South Africa - International Franchise Association

Branch profits remitted to a foreign firm's headquarters are not subject to withholding tax.
The legal liabilities of a branch are not limited to only its South African assets.
There are three forms of business enterprises in South Africa: Private Companies (Pty),
Public Companies (Ltd), and Close Corporations (CC). South Africa has an estimated
400,000 Private Companies and 4000 Public Companies, and 1.6 million Close
Corporations.
Each form has its own setup and reporting requirements as detailed below:
Private Companies:
A locally registered private company, identified by the words "Proprietary Limited"
(Pty) in its title, is a form commonly used to carry on operations as a subsidiary of
a foreign company. Private companies may have up to 50 shareholders, but
cannot offer shares to the public or transfer them and are not required to have a
minimum capital subscription.
Private Directors need not lodge a written consent with the Registrar and they
need not be South African nationals or residents of South Africa. The registration
of a company is established by filing the following information with the Registrar
of Companies:
• a certified copy of the Memorandum and Articles of Association;
• the registered address;
• the name and address of the company's local auditor; and a share capital
duty receipt.
Private companies are not subject to the statutory meeting and reports
requirements of public companies and do not have to lodge their annual financial
statements with the Registrar.
Public Companies:
Public companies, designated by the word “Limited” or letters "Ltd" in the title,
are formed to raise funds by offering shares to the public. Therefore, there is no
limit on the number of shareholders in a public company. Public companies are
required to file annual financial statements and reports with the Registrar of
Companies.
For public companies that issue a prospectus, proof must be submitted to the
Registrar that each director has paid full price for the shares and the number of
shares issued equals the stated minimum subscription. For public companies
with share capital, the following must be forwarded to the Registrar:
• a director's statement that capital is adequate for business operation;
• particulars of the directors and officers; and
• proof that the annual duty has been paid.
A public company may not commence operations prior to receipt of the
Registrar's certification.