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24. May. 2024 SA Migration

Business Startup as a foreigner South Africa




Starting a business as a foreigner in South Africa can be an arduous task without enlisting professional help. There are a number of ‘hoops’ that must be circumvented and the process can be time consuming and a distraction from the all important task of establishing your business.
At SA Migration Immigration we have assisted hundreds of entrepreneurs with their ambition to create a business in South Africa and are able to boast of an unrivalled track record of success, all based on what we believe to be the most comprehensive service available.
Below we detail the important aspects of starting a business as a foreigner in South Africa but if you prefer to talk to a human being to discuss your needs, feel free to call us on any our contact numbers
Where to begin with starting a business as a foreigner in South Africa
Importantly and before you commit time and money, you should have an assessment of your circumstances and requirements carried out. Assessments, as with ourselves, should be free of charge and carry no obligation.
Very often, and understandably, people source information on the obvious, in this case the business . There is however a real alternative that should be considered, if for no other reason to ensure you have made an informed decision.
The different ’s for starting a business as a foreigner in South Africa
In order to be able to set up, invest into and work within a business in South Africa as an immigrant there are two types of you can apply for:
1. Business - Traditionally, for anyone starting a business as a foreigner in South Africa this category has been the most recommended.
Who can apply?
Business are for those individuals seeking to invest in a business, or an existing start up, and who will be working within the business.
Must there be local ownership?
No a business can be owned and run with 100% foreign ownership. However for those with a local partner this is also fine. This applies to both the business and independent financially independent.
Can I buy into or outright an existing business?
Yes, which ever Visa or category you select you can do either or indeed set up one from scratch.
Is there a minimum shareholding a foreigner must own?
As a business holder you will need to typically own in excess of 25% of the business. A Financially Independent Visa holder has no restrictions.
Is there a minimum amount of investment required?
For business holders you need to invest ZAR 5 million into the business unless you qualify for a waiver.
Investment Waiver Business Application
The normal requirement for a business dictates a cash investment of R5 million rand or capital equivalent (in the form of new machinery or equipment.
Certain business types can however apply for a waiver to reduce this stipulated investment amount.
The process for applying for a business waiver will mean the formation and presentation of a business plan. The business waiver application will be judged on the various factors in this business plan including:
• Contribution to economy.
• Feasibility of business.
• Jobs created for South African citizens or permanent residency holders.
• Desirability of the business.
Most importantly, the business waiver application, will have to demonstrate that the business fits into one of the below categories.
Business waiver applications that may apply for a waiver (by category)
Agro-processing
• Fisheries and aquaculture i.e. freshwater aquaculture and marine culture
• Food processing in the milling and baking industries
• Beverages viz. fruit juices and the local beneficiation, packaging and export of indigenousteas
• High value natural fibres viz., organic cotton and downstream mohair production
• High value organic food for the local and export market
• Biofuels production viz. bioethanol and biogas
• Processing of seed oils: tea extracts, including buchu, honeybush: and other oil derivatives(avocado, amarula etc.)
• Diversification / beneficiation of biomass sources i.e. sugar, maize
Business Process Outsourcing and IT Enabled Services
• Call centers
• Back Office Processing
• Shared Corporate Services
• Enterprise solutions e.g. fleet management and asset management
• Legal process outsourcing
Capital / Transport equipment, metals and electrical machinery and apparatus
• Basic iron and steel
• Basic precious and non-ferrous metals
• Casting of metals
• Other fabricated metal products: metalwork service activities
• General purpose machinery
• Tooling manufacturing
• Foundries
• Electric motors, generators and transformers
• Electricity distribution and control apparatus
• Insulated wire and cable
• Accumulators, primary cells and primary batteries
• White goods and associated components
Electro Technical
• Advanced telecommunications
• Software development
• Software and mobile applications
• Smart metering
• Embedded software
• Radio frequency identifications
• Process control, measurement and instrumentation
• Security and monitoring solutions
• Financial software
