South Africa :: SADC Investment Portal

South Africa

Country Profile

South Africa flag South Africa is bordered by Namibia, Botswana, Zimbabwe and Eswatini. South Africa entirely surrounds Lesotho in the east. A large plateau dominates the centre of the country, with rolling hills falling to plains and the coast. With a surface area of 1,219,090 sq. km, South Africa has a population of 60. 756 million (2024).

South Africa is a constitutional democracy in the form of a parliamentary republic and is one of the founding members of the African Union (AU) and United Nations (UN) and New Partnership for Africa’s Development (NEPAD). South Africa is a member of the Commonwealth of Nations, Antarctic Treaty System (ATS), Southern African Development Community (SADC), South Atlantic Peace and Cooperation Zone (ZPCSA), Southern African Customs Union (SACU), World Trade Organization (WTO), International Monetary Fund (IMF), Group of 77, G20, G8+5 and BRICS (Brazil, Russia, India, China and South Africa).

South Africa is ranked as an upper-middle income economy and is considered to be an industrialised country. Its economy is the third largest in Africa. It has been identified as a middle power in international affairs, and maintains significant regional influence.

South Africa is also known for diversity in culture, languages and religious beliefs; often referred to as the “Rainbow Nation”.

Political and Legal Overview

South Africa is a constitutional democracy with a three-tier system of government and an independent judiciary. The national, provincial and local levels of government all have legislative and executive authority in their own spheres, and are defined in the Constitution as distinctive, interdependent and interrelated.

Operating at both national and provincial levels are advisory bodies drawn from South Africa’s traditional leaders. It is a stated intention in the Constitution that the country be run on a system of cooperative governance. Government is committed to the building of a free, non-racial, non-sexist, democratic, united and successful South Africa.

The Constitution of the Republic of South Africa, 1996 (Act 108 of 1996) came into effect on 4 February 1997. This is the highest law in South Africa and no other law or government action can overrule the Constitution or be in conflict with it. South Africa's Constitution is one of the most progressive in the world and is based on the values of dignity, equality and freedom.

General Information

Capital	Cape Town (legislative), Pretoria (administrative), Bloemfontein (judicial).
Form of State	Federal, comprising a central government and nine provincial governments.
Time	(GMT) + 2 hours
Area	1,219,090 sq. km
Main Languages	isiZulu, isiXhosa, Afrikaans, English
Population	60.756 million (2024) (World meter)
Currency	South African Rand (ZAR).
GDP (current US$)	405.27 billion (2022) (World Bank)
GDP per capita (current US$)	6766.5 (2022) (World Bank)
GDP growth (annual %)	4.8 (2021) (World Bank)

Why South Africa?

a) Quality Infrastructure and Efficient Logistics

With well-established and continued investment in infrastructure, South Africa is positioned as a key global hub and an attractive gateway into the rest of the continent.

b) Largest Presence of Multinationals in Africa

South Africa is the investment destination of choice for a substantial number of global corporations, who enjoy the benefits of doing business in the country. More than 180 Fortune Global 500 companies are present in South Africa.

c) Manufacturing Hub

South Africa has a well-developed, diversified manufacturing base that has shown its potential to compete globally, and serves as a manufacturing hub to supply the rest of the continent for a number of consumer product companies.

d) Lucrative Emerging Market

South Africa’s growing middle class as well as its most affluent consumer base in Africa presents attractive returns on investment.

e) Favourable Market Access to Global Market

The African Continental Free Trade Area (AfCFTA) will boost intra-Africa trade and create a market of over 1bn people with a combined GDP of over US$2trn. South Africa has several trade agreements that provide an export platform into global markets. South Africa is also the economic powerhouse of Africa and forms part of the BRICS group of countries with Brazil, Russia, India and China. It has a favourable demographic profile and its rapidly expanding middle class has growing spending power.

f) Innovation and Tech Hub

The Global Innovation index ranks South Africa number one in innovation in Africa. South Africa’s intellectual property rights protection is regarded as the second best in Africa. South Africa is also fast becoming a technology hub in Africa and has a growing ecosystem in the tech sector ranging from technical expertise to finance support for entrepreneurs.

g) Abundant Natural Resources

South Africa is abundantly endowed with precious metals. It is the world’s leading producer of platinum group metals, the sixth-largest producer of gold, has world-renowned underground mining expertise and more than 100 listed mining companies with operations in the country.

h) Africa's Leading Financial Hub

i) Young trainable labour workforce

South Africa has a number of world-class universities, producing a skilled, talented, and capable workforce. It offers a diversified skill set, a large pool of trainable labour, and government support for training and skills development.

j) Excellent quality of life

South Africa is renowned for its quality of life, offering both high quality city experiences and more tranquil and breath-taking landscapes.

k) Availability of Incentives

South Africa has a host of investment incentives and industrial financing interventions that are aimed at encouraging commercial activity and its trade rules favour a further expansion in South Africa's burgeoning levels of international trade.

l) Film Hub of Africa

South Africa's unrivalled scenic beauty and reputation for delivering value for money make it an attractive leisure, filming and business travel destination.

InvestSA

InvestSA is South Africa’s investment promotion agency. It plays a critical role in attracting and generating investment as well as retaining investments in South Africa. Invest SA acts as the National investment One Stop Shop by offering fast-tracked services for issuance of business approvals, permits and licences. To facilitate investors efficiently, one stop shops have been set up in Gauteng, Western Cape and KwaZulu-Natal.

Beyond the investment facilitation role it plays, InvestSA also supports the business community by coordinating advocacy for business environment reforms.

