How To Register and Start A Business In South Africa – It is quite simple to start a business in South Africa. Foreigners (apart from business and employment visas) and locals do not need permissions to start a business.
Normally, a variety of administrative processes must be followed.
List Of Steps On How To Register and Start A Business In South Africa :
Following the acquisition of business and employment permits (applicable solely to foreigners), the following actions must be taken:
• Company Registration
Within 21 days after the company’s formation, it must be registered with the South African Registrar of Companies in Pretoria.
• Registration with the Revenue Receiver
As a Provisional Taxpayer o as a VAT seller o for Employee Pay As You Earn (PAYE) Income Tax o for Employee Standard Income Tax
• Membership in the Cape Metropolitan Council or a District Council
Businesses that employ people pay a tax to the CMC based on their gross income or compensation.
• Registration with the Labor Department
Employers must contact the Department of Labour about obligatory contributions to the Unemployment Insurance Fund (UIF).
• Registration with the local government
Only enterprises dealing with fresh goods or health issues are needed to register with the local government.
• Other processes include: o Checking Exchange Control Procedures (Please keep in mind that non-residents are normally not subject to exchange controls unless they invest in specified categories) (See the Exchange Control page for more information)
• Obtaining clearance for construction plans o Applying for industry and export incentives o Applying for import licenses and confirming import charges payable o Registering as an exporter and applying for an export permit
Entities in Business
Private and public firms, close corporations, partnerships, joint ventures, and branches of foreign enterprises are all examples of business structures (or external companies). Companies and close companies are different legal entities from their members. Close companies may have up to ten shareholders, who must all be natural individuals.
Foreign investors often utilize a company’s and a branch’s private versions. Foreign persons employ close corporations on occasion, but their usage is limited since exchange control restrictions apply more severely to such firms.
Foreign company branches are subject to the Companies Act of 1973 and must register as “external companies” with the South African Registrar of Companies in Pretoria. An external business is not obliged to designate a local board of directors, but it must appoint a South African resident who is authorized to receive service of process and any notifications sent on the firm. It must also appoint a licensed local auditor and open a branch in South Africa.
Copyright, Patents, and Trademarks
Trademarks (including service marks) are valid for 10 years and are renewed forever for further ten-year periods. Patents are typically awarded for 20 years with no possibility to renew. A patent or trademark holder must pay an annual fee to keep their patent or trademark valid.
Patents and trademarks may be licensed, however prior approval of the licensing agreement from the Department of Trade and Industry is required if royalties are to be paid to non-resident licensors.
South Africa has ratified the Berne Copyright Convention.
Foreign Nationals’ Business and Work Permits
A visitor visiting South Africa on vacation may not apply for a work visa or a permission to engage in self-employment. He or she must return to their home country and apply for these permits at the South African Consulate.
• Permits to Work
When deciding whether to grant a work permit, the Department of Home Affairs will examine the validity of the offer of employment by determining whether the Department of Labour was contacted, whether the position was widely advertised, and whether the prospective employer can demonstrate that he or she tried to find a suitably qualified local employee and that the prospective employee is appropriately qualified and has the relevant experience. Close family members will be given preference, such as a father who wants to hire his son.
• Business Licenses
Foreign nationals who want to start their own firm or form a partnership in South Africa must be able to spend at least R2.5 million in the venture, in addition to having enough money to maintain themselves and their families. The monies must come from outside of South Africa, be transferrable, and belong to the application (i.e. come from the applicant’s own bank account).
The company must also create jobs for South Africans. After six months to a year, documentation that the firm employs South African nationals or permanent residents, excluding family members of the employer, will be required.
Work permit applications for self-employment can only be submitted at the South African Consulate in the applicant’s home country. The charge for processing is US$186. The applicant would also be required to submit to the Consulate a repatriation guarantee equal to the cost of a one-way ticket.
flight from South Africa to his or her home country This assurance is refundable once the applicant has either permanently departed South Africa or gained permanent residency.
Any application for a business permit extension must be made locally. The processing charge is R425 per passport bearer. Some nations also charge R108 per return visa. The Department of Home Affairs maintains a list of nations to whom this applies.