Previously known as a business permit, the business visa is required by the many immigrants to South Africa who have a desire to set up their own business in South Africa. Often they can be thwarted in their attempts due to the regulations surrounding the obtaining of a business visa and may need to seek an alternative option. This is where the Financially independent permit can come into play.
Why might you not get a business visa?
In the first place it may be unappealing to some business people as the process is normally to first obtain a business visa (issued for a maximum of 3 years) and upon receipt of this then apply for a business visa (permanent residency). Many applicants seek the security of a permanent residency from day one of their immigration and are not willing to put up with the risk of investing into a business with only a 3 year visa.
Typical examples of this would be:
- Those who seek to open a guest house.
- Those who wish to open a service business with few staff.
- Those whose business does not demand the current minimum investment.
- Applicants investing into a business which is predominantly management run.
- Those applicants who cannot meet the business visa criteria.
- Those applicants who seek the reassurance of permanent residency from day one of their immigration.
- Where the business is more of a hobby or additional income stream.
- Where the business activities/industry is provisioned in the DTI undesirable list.
- The nature of the business may not be feasible for employment of South African staff within the first 2 years. The forecast of the business is that you will only have profits for employment in later years.
Business visa versus Financially Independent Permit
When you apply for a business visa there are a number of criteria to be met:
- A minimum investment into the business (currently R2,5 million but being reviewed)
- A need for 60% of all employees to be South African
- A minimal amount of jobs created
- The setting up and ongoing expense of a formal business structure
- A detailed business plan
- Various undertakings to the South African Revenue Service, Unemployment Insurance Fund, Compensation Fund for Occupational Injuries and Diseases, Companies and Intellectual Properties Commissioner (where legally required) and a relevant professional body, board or council (where applicable).
- An ongoing requirement to prove that the business is still viable and adhering to the conditions of its granting
- The ability to only set up a business in what is prescribed as a desirable business activity.
The Financially independent permit requires none of these and is therefore much less hassle initially to apply for and maintain once received.
So why would I apply for a Business Visa rather than Financially Independent Permanent Residence Permit?
There are two main reasons:
- As a Financially Independent permit is for permanent residency, it will in most cases take longer than a visa (temporary residency application). So if speed is important to you then a Financially Independent permit may not be appropriate. That said, other visa’s could well be obtained to cure this ‘speed’ issue.
- Costs – A business visa does work out cheaper than a Financially Independent permit, but this does need looking at in more detail.
So what’s the cost difference?
Generally you find, as is the case with Intergate, that are service fees are around half the price for a Financially Independent permit as opposed to a Business Visa. Simply because the permit is much easier to compile and submit. So in this case there is a fee saving.
It is the Department of Home Affairs fees where the extra costs come in to play. Application and submission fees remain the same but there is an additional fee payable. For the sake of ease of reference let us call this fee a success fee.
Once your Financially Independent permit has been granted, you will be required to pay a fee of R120,000 to the Department of Home Affairs.
Worth stressing is that this fee is not payable until the permit is granted so it is never at risk.
The net effect could see additional fees of R100,000 but a lot less hassle and the guarantee of permanent residency from day on of your immigration.
Conclusions of Business Visa versus Financially Independent Permit
No one likes paying more than they need to, however cost is also about time, reassurance and efficiency.
For many applicants, given the choice and with the knowledge that R100,000 is a small percentage of a total immigration and business set up cost they would rather go the Financially Independent Permit route than that of a Business Visa.
Getting more help with your options
Being aware of all your options and the repercussions of any choices you make is essential to making the right decision.
Take advantage of a free and non obligatory discussion with one of our Immigration Consultants.
Getting help with your visa or permit application
We welcome the opportunity to consult with you as to your eligibility for a visa /permit and answer any questions you may have with no obligation.
Alternatively you can fill out the below online enquiry form to contact us.