Invest SA assists investors through:

Creating awareness on South Africa's diverse industry and sector specific investment opportunities;
Providing specialized and tailored assistance to both potential and established investors during all the stages of the investment journey;
Offering aftercare services;
Connecting potential investors with local stakeholders, business organizations and service providers;
Improving South Africa's business climate by initiating or supporting advocacy initiatives.

Investment Incentives

The South African government, Western Cape Government and City of Cape Town have established various sector-focused incentive schemes and tax rebates. This is in order to encourage economic activity on a national, provincial and local level.

Sector Focused Incentives

The Agro-Processing Support Scheme (APSS) aims to stimulate investment by the South African agro- processing enterprises/ beneficiation agri-businesses. It offers a 20-30% cost-sharing grant to a maximum of R20m, over a two-year investment period;
The Aquaculture Development and enhancement Programme (ADeP) is an incentive that supports entities engaged in primary, secondary and ancillary aquaculture in both marine and freshwater, classified under the following Standard Industry classification (SIc): SIc 132: Fish hatcheries and fish farms (including crocodile farms; SIc 301 & 30122: Production, processing and preserving of aquaculture fish. The incentive aims to develop emerging aquaculture farmers, increase production, sustain and create hubs, and to encourage geographical spread. ADeP offers a 30%-45% reimbursable grant of up to a maximum of R20m towards qualifying cost;
The Green Tourism Incentive Programme (GTIP) is a resource efficiency incentive programme that aims to encourage private sector tourism enterprises to move towards the sustainable management of water and energy resources whilst adhering to responsible tourism practices. The incentive offers the following to qualifying tourism enterprises:
- 90% of the cost for a new resource efficiency audit or the full cost for reviewing an existing resource efficiency audit conducted by the national cleaner Production centre of South Africa;
- Grant funding to qualifying small and micro enterprises on a sliding scale from 30% to 90% of the total cost of implementing qualifying resource efficiency interventions, which is capped at r1m.
Manufacturers of products, goods, articles or other things within South Africa that are classified under “Section C: Manufacturing” in version 7 of the Standard Industrial Classification Code, are entitled to a tax allowance on expenditure on manufacturing assets as well as training allowance;
The Black Industrialist Scheme (BIS) aims to accelerate and increase the participation of black industrialists in the national economy, particularly in selected manufacturing sectors and value chains. It offers a 30% to 50% cash grant of the project’s qualifying investment costs, up to a maximum of R50m.
The Capital Projects Feasibility Programme (CPFP) aims to facilitate feasibility studies likely to lead to high-impact projects, which will stimulate value-adding economic activity in South Africa. The incentive is a reimbursable cost-sharing grant payable as follows:
- 50% of the total feasibility study costs for capital projects outside Africa and 55% of total feasibility study costs for capital projects in Africa, excluding South Africa;
- 50% of the total feasibility study costs for manufacturing projects with total assets above R30m;
- 70% of the total feasibility study costs for manufacturing projects with total assets below R30m in South Africa.

The total amount of the grant will be limited to 5% of the investment project value, capped at R8m. The grant is payable in accordance to agreed milestones, predetermined at approval stage.

The Foreign Investment Grant provides up to 15% of the value of new machinery per entity for relocation to South Africa;
Industrial Development Zones provide duty-free import of production-related materials and zero VAT on materials sourced from South Africa;
The Skills Support Programme provides up to 50% of training costs and 30% of worker salaries for a maximum of three years. This encourages the development of advanced skills in the region;
The Strategic Investment Project Programme offers a tax allowance of up to 100% (maximum of USD 86 million per project) on the cost of buildings, plant and machinery (for strategic investments of at least USD 70 million);
The Critical Infrastructure Facility supplements funds up to 30% of the development costs of qualifying infrastructure projects;
The Business Process Outsourcing & Off-Shoring (BPO&O) incentives are for companies offering services to offshore clients (between USD 5400-8800 and training support);
Incentives are in place for industrial projects using unused and new manufacturing assets (for example, green field investments) and expansions of existing industrial projects attract a 12 % tax incentive;
Sector Specific Assistance Scheme (SSAS) provides financial support for industry associations, joint action groups and export councils;
The Automotive Production and Development Program (APDP) scheme promotes the automobile industry. It offers a 20%-30% of the value of investment in productive assets for light motor vehicle manufacturers and a Cost-sharing grant of 25%-35% of the qualifying manufacturing investment costs for deemed component and tooling manufactures limited to R 1million).

Film Industry Incentives

The South African Government offers a package of incentives to promote its film production and post-production industry. The incentives consist of:

a) Foreign Film and Television Production and Post-Production Incentive (Foreign Film)

Production

Shooting on location in South Africa attracts an incentive of 25% of Qualifying South African Production Expenditure (QSAPE), with a cap of R50 million;
An additional incentive of 5% of QSAPE is provided for productions shooting and conducting post-production in South Africa and utilising the services of a black-owned service company.

Post-production

Conduction of post-production in South Africa attracts an incentive of 20% QSAPPE;
An additional 2.5% is provided for spending at least R10 million of post-production budget in South Africa (22.5% cumulative);
Foreign post-production with QSAPPE of R15 million and above, the incentive is calculated at 25% of the QSAPE;
The applicant must demonstrate that they adhere to an industry specific Code of Professional Standards that includes sexual harassment and health and safety protocols;
The principal photography must not commence until an approval letter has been received from the department of Trade and investment.

b) SA Film & TV Production and Co-production (SA Film) Incentives

Tax rebate at 35% of QSAPE;
An additional 5% of QSAPE is provided for productions hiring at least 30% of black South African citizens as HODs and procuring at least 30% of QSAPE from 51% South African black- owned entities which have been operating for at least a period of one year; with a cap of R50 million per project.

c) South African Film and Television Production Incentives

The rebate is calculated as 35% of QSAPE;
An additional 5% of QSAPE is provided for productions hiring at least 30% of black South African citizens as head of departments (HODs) and procuring at least 30% of QSAPE from 51% South African black-owned entities which have been operating for at least a period of one year; with a cap of R50 million per project.

d) The South African Emerging Black Filmmakers Incentive

The South African Emerging Black Filmmakers Incentive is available to South African black-owned qualifying productions.

