Operating a Business in South Africa as a Foreigner

South Africa, Africa's 2nd largest economy is home to Africa's top 10 largest companies by market capitalization.

In 2020, South Africa scored 67 points in the ease of doing business index, making it one of the best business environments in Africa. South Africa was particularly attractive in the areas of starting a business and protecting minority investors. For which it scored 81 and 80 index points, respectively.

Understanding the legal, regulatory, and economic landscape is crucial for foreigners who want to tap into the thriving South African market.

How to Register Your Company in South Africa as a Foreigner

The process of registering a company in South Africa has become more streamlined with the introduction of BizPortal, a one-stop online platform. However, due to the requirements for foreigners, entrepreneurs venturing into the South African market alone may find it cumbersome and time consuming.?

With Norebase, you get a True Partnership. As a business, our growth and success lie in ensuring that you have the smoothest transition into your new market. This means that you have partners committed to your success who will navigate the peculiarities of the South African market for you.

In order to register a business, foreigners are required to have the relevant visa.? A business permit (business visa) is a requirement for foreign entrepreneurs who intend to establish or run a foreign-owned business.

Two conditions prescribe the eligibility for a business visa:

1. Invest a prescribed amount of R5 million into an existing business, or provide a business plan with evidence of the R5 million capital contribution.
2. Establish a business which is of national interest to South Africa, as stipulated in the IPAP policy document (No minimum capital investment required).?

Post incorporation, you will need to:

• Obtain Relevant Permits and Licenses: Depending on your industry, you may need additional permits from specific authorities.
• Register for Taxes: Register with SARS (South African Revenue Service) for taxes like income tax, Value Added Tax (VAT), and Pay As You Earn (PAYE) for employees.

Both services are provided by Norebase.

Compliance Considerations

Annual Returns and Copy of share register showing UBO of shares: Every company is required to file annual returns with the Companies and Intellectual Property Commission on an annual basis.

CIPC Compliance Checklist: South African Law requires every company to file a compliance checklist with the Companies and Intellectual Property Commission yearly.

Annual Financial Statements: Every company is required under South African law to prepare annual financial statements within 6 months after the end of its financial year end and filed on the same date as the annual return save in certain instances.?

Appointment of Public Officer: Every company is required to appoint a public officer one month after it begins to carry on business.

Companies Income Tax: Every company which derives its income from within or outside South Africa is required to pay companies income tax annually.

Provisional Tax Returns: Every employer is required to deduct income tax from employees' remuneration, remit to the South African Revenue Service every month and declare its compliance via EMP201.

Value Added Tax: All suppliers of goods and services having an annual turnover exceeding ZAR 1 million or which are expected to exceed ZAR 1 million in the next 12 months are required to register as VAT vendors and remit to the South African Revenue Service.

PAYE: Every employer is required to deduct income tax from employees' remuneration, remit to the South African Revenue Service every month and declare its compliance via EMP201.

Broad-Based Black Economic Empowerment (BEE): ?BEE stands as a cornerstone policy in South Africa's journey towards a more equitable and inclusive economy. It does so through a multi-pronged approach that encourages and incentivizes the inclusion of Black people in various aspects of the economy, including:

• Ownership: Increasing Black ownership of businesses and assets.
• Management: Promoting Black representation in leadership and decision-making positions.
• Skills development: Investing in education and training to equip Black South Africans with the necessary skills to compete effectively.
• Procurement: Encouraging businesses to source goods and services from Black-owned suppliers.

Staying Compliant

AutoComply is a transformative technology that serves as a powerful ally in streamlining compliance processes. Its robust features empower businesses to:

• Effortlessly identify applicable obligations through a comprehensive discovery dashboard.
• Automate task management and document generation, minimizing manual errors and missed deadlines.
• Receive real-time alerts on upcoming compliance deadlines via email, Slack, and Teams.
• Seamlessly manage compliance documents with a secure and organized document management system.
• Conduct comprehensive screening for Politically Exposed Persons (PEPs) and sanction watch lists.

Click here to download the complete guide to operating a business in South Africa.

Discover how AutoComply can simplify your compliance journey and propel your business toward uncompromised success in South Africa.

Get in touch to take the first step towards assured success.