South Africa has a well-developed legal system with an independent judiciary that
ensures protection of individual and investor rights. The country has generally
few restrictions on investors and investment in the country. Some of the key
factors to consider when investing in Tshwane include:
Company Registration and Administration
The following six principal methods of doing business in South Africa are
available to an investor:
• Company (public or private) incorporated under the Companies Act 71 of
2008.
• Personal Liability Company
• Partnership
• Business Trust
• Sole Proprietorship
• External Company (branch of a foreign company)
Investment Protection Legislation
The Protection of Investment Act 22 of 2015 specifically gives foreign investors
similar rights and protections available to South Africans. The Act was
introduced to reduce the need for foreign arbitration thus reducing the costs of
managing and maintaining partnerships between investors and their local
partners.
Duty Drawback Scheme
Duty drawback schemes provide refunds for import duties paid on the materials
used in the production of goods that are re-exported. Drawbacks are administered
by the International Trade Administration Commission (ITAC) of South Africa and
the manufacturers may apply for refunds after the final product is exported (www.itac.org.za)
Taxation and Double Taxation Agreements
South Africa has a highly regarded tax system which is resident based. Non
residence are taxed on an income sourced from South Africa. The 2019 personal
tax rates start at 18% for income higher than R195 850 per annum and the
marginal peak rate is 45%. Companies pay a tax rate of 28% on profit r and a
further 20% on declared dividends to shareholders. More information on taxation
and the tax table are available at www.sars.gov.za.
Land and buildings
There are no restrictions for foreign investors to acquire property in the
country. In order for foreign investors to acquire property, they must register
as an external company in terms of the Companies Act 71 of 2008.
Exchange Control and Remittance of Funds
Exchange controls on South African residents are enforced by the South African
Reserve Bank (SARB). There are no restrictions on foreign investors to acquire
companies or businesses in South Africa and additionally, the acquisition of
shares or introduction of capital does not require SARB approval. Foreign
investors can freely remit dividends and investment capital out of the country
after applicable taxation of such.
Employment and labour relations
The main regulations relevant to investors include the following:
• Basic Conditions of Employment Act
• Labour Relations Act
• Skills Development Levies Act
• Skills Development Act
• Employment Equity Act
• Occupational Health and Safety Act
• Compensation for Occupational Injuries
• Unemployment Insurance Act, 2001
Detailed information on the labour regulations can be accessed from www.labour.gov.za
Financial Services
A South African registered company can open a bank account with any financial
institution. Foreign residents require a valid residency or work permit to open
a bank account. A foreign owned company can raise debt capital in South Africa
limited to its effective equivalent capital held locally. Financial services
companies need to register with the Financial Sector Conduct Authority (FSCA)
Financial Services
A South African registered company can open a bank account with any financial
institution. Foreign residents require a valid residency or work permit to open
a bank account. A foreign owned company can raise debt capital in South Africa
limited to its effective equivalent capital held locally. Financial services
companies need to register with the Financial Sector Conduct Authority (FSCA)
Environmental Legislation
All new development and business activities which impact the environment require
Environmental Impact Assessments (EIA) to be completed before commencement.
Visit the Department of Environmental Affairs for more information: www.environment.gov.za