Incentive

A rebate of 50% on the QSAPE;
The costs for the purchase of key production equipment may qualify once-off under this incentive programme to a maximum cost-sharing incentive of R2 million.

Special Economic Zones Incentives

Special Economic Zones (SEZs), are geographically designated areas of a country set aside for specifically targeted economic activities, supported through special arrangements (that may include laws) and systems that are often different from those that apply in the rest of the country. So far, there are 10 special economic zones in South Africa (Saldanha Bay, Coega, East London, Maluti-A-Phofung, Free State, Musina-Makhado, Dube TradePort, Nkomazi SEZ, Richards Bay, Platinum Valley SEZ, Atlantis SEZ).

a) Preferential 15% Corporate Tax

Businesses that are located in a Special Economic Zone may be eligible for tax relief, including the reduced rate of corporate income taxation.

b) Building Allowance

Businesses and Operators (prescribed in section 1 of the SEZ Act) operating within a Special Economic Zone may be eligible for tax relief, including the building allowance, subject to requirements contained in the Income Tax Act.

c) Employment Tax Incentive

Businesses and Operators operating within a Special Economic Zone may be eligible for tax relief, including the employment tax incentive subject to requirements contained in the Employment Tax Incentive Act, 2013 (Act No. 26 of 2013).

d) Customs Controlled Area Tax Relief

Businesses and Operators located within a customs-controlled area of a Special Economic Zone will be eligible for tax relief as per the Value-Added Tax Act, 1991 (Act No. 89 of 1991), the Customs and Excise Act, 1964 (Act No. 91 of 1964), the Customs Duty Act 2014 (Act No. 30 of 2014) and the Customs Control Act, 2014 (Act No.31 of 2014).

Investment Opportunities

The potential of the South African economy is evident in the diverse sectors and industries that exist in the country, the following are some of the sectors which have high growth and investment potential:

a) Agriculture

South Africa has a well-developed agriculture sector. It contributed 2.9% to overall GDP in 2022, accounted for 5.7% of total export earnings and employed almost 863 000 people. The Agro-processing sector on the other hand has grown rapidly over the years, accounting for a sizeable 2.8% of South Africa’s GDP in 2021 and 4.7% of total merchandise export earnings in 2022. Collectively they employ around 264 000 people

Opportunities in the sector entail:

Fisheries and aquaculture, i.e., freshwater aquaculture and mariculture;
Food processing in the milling and baking industries;
Beverages: namely fruit juices, and the local beneficiation, packaging and export of indigenous teas;
High-value natural fibres: organic cotton and downstream mohair production;
High-value organic food for the local and export market;
Biofuel’s production: biodiesel, bioethanol and biogas;
Processing of seed oils, tea extracts, including buchu, honeybush, and other oil derivatives (avocado, amarula etc.);
Diversification/beneficiation of biomass sources, i.e., sugar, maize;
Canning of freshwater fish;
Commercial-scale planting of indigenous plants, including rooibos;
Extraction of high-value additives, nutraceuticals;
Production of aromatics, flavourants;
Non-edible oil processing;
Production of medicinal extracts, incl. cannabis-based;
Production of artemisinin for malaria medications;
Forestry development;
Application of smart technologies in agriculture (hydroponics, renewable energy technologies, drone, mobile communication, applications, etc).

b) Mining Sector

South Africa has the world’s largest reserves of platinum group metals (PGMs) and manganese, and some of the largest gold, diamonds, chromite ore and vanadium deposits. The mining sector contributed 8.1% to South Africa’s GDP in 2022 and 44.2% of its total export earnings.

Investment Opportunities include:

PGMs beneficiation, development of fuel cell industry;
Manganese value chain development;
Export-oriented jewellery fabrication, including diamonds, gold and platinum;
Ferrochrome production, revitalising chrome value chain;
Titanium value chain development, especially titanium dioxide;
Increased iron ore beneficiation through revitalisation of downstream manufacturing capacity;
Green steel investment (decarbonisation of South Africa’s steel
industry which is the largest in Africa);
Coal ash beneficiation (e.g., production of cementitious materials for construction industry; to address acid mine drainage);
Carbon capture and storage;
Oil and gas development opportunities;
Uranium resource development and beneficiation to support global nuclear fuel fabrication;
Sustainable mining technology including digitisation, enhanced data analytics and new generation mining equipment;
Fluorspar beneficiation and other chemicals value chain development opportunities.

c) Manufacturing Sector

South Africa’s well-established and diversified manufacturing sector contributed 13.4% to overall GDP and 45.2% to total export earnings in 2022. It employs around 1.2 million people. Further, the sector has strong linkages with many other sectors of the economy through its procurement of goods and services, as well as with end-use markets for its own products.

Investment opportunities in manufacturing include:

Wood, Pulp, Paper and Furniture

Manufacture of wood and products of wood;
Manufacture of articles of straw and plaiting materials;
Manufacture of paper products: publishing, printing and reproduction of recorded;
Manufacturing of titanium oxide pigments and fine chemicals.

