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South African Department of Trade and Industry » Grants
SMALL MEDIUM ENTERPRISE DEVELOPMENT PROGRAMME


The following sectors qualify for the SMEDP scheme:
  • Tourism
  • Manufacturing
  • Aquaculture
 The following sectors do NOT qualify:
  • Services
  • Travel agents
  • Farming (non value added farming activities)
Small Medium Enterprise Development Programme is available for new developments or expansions up to R100 million.


1) HOW TO QUALIFY

Tourism

A. New Projects

Applications must be at the DTI no later than 180 days after date of arrival of first paying guests.

B. Expansions

Expansions are measured in a real increase of at least 25% in accommodation. (Beds or seats in buses)
Applications must be submitted prior to the arrival of first paying guests in the expansion.
The following activities qualify:
  • Guest houses
  • B & B’s
  • Hotels
  • Lodges - including Game lodges
  • Self catering units
  • Tour operators (buses, boats, vehicles)
  • All short to medium term accommodation
  • Trains, cable cars, funiculars
Qualifying assets in four categories:
  • Land (if applicant does not reside in building)
  • Buildings (owned and/or rented - capitalised @ 15%)
  • Furniture and equipment (owned or on hire purchase)
  • Vehicles (appropriate ones owned or leased and used for the exclusive transportation of tourists)
The historical cost price(s) (contract/invoice) of qualifying assets will be used to determine the size of the grant.

Manufacturing and Aquaculture

A. New Projects

Applications must be at the DTI no later than 180 days after date of commencement of production.

B. Expansions

Applications must be submitted prior to the proposed commencement date of production, and must expand plant and equipment by 35% of cost price as shown on balance sheet.
In order to qualify a Manufacturing Business must:
  • Have investments, (qualifying capital assets) in Land and Buildings (owned or leased), Machinery and Equipment. Commercial Vehicles, Research and Development capital costs also qualify.
  • Have own equity ranging from 10 - 25% depending on the size of the project.

2) HOW MUCH IS THE INCENTIVE?

A tax free cash incentive based as a percentage of the total investment in qualifying assets.

Maximum grant is 10% per annum (3 times) if the total investment is under R5m. Maximum Investment R100 million.
Thereafter the percentage drops on a regressive scale depending on the size of the investment.
For example, if your investment in qualifying capital assets amount to R5m, you will get 10% thereof,
(which is R500 000) per year over the 3 years thus totalling R1,5m (tax free).

The 3rd year is subject to attaining a Human Resource Remuneration ratio of at least 30% of total cost.
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