self-employment outside formal metrics. Any regulation that restricts this economic resilience could unintentionally worsen unemployment, drive businesses underground, and disempower those it intends to support.

LFN does not endorse the Bill in its current form. We recognise certain aspects that may be useful if implemented transparently and lawfully, but we caution against premature assumptions that the Bill is either wholly beneficial or wholly destructive. The final Act — not the draft — will be the true battleground, and we will be ready to challenge any unconstitutional or authoritarian provisions once enacted.

For now, we urge our supporters to engage critically but calmly. Panic helps no one. Let’s scrutinise the law — not just the State actors we distrust. Until the final Act is passed, the fight is not against regulation itself, but for regulation that serves all the people of South Africa — not just a few.

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