Automotives and Machinery

Fuel cell manufacturing for a variety of applications;
Manufacture of motor vehicles, parts and components focusing increasingly on the electric vehicle segment;
Manufacture of fuel cell mining vehicles and forklifts;
Machinery and equipment (e.g., minerals processing, materials handling, construction, refrigeration and power-sector related equipment, pumps and valves);
Components and sub-assemblies for electronics manufacturing;
Manufacture of equipment and parts for the rapidly growing wind and solar energy generation industry, including storage equipment;
Parts and components for the aerospace and defence industries;
Instruments and controls equipment as well as electricity meters.

Pharmaceuticals and Medical Devices

Medical devices and telemedical instrumentation;
Pharmaceutical products and speciality chemicals (e.g., biochemicals);
Manufacturing and supply of medicinal drugs for diseases such as HIV/AIDS, malaria, tuberculosis, diabetes and other lifestyle diseases;
Development and manufacturing of active pharmaceutical ingredients;
Development and manufacturing of generic drugs;

Textile, Clothing and Leather

Spinning, weaving and finishing of textiles;
Knitted and crocheted fabrics and articles;
Wearing apparel, except fur apparel;
Dressing and dyeing of fur;
Leather skins and hides beneficiation;
Wool and mohair processing;
Leather seat cover manufacturing for the automotive industry;
Manufacturing of protective clothing for hazardous industrial environments (e.g., mining and chemicals industry).

d) Information technology sector

Infrastructure solutions and services, such as fibre optic networks, wireless networks, and data centres;
IoT applications such as telematics and smart devices and inter-device communications technology;
Big data tools for reporting and analytics;
Business franchising opportunities in Voice over Internet Protocol solutions;
Opportunities for consolidation or investment in fibre internet service providers;
Connected living opportunities arising from the roll-out of fibre;
Widespread internet adoption provides significant opportunities for investing in e-commerce platforms, payment solutions, and logistics companies;
e-services across industries e.g., technology/applications for e-government and e-health;
Development of security products;
Software development, IT outsourcing, BPO;
FinTech investment in areas such as online banking, mobile payments, and financial management solutions and cheaper data costs.

e) Financial and Insurance services Sector

The financial services sector provides all forms of financial intermediation including commercial and retail banking, investment asset management, insurance and pension funding management activities. The major banks are Standard Bank, Absa Group, FirstRand, Nedbank and Capitec, some of which provide commercial, retail and investment banking services throughout Africa.

The insurance sector is well-established, with both local and international insurers operating in the market.

Investment opportunities include:

Strong growth opportunities for provision of financial services to the lower ends of the domestic consumer market, underserviced by a concentrated domestic banking industry structure;
Private equity investment opportunities to leverage domestic industrial development opportunities;
Expanding middle class provides growth opportunities for asset management services;
Insurance services growth opportunities from rising non-life insurance penetration rates and enhanced life densities;
Fintech development opportunities in both banking and non- banking segments in the sector, e.g., insurance innovations such as pay-per-use and insurance combined with consumer financing solutions;
Technological solutions for specialised data management services;
Investment in life insurance, health insurance, and property and casualty insurance services;
Potential for investment in insurtech start-ups.

f) Business Process Outsourcing Services

South Africa has a great market for BPO services that is supported by world-class telecommunications, financial and legal infrastructure. BPO services are concentrated in the financial services industry, call centres, data entry and processing and ICT.

The following are investment opportunities and sub-sectors in the Business Process Outsourcing:

Enterprise solutions, e.g., fleet management and asset management; and
Legal process outsourcing;
Establishment of back-office hubs for multinational corporations;
Back-office processing facilities;
Cybersecurity consulting services;
Establishment of call centres;

Provision of shared corporate services;
Knowledge process outsourcing (technical and legal);
Engineering and other technical services to leverage the large public infrastructure development programme currently underway;
BPO opportunities for outsourcing functions such as customer service, IT support, and accounting to local service providers.

g) Tourism Sector

South Africa’s tourism offer, including its scenic beauty and diversity, sunny climate, wildlife and cultural aspects, among others, makes it one of the most popular long-haul destinations and a good investment proposition. The country is the largest tourist destination in the Sub-Saharan region.

The tourism sector’s importance in the economy is reflected by its 2.2% share of national GDP and 3.1% of overall employment (both formal and informal) in 2020.

Investment opportunities include:

Cultural tourism;
Eco-tourism;
Adventure tourism;
Sports tourism;

Wine tourism;
Medical tourism;
Theme parks;
Investment in world heritage sites.

h) Energy Sector

South Africa’s growing energy requirements provide lucrative investment opportunities across numerous energy value chains.

Additional electricity generation capacity from 2022 to 2030 by technology:
Wind:14504MW -SolarPV:6072MW -Gas/diesel:3416MW;
Grid-scale electricity storage:5000MW;
Independent power generation, energy infrastructure and alternative energy;
Nuclear Build Programme, i.e., joint ventures, consortiums and the establishment of new companies to grow South Africa’s nuclear manufacturing capability and nuclear supply industry to supply into the nuclear build programme;

Renewable energy;
Onshore wind power – manufacturing of turbines/blades;
Solar PV and Concentrated Solar Power – manufacturing/assembly;
Opportunities associated with Eskom’s unbundling and repurposing of coal power plants reaching their end-of-life

Starting a Business

Forms of Business

a) Sole Proprietorship

This is the easiest way to start a business if you are on your own. One can operate under their name or some other fictitious name (trade name), as this helps with the marketing of the business. The Sole Proprietor uses their own money and assets and assumes the risks of the business dealings. Sole Proprietorship does not have to be registered at CIPC and therefore it’s not a legal entity.

b) Partnerships

This is when two or more people get together based on an agreement to start and operate a business for the purposes of generating an income and making profits.

Each partner is regarded as an owner and can bring money, skills, assets into the partnership. Profits and losses are therefore shared amongst the partners.

