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INVESTORS GUIDE
Lesotho is a democratic, sovereign and independent country with the unique characteristic of being totally surrounded by its neighbour, the Republic of South Africa. Formerly a British protectorate until she gained independence in 1966, the Kingdom of Lesotho is one of three remaining monarchies in Africa.
It has a land area of approximately 30 355 km˛, roughly the size of Belgium or Taiwan, or the American state of Maryland. Located at the southern tip of Africa, Lesotho is completely outside the tropics and enjoys a cool, temperate climate. Often referred to as the “Switzerland of Africa”, it is blessed with a beautiful, often snow-capped range of mountains, the Maluti. The Kingdom’s central position in the heart of Africa’s most developed economy, that of South Africa, is well served by air, rail and road links to all its major centres.
The capital, Maseru, is only 600 km away from South Africa’s busiest harbour, Durban, and is two hours drive from Bloemfontein, a judicial and academic centre. It is also only an hour by air or four hours by road from Johannesburg, Africa’s largest concentration of commercial and industrial activity.
The Kingdom is home to the largest and most ambitious civil engineering project in the whole of Africa, the Lesotho Highlands Water Project (LHWP), which has harnessed and commercialised her upstream surplus water resources - often referred to by Basotho as their “White Gold”.
DISTANCE TABLE
Maseru to Durban 600km
Maseru to East London 583km
Maseru to Port Elizabeth 738km
Maseru to Cape Town 1165km
Maseru to Johannesburg 455km
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WHY LESOTHO?
Stability
A stable social and political environment which is investor friendly.
A free enterprise and free market economic system which forms the basis for sustained development and growth.
Labour
A young, abundant, predominantly English speaking, literate and well motivated labour force with a tradition of manual dexterity at competitive wage rates.
Market Access
60 million consumers in the Southern African Customs Union
400 million consumers in the European Union (EU). The Cotonou Agreement, a successor to the Lome Convention provides unlimited entry for a wider range of industrial goods produced in Lesotho.
The Africa Growth Opportunity Act (AGOA) Trade and Investment Act 2000 has opened doors to a wider range of products from the Sub Saharan countries including Lesotho into the United States market.
Highly concessionary Generalised system of Preferences (GSP) to: Japanese, Nordic and other developed markets
Company Tax
A low corporate tax rate of 15% on profits earned by manufacturing companies and free repatriation of profits.
No withholding tax on dividends distributed by manufacturing companies to local or foreign shareholders.
Financial Incentives
Export finance facility
Long term loans and/or equity participation
Unimpeded access to foreign exchange
General sales tax exemption on capital machinery and equipment for manufacturing industries.
Industrial Infrastructure
Serviced industrial sites and factory shells are available for rental at competitive rates.
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EXTEND YOUR RANGE OF MANUFACTURING OPPORTUNITIES
Manufacturing investment in Lesotho is promoted by the Lesotho National Development Corporation (LNDC). The country is an outstanding location for export orientated manufacturing industries. The many foreign companies, which have established manufacturing bases in the Mountain Kingdom successfully, serve a wide variety of world markets.
The Government of Lesotho is irrevocably committed to the development of the private sector and is currently involved in a privatisation programme.
The Kingdom has signed the Cotonou Agreement, an African Caribbean and Pacific (ACP) - European Union (EU) economic and trade co-operation framework. The USA Generalised System of Preferences (GSP) has been enhanced by the super GSP - Africa Growth Opportunity Act (AGOA) which affords duty and quota free access to a wider range of products from sub-Saharan countries including Lesotho for an eight year period effective from October, 2000. Other preferential trade agreements have been entered into with the Southern Africa Development Community (SADC), Western European countries outside the EU, Nordic countries and Japan.
Manufacturers receive a full rebate on imported raw material or components for use solely in the processing or manufacturing of goods for the export market. Thus although there are no conventional EPZ’s in Lesotho, all the export companies enjoy the advantages of manufacturing “in bond” (i.e. no import or export duties.)
Lesotho’s population is 2.1 million (2000) and the two official languages are Sesotho and English. The people of Lesotho, called Basotho, have a comparative advantage over people in most developing countries by being relatively well educated (the literacy rate is 75%) and, as testified by foreign investors, are hard working, disciplined and display a high degree of manual dexterity.
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LIVING AND LEISURE
As well as a vibrant business environment, Lesotho offers a temperate climate, pleasant living conditions and excellent recreational opportunities. Children revel in its fresh air, unpolluted streams and rivers, and year-round sunshine.
The capital, Maseru, is an intriguing blend of 20th century sophistication and the timeless serenity of rural Africa. However, one of the Kingdom’s major attractions is the spectacular scenery. It is an ideal location for the outdoor enthusiast; trout fishing, mountain climbing in the Maluti range, pony trekking and bird watching are just some of the leisure activities widely enjoyed in the “Switzerland of Africa”.
Educational, medical and housing facilities are well provided for and a cosmopolitan expatriate community is involved in a variety of leisure activities that cater for most hobbies.
Lesotho National Development Corporation
Private Bag A96, Maseru 100, Lesotho
Telephone: (+266) 22312012; Fax: (+266) 22310038
Cables: “Devcor”
E-mail: info@lndc.org.ls
Web site: www.lndc.org.ls
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