The legislative journey of the Business Licensing Bill 2025 has reached a critical turning point. Following a robust public consultation period that concluded in late 2025, the Department of Small Business Development (DSBD) recently presented a revised version of the Bill. This update reflects a significant evolution in South Africa’s regulatory philosophy—shifting from rigid control toward active economic enablement.
At the heart of this transformation is the advocacy of the Township and Rural Economic Development Agency (TREDA). By championing specific modifications, TREDA has helped steer the Bill toward a framework that recognizes the unique realities of township and rural entrepreneurs.
1. Proportionality in Practice: The Tiered Licensing System
One of the most significant shifts in the revised Bill is the move away from a “one-size-fits-all” approach to licensing. TREDA identified that the pre-democratic Business Act of 1991 lacked mechanisms for tiered compliance, creating insurmountable barriers for the smallest enterprises.
TREDA proposed a four-tier licensing system designed to reduce administrative burdens:
- Tiers 1 & 2: Dedicated to survivalist, home-based, and micro-traders, requiring simplified documentation.
- Tiers 3 & 4: Catering to established small and medium/formal enterprises.
The DSBD has incorporated this logic into the revised Bill by introducing a formal definition of “low-risk business” in Clause 1. Furthermore, licensing fees for these enterprises will now be limited to cost recovery, and Clause 15 enables specific preferential licensing measures to support survivalist and home-based businesses.
2. Institutionalizing Grassroots Voices
For a licensing regime to be legitimate, it must be rooted in participatory governance. TREDA advocated for the formal institutionalization of grassroots participation within the Bill’s advisory structures. This includes recognizing informal trader associations, rural cooperatives, and township business forums.
The DSBD’s revised Clause 11(3) directly responds to this by expanding the National Committee to include representatives from SALGA and provincial COGTA. This change is designed to improve intergovernmental coordination, ensure decisions reflect real economic conditions, and prevent the imposition of “unfunded mandates” on local municipalities.
3. A Final Commitment to Economic Inclusion
TREDA’s final commitment is anchored in the belief that “licensing will open markets, not close them”. The goal of the 2025 Bill is to move local economies from the margins of the informal sector into the mainstream of the national economy.
To support this vision, TREDA has committed to several implementation pillars that are now reflected in the Bill’s trajectory:
- Digital Literacy & Support: While the Bill introduces a national digital licensing portal (Clause 6), TREDA emphasized that this must be paired with digital literacy training and “data-free” access to ensure micro-enterprises are not left behind.
- Regulatory Leniency: The revised Bill now includes transitional protections and grace periods (12–24 months) to ensure that existing businesses can adapt to the new framework without disruption.
The Road Ahead: Parliamentary Milestones
The Business Licensing Bill is now entering the Section 76 Parliamentary Process. This is a vital phase that allows for further refinement before the second public commenting session.
Key Dates for 2026 Participation:
- 01 May – 15 May: National Assembly Introduction and Tagging.
- 15 May – 15 June: National Assembly legislative process, including extensive public participation.
- 05 August – 04 September: NCOP legislative process, including provincial hearings.
- September: Anticipated Presidential Assent.
By adopting these proportional requirements and embedding participatory governance, the 2025 Bill is poised to become a catalyst for unlocking the entrepreneurial potential of South Africa’s most underserved communities.
TREDA stands firmly in support of The Business Licensing Bill, 2025