The partnership is not seen as a separate legal entity and therefore the partners are jointly liable for the debts. This type of business is popular with Accountants, Lawyers, and Architects.

The Partnership does not have to be registered at CIPC.

c) Private Company

A Private Company (proprietary limited or Pty LTD) is a separate legal entity which has a separate life from the Director(s) and has rights and duties of its own. The company must be lawfully registered at CIPC and at SARS and have a Company Number and a company Tax Number.

To start a Private Company, only one person is required as a director and one incorporator (which can be the same person). However, there may be more than one Director. The Director(s) are the shareholders and the management employed may or may not have shares in the company.

d) Branch of a Foreign Company

Parent companies can choose to incorporate their own foreign business branch in the jurisdiction of South Africa. The foreign branch must be registered as an external company if it is conducting business activities or plans to do so within the jurisdiction of South Africa.

Local Company Registration

Registering a business in South Africa has become so easy as the same has been automated via the Companies and Intellectual Property Commission (CIPC) website portal, www.cipc.co.za.

Steps for Registering a Company as a Resident

Step 1: Create an Account with the CIPC eservices website.

Step 2: Deposit funds into the CIPC account.

Reserving a business name is R50-00 and registering a business with a standard Memorandum of Incorporation (MOI) is R125-00. Applicants should ensure they have deposited enough money into their CIPC account to complete the process.

Step 3: Reserve business name

The portal requests for four name proposals. Upon submission of the names, the applicant is issued with a tracking number for the name reservation as well as an email confirming name reserved, this document is referred to as a COR9.4.

Step 4: Register the company

The types of companies that can be registered in South Africa are Private (Pty Ltd) and Public Companies (Ltd), Personal Liability Companies (Inc.), and Non-Profit Organisations (NPO). On successful registration of an entity of choice, the applicant is issued another tracking number and an email confirmation containing the COR 15.1, a document which needs to be signed and dated by the incorporator/director.

Step 5: Submit supporting documents

The process is not completed until the signed supporting documents are received by the CIPC. The documents needed to complete the registration are:

Name reservation confirmation letter
Signed COR 15.1A form
A certified copy of your South African ID and/or;
Completed Power of Attorney form –for representatives or proxies

The applicant is required to submit the signed documents via email to eServicesCoReg@cipc.co.za with the tracking number as listed on the COR15.1A in the subject line.

Upon successful registration of the business, the applicant receives company registration documents (COR 14.3) document and MOI.

Duration: 1 – 3 days.

Foreign Company Registration

A foreign company is a company incorporated outside of South Africa, irrespective of whether it is a profit or non-profit company or carrying out business in South Africa. A foreign company is prohibited from offering securities to the South African public unless it follows the specific provisions of the Companies Act, 2008, relating to offers to the public.

A foreign company is required to register as an “external company” with CIPC if it conducts or intends to conduct business in South Africa. Section 23 of the Companies Act, 2008, lists a series of activities which will be regarded as conducting business.

The Companies Act provides that the registration of an external company must occur 20 business days after the foreign company first begins to conduct business in South Africa. Registration of an external company is done manually by way of application in the prescribed form to the Companies and Intellectual Property Commission (“CIPC”) and the payment of a prescribed fee.

Steps for Setting up a Company in South Africa as a Non-Resident

Step 1: Choose a Suitable Business Entity: The first step in foreign company registration in South Africa is to know which type of entity the investor can operate their business in.

Step 2: Register as a customer with Companies and Intellectual Property Commission (CIPC) To be able to transact with CIPC, one needs to register as a customer on the e-services website. Once registered, a virtual account is created in the customer’s name.

Step 3. Deposit funds and reserve company name

Funds may be deposited into the CIPC bank account. Customers are urged to only deposit funds that are required for the transaction. Bulk deposits are discouraged. A customer code must be used as a reference for funds to be allocated accordingly. New e-service transaction accepts card payments only.

This allows the investor to reserve a company name. The name reservation will last for a duration of 6 months and each application for company name registration allows one to submit up to 4 proposed names.

Step 4: Preparation and Submission of Relevant Documents: This entails preparation of necessary documents for company registration such as:

A Memorandum of Incorporation (MOI);
Certified copies of the identities of applicants, directors, shareholders;
Notarised passport copies of individual directors and shareholders is required;
Form CO. R 20.1 Registration of external company form;
Form CO. R 20. 1A Directors of external company form;
Form CoR 21.2 Notice of Person Authorised to Accept Service.

These documents are then submitted to the CIPC through email: companydocs@cipc.co.za. Upon successful registration of the business, the applicant receives company registration documents

Step 5: Corporate Bank Account Opening: This entails opening a corporate bank account with a reputable bank in South Africa. Some banks may require documents to be translated if it is not in one of the South African official languages.

General requirements for opening an account

Approved documents reflecting name, physical operating address and trading name of the Company;
Certification with South African Revenue Services;
Income Tax / VAT registration;
Certificate of Incorporation with the CIPC in South Africa or foreign equivalent if applicable;
Memorandum and Articles of Association (foreign equivalent if applicable).

Company Registration Fees

Name reservation	R50
Private company with standard MOI; Non-profit company without members and with standard MOI	R125
Co-operative	R125
Private company with customised MOI; Personal liability company; Public company; State owned company; Non-profit company without member and with customised MOI or Non-profit company without member and with customised MOI	R425
External company	R400
Domestication of a foreign company	R100

Bank Details

Bank name: ABSA

Account Type: Transmission Account

Account Name: CIPC

Account Number: 4055 68 1017

Branch Name: Van der Walt Street

Payment Reference: CUSTOMER CODE

Taxation

The South African Revenue Service (SARS) is, as per the SARS Act of 1997, mandated to collect all revenue due to the State and administer trade to support the government in meeting its key developmental objectives for growth. This involves facilitating legitimate trade, protecting South Africa’s ports of entry, and eliminating illegal trade and tax evasion.

