How to start a business in South Africa as a foreigner

how to start a business in south africaWhen you’re exploring how to start a business in South Africa, one of your first searches might be around how to register the business.

There’s a reason we say this. Our client managers get countless enquiries every day asking about business registrations in South Africa.

Here’s what you shouldn’t forget – the visa always come first! This is the only way to be involved in a business in South Africa as a foreigner – with a valid business visa in hand.

To help you understand the process, we’ll look at all the most important things you need to have in place to apply for a South African business visa:

  • The required capital investment
  • A business plan
  • A suitable company structure
  • A desirable business
  • The required capital investment

The required capital investment

You must be able to invest a minimum of R5 million into any business you wish to start in South Africa. This investment must be made from funds introduced into South Africa from abroad.

However, you may be able to qualify for a waiver on this R5 million capital investment amount should the business be considered in South Africa’s national interest by Department of Home Affairs and the Department of Trade and Industry.

Find out more about waivers here.

A business plan

Of course a business plan is vital when starting any business, but it becomes a non negotiable part of the process when applying for a South African business visa.

To increase your chances of a positive outcome on your application, your business plan must include at least the following:

  • An executive summary. This is an overview of the business you want to start.
  • Short description of the business opportunity.
  • Operations, including things such as manpower and IT infrastructure.
  • Marketing and sales strategy.
  • Financials. This is one of the most important aspects of the business plan!

Another important aspect of your business plan is that it must show the need for the employment of South African citizens or permanent residents in permanent positions within the human resource plan and your financial projections. This is because the business visa requirements stipulates that a foreigner starting a business in South Africa must employ 60% South Africans.

A suitable company structure

The company you wish to start msut be set up in an company recognised business structure appropriate to South Africa.

Examples of such business structures are:

  • Sole proprietorship
  • Partnership
  • Public company

For further examples, have a look here.

A desirable business

Some business types are classed at undesirable in South Africa. These are:

  • Businesses that import second-hand cars into South Africa for the purpose of exporting to other markets outside of South Africa.
  • The exotic entertainment industry.
  • Security industry.

If the business you want to start fall into any of these categories, your business visa will not approved.

Everything is in place – what next?

With everything in place, and with confirmation that you do qualify for a South African business visa, you can lodge your application.

Please note: There are other requirements than just those listed here. Please contact us to discuss them in detail.

Should the outcome of your visa application be positive and you receive a business visa, you can start the hard work – getting your business off the ground.