Free State Business 2020 edition

OVERVIEW
Establishing
a business in South Africa
South Africa has eased the barriers to doing business for
locals as well as international companies and individuals.
South Africa has a sophisticated legal, regulatory
and banking system. Setting up a business
in South Africa is a relatively straight-forward
process with assistance being offered by organisations
such as the Department of Trade, Industry
and Competition and provincial investment agencies
like the Free State Development Corporation (FDC).
South African law regulates the establishment and
conduct of businesses throughout the country. Tax,
investment incentives, regulations governing imports,
exports and visas are uniform throughout the country.
The particular environment varies from province
to province with regard to the availability of human
and natural resources, the infrastructure and support
services, business opportunities and the quality of life.
In this respect, the FDC can offer specific advice
about the business environment in the province.
Business is regulated by the Companies Act and
the Close Corporation Act, which cover accounting
and reporting requirements. Under new legislation,
no new Close Corporations can be created but CCs
can convert to companies.
Registration of company
The company must be registered with the
Comp anies and Intellectual Properties Commission,
(CPIC) in Pretoria within 21 days of the company being
started. There are a range of administrative procedures
that need to be fulfilled.
Bank account
A business bank account must be opened in the
company’s name with a bank in South Africa.
Registration with the receiver of revenue
• As a Provisional Taxpayer
• As a VAT vendor
• For Pay As You Earn (PAYE) income tax payable
on money earned by employees
• For Standard Income Tax on Employees
Registration with the Department of Labour
Businesses employing staff will have to contact the
Department of Labour regarding mandatory contributions
to the Unemployment Insurance Fund (UIF).
Register with Compensation Commissioner for
Compensation Fund: Files with the Compensation
Fund (in the Department of Labour) for accident
insurance (Workmen’s Compensation).
Registration with the local authority
Relevant only to businesses dealing in fresh foodstuffs
or health matters.
Other procedures
• Checking exchange control procedures (note
that non-residents are generally not subject to
exchange controls except for certain categories
of investment)
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