Starting a Business - Overview Requirements for Starting a New Business Foreign investors starting up new businesses or expanding existing business operations in South Africa require business permits. - A feasibility study to be presented in the form of a business plan;
- Capital investment of R2.5 million. This may be waivered through the Department of Trade and Industry or provincial investment agencies, such as Trade & Investment KwaZulu-Natal;
- A letter from a South African-registered chartered accountant verifying the investment amount;
- An undertaking to employ at least five South African citizens or residents; and
- Registration with the South African Revenue Services – www.sars.gov.za
Permits for Foreign Employees The movement of people into South Africa and KwaZulu-Natal is controlled by the country's Immigration Amendment Act (No. 19 of 2004). In terms of this Act, foreigners require work permits to work in the country. If, however, their skills are in high demand at the time of their application, they may apply for Quota Work Permits or Exceptional Skills Work Permits, which quickens the process of being employed in South Africa.
The Intra-company Transfer Work Permit allows multi-national companies to deploy employees from other countries to work in their South African offices for a period of four years. Foreign Exchange There are no restrictions on foreign companies intending to invest in share capital. Administration in terms of portfolio investment is undertaken through the South African Reserve Bank. There are also no restrictions on the removal or repatriation of investment income or capital gains by non-residents.
All loans to South African residents from outside the common monetary area require prior exchange control approval.
Royalties, licence and patent fees for non-residents, where non-local manufacturing is involved, must be approved by the South African Reserve Bank.
The Company and Intellectual Property Registration Office (CIPRO), a unit of the Department of Trade and Industry (DTI) (www.thedti.gov.za), approves all manufacturing patents. For more information, log onto www.reservebank.co.za Registering a Business Business registrations are undertaken by CIPRO. The following business types may be formed by foreign investors: - Company (Proprietary Limited);
- Close Corporation (CC);
- Partnership;
- Sole Trader;
- Joint Venture;
- Local branch of a foreign company; and
- Business Trust.
Further details on the institutional arrangements and information on registering each of these business types may be obtained from CIPRO.
Tel: + 27 (0) 86 184 3384 or +27 (0) 12 394 9500
Email: contactcentre@cipro.gov.za
Website: www.cipro.gov.za
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