• Manufacturing sensors
• Digital TV and Set Top Boxes due to migration to full digital television
Textile, Clothing and Leather
• Spinning, weaving and finishing of textiles
• Knitted and crocheted fabrics and articles
• Wearing apparel except fur apparel
• Dressing and dying of fur
• Leather skins and hides beneficiation
• Consumer goods
• White goods and associated components
Boatbuilding
Boatbuilding and associated services industry
• Engines and engine systems
• Marine equipment and accessories
Pulp, paper and Furniture
• Manufacture of wood and products of wood and cork
• Manufacture of articles of straw and plaiting materials
• Manufacture of paper products: publishing, printing and reproduction
• Paper and paper products and furniture
Automotives and Components
• Engines, radiators, filters and components thereof
• Air conditioners / climate control systems
• Alarms and Tracking devices
• Axles, transmission shafts
• Body parts and panels
• Catalytic converters, silencers and exhaust systems and components
• Seats and parts thereof, seatbelts, leather covers
• Suspension and shock absorbers, springs and parts thereof
• Steering wheels, columns and boxes
• Ignition, starting equipment, gauges and instrument parts
• Lighting equipment
• Wiring harnesses, instrument panels vehicle interiors, electronic drive train components,
• Body parts
Green Economy Industries
Power generation:
• Independent power generation, energy infrastructure and alternative energy
• Nuclear Build Programme i.e. joint ventures, consortiums and the establishment of new companies to grow South Africa’s nuclear manufacturing capability and nuclear supply industry to supply into the nuclear build programme
Renewable Energy:
• Onshore wind power - manufacture of turbines/blades
• Solar PV and Concentrated Solar Power manufacture/assembly
• Biomass
• Small hydro
• Energy efficiency and energy saving industries
• Solar water heaters
• Waste Management and Recycling
• Reducing landfill
• Lowering greenhouse gas emis
• sions from landfill sites
Advanced Manufacturing
• Nano-materials
• High performance materials based on natural resources (advanced bio-compositesAdvanced materials, polymers and composites
• Medical devices, diagnostics and composites
• Space e.g. satellite manufacturers etc. and astronomy e.g. SKA, telescopes, dishes etc.
• Composites (intelligent textiles used in medical, building and construction industries)
• Continuous fibre reinforced thermoform composites
• Biochemical and biologics for applications in agriculture, industry and health/medicalsectors
• Electricity demand Site Management Solutions to improve electricity efficiency usage
• Lasers and laser-based additive manufacturing various applications
• Advanced Robotics Mobile Intelligent Autonomous Systems
• Applications in the mining industry, data collection and analysis
• Bio - manufacturing - Biochemical and biologics for applications in agriculture, industryand health/medical
• Fuel cells and Technology
Tourism infrastructure
• Accommodation - hotels, boutique hotels, lodges and resorts
• Urban integrated tourism/ entertainment precincts
• Adventure, - eco-, sport-, conference- and cultural tourism
• Infrastructure developments
• Leisure complexes and world class golf courses
• Harbour and waterfront developments
• Trans frontier conservations areas
• Tourism transport - aviation, rail, cruise liners etc.
• green building and green technologies for tourism attractions and activity - based tourism, museums and heritage
Chemicals, plastic fabrication and pharmaceuticals
• Basic chemicals
• Water treatment chemical products
• Man-made fibres
• Plastic products: polypropylene and polyvinculchloride
• Medical (drips and syringes), manufacture of active pharmaceutical ingredient
• (APIs) for key anti-retrovirals (ARVs)Manufacture of reagents for AIDS/HIV diagnostics
• Production of vaccines and biological medicines
Creative and Design Industry
• Film studios, treaty film co-production ventures, distribution infrastructure
• Servicing of foreign productions
• Production of film and documentaries, commercials, stills photography and Multi-media
• Post-production
• Design
• Jewellery manufacturing and design
• Fashion design
Oil and Gas
• Maintenance ship and rig repair
• Fabrication - equipment and specialised components
• Specialised services - training and accreditation
• Specialised services - non-descriptive testing, inspection services, SHEQ services
• Exploration - technical services: seismic surveys, logging, environmental impact assessments, etc.
• Exploration - offshore
• Exploration - onshore shale gas
• Exploration - onshore coal bed methane and underground coal gasification
• Infrastructure - refineries (Oil and GTL)
• Infrastructure - terminals LPG/LNG import, storage and distribution
• Infrastructure - ports and associated infrastructure
• Infrastructure - storage
• Logistics - pipeline
Mineral beneficiation
Downstream processing and value addition
Infrastructure Development
ICT
• IT
• Wireless and Telecom
• Electronics
• Geoamatics and Digital media
• Software Development
• Advanced programming

