South Africa boasts one of the largest and diverse economies in Africa. Some of the most vibrant sectors in the country include manufacturing, real estate, finance and business services. South Africa’s well-developed infrastructure, fast growing economy and favorable business policies have made it one of the top destinations for investors in Africa.
See also: How to Relocate to South Africa
Here is how you can start a business in South Africa:
1. Apply for a visa
If you want to setup a business in South Africa as a foreigner, you will first be required to apply for a visa. There are two kinds of visa you can apply for:
- Business visa – This is the most recommended type for an immigrant wishing to start a business in South Africa. Such visas are for people who want to invest in an existing startup or new business, and who will actually be working in the business.
- Independent financial permit – Though rarely applied for, this kind of visa offers much more benefits compared to the business visa. For instance, people that have the independent financial permit are not restricted to a specific economic activity. In addition, the holder of the permit can invest in a business without having to work in it.
However, if you are married to a South African or in a permanent relationship, you will not need any of the above visas to set up a business. Instead, you can use a life partner visa or spousal visa.
2. Register your business and intellectual property
Businesses in South Africa can take one of many forms. You could register your business as a sole proprietorship, joint venture or partnership. If you have an already existing company outside South Africa, it would be advisable to register a foreign branch. If you are registering a new company, you could choose between registering a Closed Corporation or Private Company (Pty) limited.
Besides registering your business, you should also register your copyrights, trademarks and patents. You will be required to pay an annual fee to retain the validity of your intellectual property. For more information about registrations, visit SA Company Registrations and CIPRO.
3. Register with relevant bodies
After registering your business, you will also need to register with the following bodies:
- The receiver of revenue – If your business sells goods with value added tax, you might need to register with the receiver of revenue as a VAT vendor. If you have employees, you will need to submit standard income tax or pay as you earn (PAYE) income tax.
- The Department of Labor – Businesses that employ staff need to get in touch with the Department of Labor concerning mandatory contributions.
- The Local Authority – Depending on the nature of your business, you will need to get relevant licenses from the local authority.
4. Obtain work or business permits
If you are planning to employ foreign nationals, you need to get work or business permits for them. Before approving the work permit, the Department of Home Affairs will want to know if you have registered with the Department of Labor. In addition, they will want proof that the prospective employee is qualified and experienced for the position. To get a business permit, you need to show that you have sufficient funds to invest in the business. In addition, your business is required to have at least 60% employees who are South African citizens. Applications for work and business permits can be submitted to the South African consulate in the applicant’s country of origin. Visit the Department of Home Affairs site to learn more about permits.
For an immigrant, starting a business in South Africa can be a very time consuming and frustrating process. It would therefore be advisable to enlist professional help.