Trading Licenses In Botswana

Victoria Marumo

Hi there! And a jolly welcome back to this week’s blog discussion. I trust you have gained tons of knowledge from the previous article and should be far now with setting up your business. For first-time readers, I urge you to take a look back at the previous topics of discussion to better understand the lap we are on now. Today we will be delving deeper into the subject of trading licenses.

Trading Licenses, are basically documents/certificates that give permission to the applicant (person seeking to open a business) to commence a particular trade or business in a particular area or location. However, the license does not allow the holder to any other trade or business than for the purpose it is issued for. This is to say, for example, if you have a restaurant license type, you cannot proceed to sell alcohol under the guise of the restaurant license. For every product or service, you wish to provide, one must have the legal document to back it up.

It is mandatory for individuals or companies to obtain a trade license in order to sell goods and services in Botswana. Failure to do so, and your business is discovered to be operating without a license, could lead to serious consequences including jail time. Trading licenses can be obtained at the commercial departments of district or town and city councils. Requirements include; forms and an accompanying covering letter outlining business operations in detail. Trading licenses vary in fees and duration and an annual fee of 25% of the license fee is required. Annual proof of compliance with health regulations and filing of annual returns are also required.

Types of Trading licenses And Fees

2Amusement arcadeP500.00
3AuctioneerP1, 200.00
5Car washP150.00
6Cleaning servicesP200.00
7Commercial hardwareP1, 000.00
8Curio shopP500.00
9Department storeP2, 000.00
10DistributorP1, 500.00
11DrillerP1, 000.00
12Dry cleanerP1, 500.00
13Dry cleaning depotP500.00
15Fresh produce dealerP250.00
16Funeral parlourP1, 500.00
17Furniture shopP1, 500.00
18General clothingP750.00
19General dealerP250.00
20General hire serviceP500.00
21GymnasiumP1, 000.00
23Hair and beauty parlourP750.00
24Industrial hardwareP1, 000.00
25Internet cafe or copy shopP500.00
27Motor dealerP1, 500.00
28Petrol filling stationP500.00
29Pharmacy or chemistP750.00
30Plant hire serviceP500.00
31RestaurantP1, 000.00
32SupermarketP1, 500.00
34WholesaleP1, 500.00
35WorkshopP1, 500.00
Table1.0: type of trading license and the cost

There are licenses that are available for application by both Batswana and foreign nationals and those of which are strictly availed to Batswana. It is important to always confirm this information before proceeding to apply for a trading license. Please also note that that trading licenses are not limited to the above listed only, and that list extends beyond. More trading licenses can be found on the Ministry of Investment, Trade and Industry’s website.

New Trading License Application Versus Transferring From one owner to the next

It is possible to apply for a new trading license for your desired business/ company just as it is equally possible to transfer an existing license to the next person. The pros and cons of each outweigh each other, because at the end of the day, it is entirely determined by an individual/company’s long-term business plan. A transfer can be a tad bit costly however, and s in the case of land transfer as discussed in the previous chapter, a lot of factors may arise in the long run thereby delaying the whole process. In business, the longer route is always the safest and pocket friendly route contrary to shortcuts such as buying ready-made companies and or trading licenses.  Below are necessary requirements;

  • If the applicant is a business, a copy of the certificate of incorporation is required and in the case of an individual, or a partnership, the submission of a certified registration certificate.
  • The latest copy of the annual returns form obtained from the Registrar of Companies and Intellectual Property.
  • Proof of availability of the business premises (either a title deed, or a written lease agreement).
  • A certified copy of a valid National Identity card (Omang) for owners, shareholders or directors who are citizens.
  • Certified copy of passport for owners, shareholders or directors who are non-citizens.
  • The original or certified copy of physical planner’s report validating zoning for the plot upon which the activities will occur. Physical planners are employed by the District Council and should be booked by the applicants to validate zoning.
  • The original or a certified copy of the environmental health report for the business premises in question. The report must be completed by health inspectors employed by the District Council and the applicant must book the health inspector for inspection.

Transfer of license:

  • A certified copy of a valid National Identity card (Omang) for owners, shareholders or directors who are citizens.
  • Certified copy of passport, work and residence permit for owners, shareholders or directors who are non-citizens.

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The process kicks off at a non-refundable fee of P100.00 and is expected to take about five days to process. However, this is government offices guys, and the process may take longer than that, depending on a number of factors inclusive of faulty documentation, issues of authorization or just a general slow day at the office.

Is a Trading License Really Important?

Some businesses operate without a trading license, especially shebeen kings and queens aka ‘Bommaspoto lerraspoto? who sell alcohol from the comfort of their homes. Others operate bigger establishments like car garages, supermarkets or mini grocery stores and so forth. You might even know a local carwash or two. But hear me when I say, it is completely illegal and when the authorities catch you, they will make it impossible to get back on the scene.

When it comes to tendering, especially for government, a trading license is equally important as PPDAB codes. Your license should be in sync with the nature of the tender which is why it is important to do thorough homework/investigations on an advertised tender before jumping to apply. Check out these are reasons why it is important to own a trading license;

  • Necessary to regulate the trade and ensure that the citizens (consumers) are not adversely affected by health hazards & nuisance due to improper carrying of a trade.
  • Is more of a tool used to make sure relevant rules and safety guidelines are adhered to by the business in question.
  • A trading license protects an entrepreneur/ business/company from unforeseen liabilities.
  • A Licensed business will have higher goodwill and will attract the customers and investors than an unregistered entity.
  • Protects the company from permanent closure, fines and penalties.
  • It protects the owners upon some types of liability.
  • Companies having better business practice attract different investment groups and other business organizations.
  • Acquiring a trading license is the ethical thing to do in business

Miss Victoria Marumo is a journalist with a distinctive and creative voice. Her avid reading complements well with her writing in providing captivating information on business topics.

Writer: Victoria Marumo