Must I employ South Africans?
There is a requirement that employees are at least 60% South Africans (citizens or permanent residency holders). These must be employed on a permanent basis in the business if you hold a business . There are no such requirements for the Independent Financial Visa holder.
Can I apply for permanent residency?
Starting a business as a foreigner in South Africa, via the business route, would first mean obtaining temporary residency. Once in receipt of this, permanent residency can be applied for.
Independent Financial Visa applicants may only apply for permanent residency. This of course has its attractions but the disadvantage can be that permanent residency takes longer for the Department to process.
What sort of company must I set up?
Typically a Pty Ltd would be the appropriate company structure and you can read more about the various business structures below .
If I am not working in the business, just investing, do I need a business ?
Business ’s are designed for the holder to work in the business. Foreign investors do not require a business . Any foreigner may own a business with no restriction. However should they intend to work within the business or come to live in South Africa a would be required.
How do I prove my business concept and my credentials?
When making a business application, part of the application’s supporting evidence is the submission of a comprehensive business plan. The business plan purpose is twofold - one, and in the traditional sense, to prove the business will be successful, and two, to highlight some of the home affairs requirements.
Would my business need to be audited?
There are requirements for businesses with a certain turnover to be audited and also others like estate agents are required from a regulatory prospective. There is also an argument for it being good practise for all businesses to be audited..
The decision, subject to these rules, is up to the business holder.
Can I set up an NGO in South Africa as a foreigner?
Yes, non profits are able to set be up
How long does the application process take?
There are two aspects to the application process:
1. The compilation of the or Visa application.The compilation of the business application is more time consuming as this stage involves not only the Home Affairs requirements but also supporting documentation such as the company registration paperwork and the memorandum of incorporation. In addition other departments such as the Department of Trade and Industry are involved. Compilation can therefore take 4 - 12 weeks.
Starting a Business as a foreigner in South Africa
Starting a Business as a foreigner in South Africa
Starting a business as a foreigner in South Africa can be an arduous task without enlisting professional help. There are a number of ‘hoops’ that must be circumvented and the process can be time consuming and a distraction from the all important task of establishing your business.
At SA Migration Immigration we have assisted hundreds of entrepreneurs with their ambition to create a business in South Africa and are able to boast of an unrivalled track record of success, all based on what we believe to be the most comprehensive service available.
Where to begin with starting a business as a foreigner in South Africa
Importantly and before you commit time and money, you should have an assessment of your circumstances and requirements carried out. Assessments, as with ourselves, should be free of charge and carry no obligation.
Very often, and understandably, people source information on the obvious, in this case the business . There is however a real alternative that should be considered, if for no other reason to ensure you have made an informed decision.
Below we look at the two routes for starting a business as a foreigner in South Africa and discuss the merits and pitfalls of each.
The different ’s for starting a business as a foreigner in South Africa
In order to be able to set up, invest into and work within a business in South Africa as an immigrant there are two types of you can apply for:
1. Business Visa - Traditionally, for anyone starting a business as a foreigner in South Africa this category has been the most recommended.
Who can apply?
Business are for those individuals seeking to invest in a business, or an existing start up, and who will be working within the business.
The Independent Financial skills Visa is a Visa that is not restricted to a certain economic activity. As such it allows the holder total freedom to invest into a business, whether they will be working in it or not. There is also no obligation to invest, or start a business. In short the holder of the Independent Visa is free to make their own decision as to whether they run a business, work or even retire.
Must there be local ownership?
No a business can be owned and run with 100% foreign ownership. However for those with a local partner this is also fine. This applies to both the business and independent financially independent.
Can I buy into or outright an existing business?
Yes, which ever Visa or category you select you can do either or indeed set up one from scratch.
Is there a minimum shareholding a foreigner must own?
As a business holder you will need to typically own in excess of 25% of the business. A Financially Independent Visa holder has no restrictions.
Is there a minimum amount of investment required?
For business holders you need to invest ZAR 5 million into the business unless you qualify for a waiver which can be as low as R150,000
Can my partner or children work in the business?
Partners of the business holder can work in the business but not for remuneration. Children would not be able to work in the business unless a work was granted in their own right. If you have children still in education years a study would be required.
Partners of Independent Financial Visa holders will need to secure residency in their own right which would involve a spousal or life partner application. Dependent children would require a study .
Must I employ South Africans?
There is a requirement that employees are at least 60% South Africans (citizens or permanent residency holders). These must be employed on a permanent basis in the business if you hold a business .
Can I apply for permanent residency?
Starting a business as a foreigner in South Africa, via the business route, would first mean obtaining temporary residency. Once in receipt of this, permanent residency can be applied for.
Independent Financial Visa applicants may only apply for permanent residency. This of course has its attractions but the disadvantage can be that permanent residency takes longer for the Department to process.
If I am not working in the business, just investing, do I need a business ?
Business ’s are designed for the holder to work in the business. Foreign investors do not require a business . Any foreigner may own a business with no restriction. However should they intend to work within the business or come to live in South Africa a would be required.
How do I prove my business concept and my credentials?
When making a business application, part of the application’s supporting evidence is the submission of a comprehensive business plan. The business plan purpose is twofold - one, and in the traditional sense, to prove the business will be successful, and two, to highlight some of the home affairs requirements.
There is no requirement for a Financial Independent application to submit a business plan.
Would my business need to be audited?
There are requirements for businesses with a certain turnover to be audited and also others like estate agents are required from a regulatory prospective. There is also an argument for it being good practise for all businesses to be audited..
The decision, subject to these rules, is up to the business holder.
Can I set up an NGO in South Africa as a foreigner?
Yes, non profits are able to set be up.
How long does the application process take?
There are two aspects to the application process:
1. The compilation of the or Visa application.The compilation of the business application is more time consuming as this stage involves not only the Home Affairs requirements but also supporting documentation such as the company registration paperwork and the memorandum of incorporation. In addition other departments such as the Department of Trade and Industry are involved. Compilation can therefore take 4 - 12 weeks.

