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SPECIAL FEATUREEstablishing a businessin South AfricaSouth Africa has eased the barriers to doing business for locals as well asinternational companies and individuals.and reporting requirements. Under new legislation,no new Close Corporations can be created but CCscan convert to companies.Registration of companyThe company must be registered with theCompanies and Intellectual Properties Commission(CPIC) in Pretoria within 21 days of the companybeing started. There are a range of administrativeprocedures that need to be fulfilled.The EU, represented here by the prime ministers ofNetherlands and Denmark with South African PresidentCyril Ramaphosa, is helping to create an environmentfor greater investment in renewable technologies.South Africa has a sophisticated legal,regulatory and banking system. Settingup a business in South Africa is a relativelystraightforward process with assistancebeing offered by organisations such as theDepartment of Trade, Industry and Competitionand provincial investment agencies like theMpumalanga Economic Growth Agency (MEGA).South African law regulates the establishmentand conduct of businesses throughout the country.Tax, investment incentives, regulations governingimports, exports and visas are uniform throughoutthe country.The particular environment varies from provinceto province with regard to the availability of humanand natural resources, the infrastructure and supportservices, business opportunities and the quality oflife. In this respect, MEGA can offer specific adviceabout the business environment in the province.Business is regulated by the Companies Act andthe Close Corporation Act, which cover accountingBank accountA business bank account must be opened in thecompany’s name with a bank in South Africa.Registration with the receiver of revenue• As a Provisional Taxpayer• As a VAT vendor• For Pay As You Earn (PAYE) income tax payable onmoney earned by employees• For Standard Income Tax on EmployeesRegistration with the Department of LabourBusinesses employing staff will have to contactthe Department of Labour regarding mandatorycontributions to the Unemployment InsuranceFund (UIF). Register with CompensationCommissioner for Compensation Fund: Fileswith the Compensation Fund (in the Departmentof Labour) for accident insurance (Workmen’sCompensation).Registration with the local authorityRelevant only to businesses dealing in freshfoodstuffs or health matters.Other procedures• Checking exchange control procedures (notethat non-residents are generally not subject toMPUMALANGA BUSINESS 2025/2628PHOTO: GCIS
SPECIAL FEATUREexchange controls except for certain categoriesof investment).• Obtaining approval for building plans• Applying for industry and export incentives• Applying for import permits and verifying importduties payable• Registering as an exporter if relevant and applyingfor an export permit.Business entitiesThere are a variety of forms which businesses cantake, including private and public companies,personal liability companies, non-profit companies,state-owned companies and even branches offoreign companies (or external companies).Branches of foreign companies fall underSection 23 of the Companies Act of 2008 and arerequired to register as “external companies” withthe CIPC. An external company is not required toappoint a local board of directors but must appointa person resident in South Africa who is authorisedto accept services of process and any noticesserved on the company. It must also appoint aregistered local auditor and establish a registeredoffice in South Africa.Patents, trademarks and copyrightsTrademarks (including service marks) are valid foran initial period of 10 years and are renewableindefinitely for further 10-year periods. Patents aregranted for 20 years, normally without an optionto renew. The holder of a patent or trademarkmust pay an annual fee in order to preserve itsvalidity. Patents and trademarks may be licensedbut where this involves the payment of royaltiesto non-resident licensors, prior approval of thelicensing agreement must be obtained fromthe dtic. South Africa is a signatory to the BerneCopyright Convention.Permits for foreign nationalsWork permitsIn considering whether or not to grant a workpermit, the Department of Home Affairs will firstevaluate the validity of the offer of employmentby conducting a number of checks to confirmthe following:• Has the Department of Labour been contacted?• Has the position been widely advertised?• Is the prospective employer able to prove that heor she has tried to find a suitably qualified localemployee prior to hiring a foreigner?• Is the prospective employee appropriately qualifiedand do they have the relevant experience?Business permitsForeign nationals who wish to establish their ownbusiness or a partnership in South Africa must,apart from having sufficient funds to supportthemselves and their family, be able to invest atleast R2.5-million in the business.The funds must originate overseas, be transferableto South Africa and belong to the applicant (ieemanate from the applicant’s own bank account).The business must also create jobs for South Africancitizens. After six months to a year, proof will haveto be submitted that the business is employingSouth African citizens or permanent residents,excluding family members of the employer.Applications for work permits for selfemploymentcan only be lodged at the SouthAfrican Consulate or Embassy in the applicant’scountry of origin. The processing fee is US6.The applicant would also have to lodge arepatriation guarantee with the consulate/embassyequivalent to the price of a one-way flight fromSouth Africa back to his or her country of origin.This guarantee is refundable once the applicanthas either left South Africa permanently or obtainedpermanent residence. Any application for anextension of a business permit may be lodgedlocally. The processing fee per passport holder isR425. Some countries also need to pay R108 perreturn visa.A list of countries to which this applies isavailable from the Department of Home Affairs.MEGA assists investors in applying for therelevant work permits to conduct their business.What can MEGA do for you?MEGA will help new businesses by assistingin project appraisal and packaging, puttinginvestors in touch with relevant agencies andgovernment departments, alerting investorsto investment incentives and setting up jointventures where required. ■ mega.gov.za29 MPUMALANGA BUSINESS 2025/26