Types of Taxes

Corporate Income Tax (CIT)

CIT is a tax imposed on companies resident in South Africa, which are incorporated under the laws of, or which are effectively managed in, the country, and which derive income from within or outside the country. Non-resident companies which operate through a branch or which have a permanent establishment within South Africa are subject to tax on all income from a source within the country.

The standard corporate tax rate is 27%. Qualifying small business corporations are subject to the following progressive rates:

0% on the first ZAR 95,750 of taxable income;
7% on taxable income above ZAR 95,750 but not exceeding ZAR 365,000;
ZAR 18,848 + 21% on taxable income above ZAR 365,000 but not exceeding ZAR 550,000;
ZAR 57,698 + 27% on taxable income exceeding ZAR 550,000 (for tax years ending on or after 31 March 2023).

Personal Income Tax (PIT)

PIT is one of the government's main sources of income. Income tax is levied on residents’ worldwide income, with appropriate relief to avoid double taxation. Non-residents are taxed on their income from a South African source.

An employer is obligated to deduct an employees’ Tax from an employee’s remuneration paid or payable. The process of deducting or withholding tax from remuneration as it is earned by an employee is commonly referred to as PAYE.

Tax is levied on taxable income consisting of gross income less exemptions and allowable deductions. (Taxable capital gains also form part of taxable income).

2024 tax year (1 March 2023 – 29 February 2024)

Taxable income (R)	Rates of tax (R)
1 – 237 100	18% of taxable income
237 101 – 370 500	42 678 + 26% of taxable income above 237 100
370 501 – 512 800	77 362 + 31% of taxable income above 370 500
512 801 – 673 000	121 475 + 36% of taxable income above 512 800
673 001 – 857 900	179 147 + 39% of taxable income above 673 000
857 901 – 1 817 000	251 258 + 41% of taxable income above 857 900
1 817 001 and above	644 489 + 45% of taxable income above 1 817 000

Value-Added Tax (VAT)

VAT is an indirect tax on the consumption of goods and services in the economy. Revenue is raised for the government by requiring a business that carries on an enterprise to register for VAT. In doing so, the business will charge VAT on supplies of goods and services made by it, on the importation of goods and on imported services (subject to certain conditions).

It is compulsory for a person to register for VAT if the value of taxable supplies made or to be made, is in excess of R1 million in any consecutive 12-month period. The standard rate of VAT is 15%, and there is a limited range of goods and services which are subject to VAT at the zero rate or are exempt from VAT.

Dividends Tax

Dividends Tax is a tax on shareholders (beneficial owners) when dividends are paid to them, and, under normal circumstances, is withheld from their dividend payment by a withholding agent (either the company paying the dividend or, where a regulated intermediary is involved, by the latter). A dividend is in essence any payment by a company to a shareholder in respect of a share held in that company, excluding the return of contributed tax capital (i.e., consideration received by a company for the issue of shares). It is triggered by the payment of a dividend by any:

South African tax resident company; or
Foreign Company whose shares are listed on a South African Exchange.

Dividend payments by headquarter companies are not subject to Dividends Tax.

The rate of Dividends Tax is 20% for any dividend paid on or after 22 February 2017 (irrespective of declaration date), unless an exemption or reduced rate is applicable and is payable on or before the last day of the month following the month in which the dividend was paid.

Immigration Procedures

Visa

International travellers (citizens of other countries) who have permanent residence outside South Africa wishing to visit South Africa on a temporary basis for tourism or business purposes for a period of 90 days or less are required to have a visa. Visitors are restricted to the activity or purpose for which their visas were issued.

On entry to South Africa, a visa is considered to be a visitor’s permit. The permit’s period of validity is calculated from the date of entry into the country and will be set out under the heading “conditions” on the visa label.

The visa application process is automated through https://visa.vfsglobal.com/one-pager/dha/southafrica/english/index.html where applicants are able to apply, pay and obtain the visa online.

The requirements for visitor’s visas differ from country to country with some countries being exempted from the visa requirements. Foreigners with long term status (work permits/permit residence) in the neighbouring countries who transit the Republic to return to their employment or residence are not subject to the transit visa, provided they are in possession of proof of their status.

Requirements for visa application

A passport or travel document valid for no less than 30 days after the expiry of the intended visit;
A completed Form BI-84 (application for a visa);
A yellow-fever vaccination certificate (if required);
Statement and/or documentation confirming the purpose and duration of the visit;
Two coloured passport photographs;
 A return or onward ticket if travelling by air.

Visitor’s Visa

A Visitor Visa is applied at the South African Embassy or Mission abroad. An applicant can apply for a renewal on an existing visa subject to a decision by the Department of Home Affairs to grant the visa or permit at a Visa & Permit Facilitation Centre close to the applicant’s residence.

A Visitor Visa is a document that gives travellers permission to enter South Africa on a temporary basis for visit to family or friends and Tourism purposes.

Requirements

Duly completed online form;
Valid passport which expires in no less than 30 days after expiry of the intended date of departure from the Republic in terms of regulation 9(1)(a);

A valid return air flight ticket or proof of reservation thereof;
Proof of sufficient financial means;
A medical report not older than 6 months;
Statement or documentation detailing the purpose and duration of the visit in terms of regulation 11(1)(a);
Where the application is for the attendance of an activity or event, a letter; from the organisation under whose control the activity or event will take place, confirming such attendance and whether or not the foreigner will be remunerated and amount of remuneration;
A yellow fever vaccination certificate where necessary;
Proof of payment of the applicable fee.

