Distribution channels in Lesotho consist of both wholesale and retail outlets operating throughout the country. South African firms dominate the retail and wholesale sectors. Most manufacturers supply wholesalers, who then distribute goods to retailers through nationwide chain outlets. Some manufacturers also operate through sales agents who maintain bonded warehouses for product storage and distribution. Lesotho has air, road, and rail links to South Africa, which distributors use to transport goods from manufacturers to wholesalers or sales agents. A 15 percent Value Added Tax (VAT) is applied at each stage of the supply chain, though producers may reclaim input VAT, leaving the final tax burden on consumers.

Using an Agent or Distributor

American businesses interested in exporting to Lesotho are encouraged to engage the services of a reputable freight forwarding/customs clearance agent well versed in Lesotho law.  Firms will also have to engage the freight forwarding/customs clearance agents in South Africa because Lesotho relies on South African ports (mostly Durban) for imports. Other manufacturers have sales agents who have bonded warehouses to store the products, which are later dispatched to retailers.

Establishing an Office  

For U.S. businesses interested in doing business in Lesotho, the law requires they have a local presence by establishing an office in Lesotho. For the latest Investment Climate Statement (ICS) which includes information on investment and business environments in foreign economies pertinent to establishing and operating an office and to hiring employees, visit the U.S. Department of State’s Investment Climate Statements website. 

Franchising 

There are opportunities for U.S. business in franchising, such as restaurants, services, retail shops and hotels. Lesotho is part of the Franchise Association of Southern Africa (FASA) which supports ethical franchising, supports small businesses, and enhances entrepreneurship within the franchising sector. 
 

Direct Marketing

Direct marketing in Lesotho comprises of traditional methods with emerging digital platform.  Radio remains dominant, followed by print media including advertising in local newspapers. Social media marketing is also becoming popular. Billboards and outdoor advertising are other methods of adverting large companies use.

Joint Ventures 

For U.S. businesses interested in doing business in Lesotho, it is important to pursue joint ventures with local businesses. The LNDC plays a critical role in promoting and facilitating joint ventures by preparing feasibility studies, project preparing, provides factory space, facilitates licenses and permits, access to long to long- term loans, and tax incentives for the manufacturing businesses.  

Express Delivery

Lesotho’s express delivery sector is relatively small but functional, with a few international and local players operating in the country. The most active and reliable express delivery providers include:

• DHL Express – The most dominant international courier in Lesotho with a presence in Maseru and key border towns.
• FedEx/TNT – Available through agents in South Africa; direct Lesotho coverage is limited
• Lesotho Post (Lepost) – Offers Express Mail Service (EMS) but is less reliable for time-sensitive shipments.

For inbound shipments, international providers like DHL offers door-to-door service within 1–3 business days from South Africa and 4–7 business days from the U.S., depending on customs clearance. Domestic express service is still developing; delays are common due to limited last-mile infrastructure, especially in rural areas.
 

Due Diligence 

U.S. businesses should conduct their own due diligence before forming joint ventures to ensure that partners are reliable.