5 things you need to know about starting a business in South Africa as a foreign company
1. Do you need a business visa?
There is a common misconception that individuals or companies that are starting a business in South Africa always require a business visa to be applied for.
- If you are seeking to establish a business which you own in full or in part and which you intend to work in whilst living in South Africa, you will need to apply for a business visa and meet the South African business visa requirements.
- Where the business is being set up as part of a wider group a business visa would not be required. See here for details on setting up a branch or external company in South Africa. For example an international company that is starting a business in South Africa as a branch or subsidiary of their wider operations.
- Where an individual or company is investing into a business that is being started in South Africa but is not going to be working in the business, a business permit is not required nor is it required for a branch or external company in many cases.
2. How do you go about starting a business in South Africa as a foreign company?
Aside from any business visa requirements, the first step in setting up a business in South Africa as a foreign company is to decide on a company structure. This is of particular importance for foreign owners of businesses as it carries with it tax implications and foreign exchange control implications.
We are able to offer consultations and recommendations from our international tax lawyer to guide you through the selection and registration process.
3. Sending over international staff
It is very common for foreign companies starting a business in South Africa to have a requirement to relocate some of their existing staff to South Africa, especially in the set up and early stages. Staff relocated will require a work visa of some description and there are various options for securing these.
Intergate Immigration has a dedicated corporate department that advises international businesses on the most appropriate work visa routes for the employees they are relocating to South Africa.
4. Can foreign owned businesses repatriate profit abroad?
Of course there is little point setting up a business in South Africa if the profit cannot be repatriated abroad. The simple answer is yes you can but the ease of doing so is greatly affected by the structure you choose in the first place. It is of paramount importance that you seek expert help at an early stage before decisions are made.
5. Setting up a business that is a service or outsourcing centre
In many cases, due to language, labour costs and time zones the businesses that Intergate help with setting up business in South Africa are not income generating but are an outsourced function for their international parent. The most obvious example of this is call centres but we have also assisted with Marketing, IT and administrative centres, to name but a few.
There is no requirement for the business (branch or subsidiary) to create profit and the setting up of the business can purely be on an ‘outsourced function’ basis.
Intergate can assist you with payroll functions, company structures and the inflow of funds to pay payroll and other expenses.