Cost

DHA Application fee: R425

VFS Service Fee: R1550

Temporary Residence Visas

Business Visa

Foreigners who are contemplating investing in the South African economy by establishing a business or by investing in an existing business in the country must apply for a business visa. Applicants are required to invest a prescribed financial capital contribution.

To invest in or open a business in South Africa the applicant needs to, along with submit a to the effect that they have:  

Duly completed online form BI-1738;
Valid Passport;
Biometric enrolment fee;
A police clearance certificate from each country where the applicant resided since the age of 18 years, including the Republic of South Africa
A yellow fever vaccination certificate the applicant has travelled or intend on travelling through a yellow fever endemic area;
Medical report not older than 6 months.

Additional requirements for a foreigner who intends to establish a business in south Africa

Certificate issued by a chartered accountant registered with the South African Institute of Chartered Accountants;
At least an amount in cash to be invested in the Republic as determined from time to time by the Minister, after consultation with the Minister of Trade and Industry or;
At least an amount in cash and a capital contribution as determined from time to time by the Minister, is available ;
An undertaking by the applicant that at least 60% of the total staff complement to be employed in the operations shall be South African Citizens or permanent residents, permanently employed in various positions;  
 A letter of recommendation from the Department of Trade and Industry regarding –  
- the feasibility of the business;
- and the contribution to the national interest of the Republic.
An undertaking to register with:  
- The South African Revenue Service;
- Unemployment Insurance Fund;
- Compensation Fund for Occupational Injuries;
- Companies and Intellectual Properties Commission, where legally required and;
- Relevant professional body, board or council recognized by SAQA, where applicable.

Business Visa applications made for existing businesses require the following documents (in addition to all those listed above) to be submitted with the temporary residence application form:  

Financial statements for the preceding financial year  
The contribution to the national interest of the Republic

Cost

DHA Application fee: R1520

VFS service fee: R1550.

Work Visa

Work visas are issued only to foreigners where South African citizens with the relevant skills are not available for appointment. These visas are issued for a set duration which varies on the type of work visa being applied for and applications are lodged through Visa Facilitation Services Centres (VFS) across the country or nearest South African embassy, mission or consulate abroad.

a) General Work Visa

General work Visas are valid for the duration of the contract of employment or a period not exceeding 5 years.

Requirements

A duly completed online application form;
A passport valid for no less than 30 days after the expiry of intended visit 
Payment of the prescribed fee;
A vaccination certificate, if requested; 
Biometric fee;
Proof of financial means to cover envisaged living expenses in the Republic until the applicant receives a salary. This should be in the form of:
- bank statements;  
- cash available;
- or  travellers’ cheques; 
Medical report;  
A police clearance certificate from each country in which the applicant resided for 12 months or longer since the age of 18 years;
A written undertaking by the employer accepting responsibility for the costs related to the deportation of the applicant and his/ her dependent family members, should it become necessary, and that the passport of the employee is valid at all times for the duration of employment;
An application for a general work visa shall be accompanied by –  
- A certificate from the Department of Labour;  
- Proof of qualifications evaluated by SAQA and translated by a sworn translator into one of the official languages of the Republic;
- A contract of employment signed by both yourself and the employer;
- Full particulars of the employer including proof of registration with the Registrar of Companies;
- An undertaking by the employer to inform the Director- General upon the employee no longer being in the employ of such employer or when employed in a different capacity or role.

Cost

DHA Application fee R 1520

VFS Service fee   R 1550

b) Critical Skills Work Visa

This visa is designed to attract individuals with specific critical skills that are in demand in South Africa. Applicants must ensure they fall under the Critical Skills category before applying for a visa or permit. List of Critical Skills as per Gazette.

The Critical skills work Visa is issued for a period not exceeding five years.

Requirements

Duly completed online form;
Passport valid for no less than 30 calendar days after expiry of the intended visit;
A medical report not older than 6 months;
A radiological report not older than 6 months;
Police clearance certificate issued by the police or security authority in each country where the relevant applicant resided for 12 months or longer after attaining the age of 18 years, in respect of criminal records or the character of that applicant, which certificate shall not be older than six months at the time of its submission: (provided that the certificate shall not be required from a foreign country in the case of renewal or extension of a visa but from the republic);
A yellow fever vaccination certificate if that person travelled or intends travelling from or transiting through a yellow fever endemic area: (provided that the certificate shall not be required where that person travelled or intends travelling in direct transit through such area);
Biometric enrolment fee;
A written undertaking by the employer accepting responsibility for the costs related to the deportation of the applicant and his or her dependent family members, should it become necessary (where there is no employer: proof of sufficient financial means to the value of a minimum of r3 000 in the form of three months bank statements);
A written undertaking by the employer to ensure that the passport of his or her employee is valid at all times for the duration of his or her employment (where there is no employer: a written undertaking by the applicant to ensure that the passport of the applicant shall be valid at all times for the duration of his or her temporary visa);
Proof that the applicant falls within the critical skills category by specifically indicating the occupation/critical skill for which the application is being made. The occupation/critical skill must be on the critical skills list;
Proof of evaluation of the foreign qualification by SAQA and translated by a sworn translator into one of the official languages of the republic.
If required by law, proof of application for a certificate of registration with the professional body, council or board recognised by SAQA in terms of section 13(1)(i) of the national qualifications framework act;
A confirmation, in writing, from the professional body, council or board recognised by SAQA in terms of section 13(1)(0 of the national qualifications framework act, or any relevant government department confirming the skills or qualifications of the applicant and appropriate post qualification experience, (if not attached, VFS official to check directive 22 of 2014);
Proof of payment of the applicable fee;
Proof of financial means to cover envisaged living expenses in the Republic until you receive a salary. This should be in the form of:
- bank statements;  
- cash available; or  
- travellers’ cheques;  
- A cash deposit equivalent to the value of a return or an undertaking from the employer.

