South Africa is open for business and welcomes both multinational corporations and foreign entrepreneurs looking to set up an office or new business in the country. Detailed instructions and processes for a variety of business structures, including public, private and external companies in South Africa, closed corporations, corporate visas, and business incentives can be found on official websites, including the Department of Trade and Industry’s (DTI) at www.thedti.gov.za.
Before starting a business in a foreign country, including South Africa, there are many things to consider. Here are five tips that we’ve identified to get your business started in South Africa:
Understand the Country’s (and City’s) Demand for Your Service or Product
Never enter blindly into a new business venture. Do your homework and know whether there is a need for your business in the marketplace. Even a good idea can fail if there are too many companies out there doing what you’re doing. Shop around, ask around, do your due diligence to ensure you have something viable before making a large investment in the country and the particular city where you might reside.
Obtain Legal advice
Before starting any business, you should find a knowledgeable and trustworthy lawyer. Good legal advice will help you identify the tax breaks that are available and will help you navigate through the bureaucratic process.
Decide the Type of Business That Best Suits Your Venture:
The Companies Act 71 of 2008, as amended by Act 3 of 2011, governs the formation of companies in South Africa. The most basic categorization is the division between companies for-profit and non-profit companies. For-profit companies can be further sub-divided into state-owned companies, private companies, personal liability companies and public companies. Research well and consult with your lawyer to know what is best for you and your company.
Understand the Corporate Visa Requirements
As a business proprietor who may need a visa and as someone who may need to hire foreign workers, it is important to understand how visas work in South Africa. Corporate worker certificates are issued for a maximum period of three years and the worker’s spouse and children do not qualify for visas by extension. For workers’ families to accompany them to South Africa, the dependents need to independently qualify for their own visas. The recent changes to this visa type have caused many corporate visa holders to reassess how they utilize their corporate visas and the accompanying corporate worker certificates. Organizations in some fields should consider intra-company and critical skills visas.
Research all available government trade and investment agencies
This will help you create an arsenal of knowledge from which to make decisions and put you in a position of strength. The fewer the unknowns the better.
South Africa provides a lifestyle agreement to many expats. If your research shows it is a good place to start your business, too, you have discovered a winning situation.