By Karen Gatherum
For too long, licensing has been viewed by many businesses as a tick-box exercise – an operational necessity dealt with only when expansion or enforcement demands it. But across Scotland, we are beginning to see a shift. Licensing is more than just compliance and staying within the rules. A dynamic approach to licensing can become a tool to inform your strategy, drive growth and protect your reputation. Take hospitality and leisure as an example. Governed primarily by the Licensing (Scotland) Act 2005, businesses may come across the need for occasional licences, applications for extended opening hours or specific entertainment permissions, which can have a significant impact on operations and trading. It is those who treat licensing proactively, as they would financial forecasting or ESG reporting, that are more likely to be able to react to changes and avoid any of the associated risks. In 2022, the introduction of new Short-Term Let Licensing under the Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order caught many operators off guard. It was a perfect example of how regulatory shifts can instantly turn a previously compliant business into an unlawful operation. Local authorities across Scotland now operate with different application windows, conditions, and renewal cycles, demanding tailored legal strategies for hosts, platforms, and investors. For those operating businesses in short-term lettings, staying informed of these changes is essential. For businesses targeting international expansion into Scotland, licensing can also be a sticking point. New entrants to the market could make the mistake of assuming there is a one-size-fits-all approach, whereas, in reality, we have 32 individual local authorities and Licensing Boards, each applying national legislation with local policy twists. This can delay market entry if not properly managed. Similarly, energy and environmental firms looking to capitalise on Scotland’s green agenda may overlook the need for specific licences or permits under SEPA (Scottish Environment Protection Agency) frameworks, particularly around waste, abstraction, or emissions. While technology is helping to modernise, streamline and automate some of these processes and applications, licensing law is more nuanced than ever, highlighting the value of professional advice. For instance, submitting an alcohol premises licence online may be simple, but negotiating with the Licensing Board on overprovision arguments or community objections is not. Similarly, short-term let operators may be able to apply digitally, but understanding licensing and planning conditions, antisocial behaviour enforcement, and insurance requirements still demands human judgment. As advisors, our job is not just to submit forms, but to help clients navigate the complex Scottish licensing landscape with confidence and foresight. Legal partners can provide strategic insight for business strategy and planning, including how a licensing approach may impact M&A readiness, operational reputation, or investor scrutiny. We see this in hospitality transactions, where a lapse in personal licence refresher training resulting in the revocation of the licence, or the availability of premises managers could sink an entire deal. In any sector impacted by regulation and governance, licensing must be central to the conversation. By treating licensing as an essential function, not just a legal formality, businesses can stay ahead and informed of potential issues and opportunities. Karen Gatherum is an associate and head of licensing law at Gilson Gray