Cost

DHA Application fee R 1520

VFS Service fee R1550

c) Intra-Company Transfer Work Visa

This visa is intended for multinational companies that need to transfer foreign employees to their South African branch or subsidiary. To qualify for this visa, the employee must have been employed by the foreign company for at least 6 months and meet certain criteria regarding their qualifications and experience. This visa is initially issued for a maximum period of 4 years and can be extended while in South Africa.

Requirements

A duly completed online application form;
A passport valid for no less than 30 days after the expiry of intended visit;
Payment of the prescribed fee;  
A vaccination certificate, if required by the Act;
Proof of financial means to cover envisaged living expenses in the Republic until you receive a salary. This should be in the form of:
- bank statements;  
- cash available;
- or  travellers’ cheques.
A cash deposit of equivalent value to a return ticket;
An employment contract with the company abroad;  
A letter from the employer/company abroad confirming that the applicant will be transferred to a branch/affiliate company in South Africa;  
A letter from the South African company where the applicant will work, confirming the transfer from the parent/affiliated company abroad. This letter should specify the occupation and capacity in which the applicant will be employed and should also confirm that the maximum duration of employment will not exceed 4 years;  
An undertaking by the employer:  
- that the applicant will leave South Africa once the 4-year period comes to an end  confirming that the applicant’s passport is valid;
- that the applicant will be employed in the position for which the permit is issued;  
- That a plan is developed for the transfer of skills to a South African citizen or permanent resident.
Medical report; 
A police clearance certificate from each country in which the applicant resided for 12 months or longer since the age of 18 years;  
All required documentation for a spouse and/or children if they intend to accompany the applicant.

Cost

DHA Application fee R 1520

VFS Service fee R1550

d) Corporate Visas

A corporate visa allows a corporate entity (e.g., a mine group, farmer, etc) to employ a predetermined number of skilled/semi-skilled/ unskilled workers. A corporate visa is issued for a period not exceeding three years, Applications must be made at any VFS centres or nearest South African embassy, mission or consulate abroad.  

Requirements

Duly completed online application forms signed by the applicants;  
Provide a corroborated statement demonstrating the need to employ foreign workers and the number of foreigners to be employed;
 A certificate by the Department of Labour;
Proof of payment of applicable fees
 Proof of registration of the corporation with the:
- The South African Revenue Service;
- Unemployment Insurance Fund;
- Compensation Fund for Occupational Injuries;
- Companies and Intellectual Properties Commission, where legally required.
The applicant for a corporate visa must provide proof that at least 60% of the total staff complement that are employed are citizens and permanent residents employed permanently in various positions;  
Provide a job description and remuneration for each foreign worker;  
An undertaking to ensure that:
-  the foreigner workers have valid passports; the foreign workers will be employed only in the specific positions for which the visa are issued and  the foreign workers will leave South Africa on completion of their duties;
-  A cash deposit or guarantee for the foreign workers may be payable by the corporate entity or by the workers in the case of skilled workers.

Upon receipt of the approved number of workers, the Department of Home Affairs (DHA) will issue the corporate visa and authorization certificates for each worker hence allowing the corporate entity to start recruiting workers. The recruited workers will then apply for Corporate worker certificates issued in line with the Corporate visa for 3 years, but may not exceed the validity period of the corporate visa.  

Cost

Category	DHA application fee	VFS service fee
Corporate visa for employer or corporate entity	R1520	R1550
Corporate visa for employee or applicant	0	R1550

Permanent Residence Permit

General Work Permit

Family members may apply together with the main applicant.

Note: all documents issued by the issuing authority of the country of origin shall be original or certified copies and where applicable translated into English, which translation shall be certified as a correct translation by a sworn translator.

Requirements

Vfs appointment letter;
A duly completed DHA-947 form online. Handwritten forms will not be accepted by the Department of Home Affairs;
Payment of the application fee of R2870. If the application fee was paid to the VFS bank account or the mission, an original bank payment receipt, where the application fee was paid using the Electronic Fund Transfer (EFT)receipt for each applicant;
Valid original passport in respect of each applicant and passport photograph for all applicants one year of age and older;
A recent, passport-type, full face photograph bearing the names of the applicants on the reverse side thereof. (Machine-type or instant photographs are not acceptable);
A valid general work visa for temporary sojourn at the time of application in respect of each applicant, if the application is made in the Republic;
Original Police clearance certificate issued by the police or security authority in each country where the applicant resided for 12 months or longer after attaining the age of 18 years except for South Africa, in respect of criminal records or the character of that applicant, which certificate shall not be older than six months at the time of its submission;
Medical report for all applicants. The certificate must not be older than six (6) months;
Yellow fever vaccination certificate where necessary;
Proof of five years continuous work visa, excluding work in terms of intra company transfer, corporate and Zimbabwean special project visas;
Offer of permanent employment in the form of a contract of employment;
A letter from the employer confirming current and permanent employment, which is not older than six months;
Proof of qualifications evaluated by the South African Qualification Authority;
Work references or certificates of service (covering at least the last five years);
Physical presence for biometrics at the visa facilitation centre;
Endorsement related to the Professional Association should be attached;
Proof of five years continuous work visa, excluding work in terms of intra company transfer, corporate and Zimbabwean special project visas;
Offer of permanent employment in the form of a contract of employment;
A letter from your employer confirming your current and permanent employment, which is not older than six months;
Proof of qualifications evaluated by the South African Qualification Authority;
Work references or certificates of service (covering at least the last five years.