South Africa

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Local business incentives - Legal forms of companies - Registration and licensing procedures - Legal framework - Foreign exchange control - Regulations concerning equity investment - FDI inflows - Expertise of the political risk

Local business incentives

Various governmental or regional assistances are granted to national or foreign investors. Both the TISA (Trade & Investment South Africa), a DTI (Department of Trade & Industry) subdivision and the Trade & Investment KZN agency, which encourages new businesses in province of KwaZulu-Natal, should be contacted.


Legal forms of companies

Form Number of partners/shareholders Minimum and/or maximum capital Liability Registration fee Release of financial documents
Private Limited Company No minimum. Maximum 50 shareholders. No minimum capital. Liability is limited to the amount contributed. About ZAR 2.000 - 3.000. No
Public Limited Company Minimum 7 shareholders. No minimum capital. Liability is limited to the amount contributed. About ZAR 2.000 - 3.000. Yes
Close Corporation Maximum10 shareholders. No minimum capital. Liability is limited to the amount contributed. About ZAR 2.000 - 3.000. No
Partnership is similar to a general partnership and to a limited partnership or a partnership limited by shares. Maximum 20 partners. No minimum capital. Liability of the active partners is unlimited. Liability of the sleeping partner is limited to the amount contributed. No legal registration is required. No

Registration and licensing procedures
According to the Company Law, a foreign company that sets up a branch in South Africa has to register it as a " foreign company". As for registration, it is necessary to deposit with the Register of Companies a copy of the company's status authenticated by a notary, as well as specific forms. Registration takes about a week and costs about ZAR 3.000.
Registration of the capital and of the status should be made with the Clerk's Office of the Commercial Court where the company is located. Formalities concerning the establishment of Close Corporation should be fulfilled with a special Register located in Pretoria.

Legal framework
Foreign investors are not required to obtain a preliminary authorization. However investors can meet difficulties trying to break into certain sectors. Furthermore, capital transfer and profit repatriation are subject to an authorization issued by the Central Bank.

Foreign exchange control
The currency exchange control is now more flexible. Consequently, free conversion of currencies is carried out, as well as the right to transfer. There is also an applicable exchange rate.

Regulations concerning equity investment
Companies have to appoint a South African resident as the company's legal representative. Moreover, foreign companies have to appoint an auditor.  

Foreign Direct Investment inflows in South Africa

FDI inflows 2003 2004 2005 World rank (*)
FDI inflows (USD million) 734 799 6379 103/141
Source : UNCTAD - World Investment Report
Note : (*) World Rank = UNCTAD Inward FDI Performance Index. It is a measure of the extend to which a host country receives inward FDI relative to its economic size. It is calculated as a ratio of the country's share in global FDI inflows to its share in global GDP.


Last modified in 2007 - ongoing update
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