Best way for a foreigner to open a business in South Africa

Best way for a foreigner to open a business in South Africa
Best way for a foreigner to open a business in South Africa

As a businesses person you are used to being presented all the options and associated facts on which to base your decisions. It’s not always the most obvious solution that is the best solution. Below we deal with the best way for a foreigner to open a business in South Africa.

Is there more than one choice?

Yes there is. All too often foreigners opening up a business in South Africa are presented with just one choice – the business visa. There is nothing wrong
with the business visa and it will suit a great many applicants, but not all.

Whats the other choice?

One of the best ways for a foreigner to open a business in South Africa is the Independent Financial permit.

It cuts through much of the red tape and bureaucracy associated with a business visa application as well as negating the need for the ongoing reporting
that the DHA requires from a business visa or permit holder.

It also eliminates risk

When you make an application for a business visa it is associated to one particular business. Either a new one or existing one. The flexibility to look at
other businesses to run is therefore taken away, and should your business fail your residency status in South Africa is also now at risk.

The independent financial persons permit allows as few or as many businesses as the holder requires. It also allows the holder to take up employment, or
simply take their time to explore opportunities, waiting for the right one.

Then surely an independent financial permit is the best way for a foreigner to open a business in South Africa

It has its drawbacks, such a processing times and a much larger Department of Home Affairs fee. It also requires the individual so have a greater net
wealth (though this does not need to be invested in a business nor even brought into South Africa).

Its essential to get advice as to which is the right route for you. The best way to open a business as a foreigner in South Africa can only be decided when
a proper consultation has taken place.

The below table gives you the facts for the best way for a foreigner to open a business in South Africa.

Criteria

Business Visa

Independent Financial Permit

Minimum investment

ZAR 5 million

None

Required net wealth applicant

Nil but needs to invest ZAR 5 million into business

ZAR 12 million

Number of businesses can set up

1

As per holders choice no minimum or maximum

Employee obligations

60% South Africans

No obligations

Business plans

Must be submitted with application

Not required

Business structure

Must be submitted with application

Not required

Ongoing requirements

Proof submitted to Department at various intervals

Not required

Temporary residency

Yes via a business visa

Not an adoption under the permit

Permanent residency

Can be applied for on receipt of a business visa

Application is for permanent residency

Repercussions of business failure

Could result in visa or permit being at risk as we’ll as status in South Africa

None other than holders own financial loss

Processing times

For temporary residency up to 6 months DHA permitting. For permanent currently approx 12 to 24 months.

Approx 9 months

Fees

Normal DHA fee

Additional ZAR 120,000 success fee payable to DHA

Finding out more

To learn more about business visa’s you can see here, and for financially independent here.

Like many of us, you may however, prefer to speak to a human being!

To contact our experts please use the form below:

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