- September 7, 2016
Lesotho is a politically stable, democratic, and independent country situated at the Southern tip of Africa and completely encompassed by its only neighbor the Republic of South Africa. The Kingdom in the Sky is endowed with temperate healthy and invigorating climate which is totally free from the tropical diseases, given its elevation from approximately 1500m to 3500m above sea level. Thus, diseases such as yellow fever, bilharzias and malaria are not prevalent in Lesotho. The country is blessed with a beautiful range of mountains, the Maluti, providing a spectacular scenery for visitors to the Mountain Kingdom, no doubt, it rightly deservers its epithet as “The Switzerland of Africa”. Lesotho is one of the only three remaining Monarchies in Africa, headed by King Letsie III as the Head of State. Lesotho was formerly a British protectorate until she gained independence on 4th October 1966. For the first time since independence, following the 26th May 2012 general election which failed to produce the winner with absolute majority, a tripartite coalition government was formed and headed by the Right Honorable The Prime Minister Dr. Motsoahae Thomas Thabane.
Lesotho welcomes and encourages potential investors on a Public Private Partnerships (PPP) basis in the following focus sectors:
Lesotho’s agricultural sector contributes less than 10% to the GDP but about 82% of the population still depends on it. This sector, however, boasts a massive potential that only requires appropriate technologies and the capital equipment.
It’s over a decade since the government has introduced free primary education as an initiative to promote the motto “Education for All”. Lesotho has two major universities, The National University of Lesotho and Limkokwing University. The Government of Lesotho attaches high priority to implement best practices in Technical and Vocational Education and Training.
The effective functioning of the health system requires an effective infrastructure development. Currently all pharmaceutical products are imported into Lesotho. Opportunity lies in the manufacture of disposable syringes for immunization, manufacture of latex condoms used in the management and control of the spread of HIV / Aids, disposable latex gloves and other health services accessories.
Lesotho offers a wide spectrum of tourism ranging from nature parks, game reserves, pony tracking and holiday resorts situated at the foot of the beautiful mountains of the Kingdom. The choice for recreational activities is enormous. Visit one of the lodges, right on top of the mountains, and enjoy the beauty. From Malealea lodge, for example, you can be able to go through the “Paradise of the P ass”. From there tourists get a spectacular view of the ‘Roof of Africa’.
The mining industry has come into picture by reopening three mines namely Letšeng Diamond Mine, Kao Diamond Mine and Liqhobong Diamond Mine. Lesotho is known as a source of large and high quality diamonds. Recently Letšeng Diamond Mine has produced the biggest diamond since the last 13 years and was the 15th largest diamond found in the whole world.
The Government of Lesotho policy is to develop the infrastructure in almost all the sectors to upgrade and expand airports, railways, roads, industrial and commercial sites and buildings. In the past years the Lesotho’s Highland Water Project (LHWP) through construction of Katse and Mohale dams, and roads made a huge impact on both social and economic life of the Basotho people.
The abundance of crystal clear water, referred to as the “White Gold of Lesotho”, remains unharnessed, which means there is a high potential that Lesotho can supply water to all the people of the Southern African region. The current construction of the two additional dams of Metolong and Polihali (Mokhotlong) ensure adequate supply of these water resources. This is a lucrative opportunity for investors in construction works and water harvesting, including manufacturers of water pipes.
Over the past years the demand for electricity is rising significantly. So there is a need to generate more electricity using renewable resources of energy to counter for the shortage. Currently, the Lesotho Electricity Authority (LEC) is the regulatory body assuring supply and distribution of electricity in the country.
Foreign Trade and Investment
Lesotho has the door to limitless and vast trade and investment opportunity in knitted fabric mill, leather and footwear manufacturing, assembly of consumer electrical and electronic appliances, food processing and water bottling, plastic products, resource-based projects (ceramic ware, brick making, sandstone and mining of minerals), environmental projects (waste recycling) and infrastructure development.
Conducive Investment Environment
In its efforts to create an environment conducive to investment, Lesotho’s government established a one – stop shop aimed at shortening registration and licensing procedures for foreign companies.
A. Access to Markets:
Lesotho is a member of two regional trade agreements: The Southern African Customs Union (SACU) and the Southern African Development Community (SADC). There are also other arrangements outside the region which include the agreement with the EU under Cotonou arrangements and with the US under AGOA.
B. Enabling Environment for Business
(i) Attractive tax rates
Maximum manufacturing tax rate of 10 % on profits derived from sales within SACU
No withholding tax on dividends distributed by manufacturing firms to local or foreign shareholders
No advanced corporate taxes are paid by companies on the distribution of manufacturing profits
Easy repatriation of manufacturing profitsVAT rate of 14% (ensuring harmonization with RSA). However, Lesotho Revenue Authority has introduced flexible VAT payment system to tax complaint firms, to ease cash flow constraints.
(ii) Tariff Rebates and Duty Free Access to global markets.
Lesotho manufacturers obtain duty and quota free access to the SACU, USA, EU and SADC.
C. Investment Facilitation
Most of the industrial properties in Lesotho are owned by Lesotho National Development Corporation (LNDC). LNDC industrial estates can be found in four urban districts of Leribe (Maputsoe), Maseru, Mafeteng and Mohales’s Hoek. LNDC, at the request of potential investors, can assist any investors in establishing a business in Lesotho. The range of services offered by LND C to potential investors includes the following:
Getting business started
Reserving a name of company
Registering a company
Getting a manufacturing license
Registering for tax
Registering for municipal rates
6 months border concessions (Lesotho)
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