DTI Application and Documents that are required with a more detailed explanation on areas that may require further expansion
Type of application indicate with an X:
New application: Extension: Permanent Residence:
Applicant and Company details

Executive summary (five pages maximum) which should include the following: (please add lines if needed)
1. Description of the business
____________________________________________________________________________Here you will explain what kind of business you wish to start , this is essentially an overview of your business ____________________________________________________________________________
2. The expertise of the applicant (qualifications, work experience and applicable entrepreneurial expertise)
____________________________________________________________________________Here you explain what makes you believe that you have the experience and qualification to run or start a successful business
3. Services
____________________________________________________________________________What exactly will you be selling at your business or what services will you provide ____________________________________________________________________________

4. Market
____________________________________________________________________________Who will you be selling to , what is the target market or better still who will buy your product or service ____________________________________________________________________________

5. Competitive advantage
____________________________________________________________________________What do you believe that you have or the technique you will be using to sell your products and what will give you an edge you’re your competitors ____________________________________________________________________________

6. Management and employees (organizational chart optional)
____________________________________________________________________________How will you set up the management and staff of your business and you will provide a chart of who is is charge and who reports to whom ____________________________________________________________________________


7. Financial projections
____________________________________________________________________________here you will explain you’re your startup costs , expected month sales and expenses____________________________________________________________________________

8. Contribution to national interest (reference applicable Immigration Regulations as well as priority economic sectors as promoted by the DTIC)
____________________________________________________________________________What area of the economy your business will fit into based on the suggested list of DTI above____________________________________________________________________________

9. Feasibility of the business
____________________________________________________________________________Here you will explain why you believe your business will succeed ____________________________________________________________________________

10. Other (if applicable)
____________________________________________________________________________Here you will add any other information you believe that you think the DTI may need to know about you

11. Value of the cash or capital contribution
____________________________________________________________________________How much exactly will you invest and how will the money or technology be invested into your business ____________________________________________________________________________


12. Motivation if a waiver of the cash / capital contribution is required
____________________________________________________________________________IIf you are investing less than R5 million why do you think DTI should approve your investment that is lower ____________________________________________________________________________




Supporting documents:

1 Copies of the applicant’s passport with personal details including valid temporary residence permit/visa endorsements (if applicable)

2 A certificate or a factual finding report (in relation to the investment of cash or capital to be or already invested - as per the Immigration Act 2002 Act No 13 of 2002 and Regulations) issued by a chartered accountant registered with the South African Institute of Chartered Accountants, a professional accountant registered with the South African Institute of Professional Accountants or a business accountant registered with the South African Institute for Business Accountants.
 The certification must be complying with the relevant professional bodies’ requirements, and
 Proof of registration with the professional body, to be included.
 Copies of the documents used to determine the investment
3 In the case of a first application, an undertaking to meet each of the specified requirements listed must be submitted.
 Undertaking by the applicant that at least 60% of the total staff compliment to be employed in the operations of the business shall be South African citizens or permanent residents employed permanently in various positions
An undertaking (or proof) to register with the-
 South African Revenue Service;
 Unemployment Insurance Fund;
 Companies and Intellectual Properties Commission (CIPC); and
 Relevant professional body, board or council recognised by SAQA in terms of section 13(1)(i) of the National Qualifications Framework Act where applicable: (Provided that upon registration, all certificates shall be submitted to the Director-General) (If applicable)
 If the investment is into an existing business, financial statements (one set) of the preceding financial year is required
For renewal applications:
 Tax clearance certificate issued by the South African Revenue Service from the date on which the business became operational;
 Proof of contributions made to the Unemployment Insurance Fund (UIF);
o should be in the format as per the declaration report on the Department of Labour and Employment / UIF website.
o the declaration should prove that at least 60% of the staff complement employed in the business are citizens or permanent residence employed permanently in various positions in the business.
 Letter of Good Standing from the Department of Labour and Employment
 Proof of registration with Companies and Intellectual Properties Commission (CIPC)
 Proof of registration with the professional body, board or council recognised by South African Qualifications Authority (SAQA) in terms of section 13(1)(i) of the National Qualifications Framework Act. (If applicable)
 Financial statement in respect of the preceding financial year
4 In case of a partnership, a copy of such written partnership agreement(s) containing full details of the partners/directors and their residential status in the Republic - where and if applicable - must be submitted
5 Proof of previous dtic recommendation letter/s or certificates issued - if applicable
6 Proof of incentives received from the Department and/or any other Department and/or organ of state, if applicable
7 Copy of rejection letter from the Department of Home Affairs - if applicable
8 Copy of waiver letter from the Department of Home Affairs - if applicable


www.samigration.com



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10. Jun. 2024 City Press

SA`s population is getting older: `New report offers government blueprint for future planning`

Expert says the new report gives government an opportunity to plan ahead to meet the country’s needs. The South African population has grown by 1.1% in the past year to about 63.1 million. Of this number, 51.6 million are black Africans, followed by coloured people and the white population projected at about 5 175 608 and 4 607 554, respectively. People of Indian and Asian origin are estimated to be at 1.7 million. V.5426

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07. Jun. 2024 BusinessTech

South Africa scores massive own-goal

Woes within South Africa’s visa processes have left businesses and skilled workers in limbo, hurting investment and business activity as a result. Recently, French diplomats warned that South Africa’s strict visa requirements are driving investors away. In addition to this, Western Cape Provincial Minister of Finance and Economic Opportunities, Mireille Wenger, said that a key obstacle attracting investment and expanding business is “the broken South African visa regime.” “To facilitate foreign investment, companies need to be able to easily access South Africa and those who apply for critical skills visas typically help to develop new and existing sectors, in line with international best practice or by helping to new industries through skills development,” said Wegner. Companies aiming to operate in the country must invest a minimum of R5 million and ensure at least 60% of their employees are South African. V.5419

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Articles

21. Jun. 2024 Business Tech

Big loss for Home Affairs in South Africa

The Department of Home Affairs has lost its legal battle over Zimbabwean Exemption Permits (ZEPs). The Helen Suzman Foundation and the Consortium for Refugees and Migrants in South Africa (CoRMSA) previously took the Minister of Home Affairs Aaron Motsoaledi to court over his termination of the ZEP under the Promotion of Administrative Justice Act, 2000 (PAJA). V.5436

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