South Africa company formation is a legitimate way for international business people to conduct business in Southa Africa, within the region and internationally. Two popular options for South Africa company incorporation are the Limited Liability Company (PTY) and the South Africa Close Corporation. The following information will help to determine whether South Africa company formation is the optimum corporate structure to fulfill your international business objectives:
A South Africa close corporation is appealing for small businesses because it is faster and an easy way to register a company in South Africa, allowing quicker commencement and setting up of a business in South Africa. It is not required to register Articles of Association, and is comprised of members rather than shareholders or directors. Furthermore, the financial statements of a South Africa close corporation do not undergo an annual audit, making it an attractive option for South Africa company registration, as well as for entrepreneurs in South Africa.
South Africa company formation is cost-effective because of low government registration fees for applying for a business license in South Africa and the absence of a minimum capital requirement. For more information about the process and requirements for South Africa business registration, and more on how to set up a buisiness in South Africa, see our South Africa Company Set Up page.
South Africa company registration under 100% foreign ownership is permitted. A minimum of one shareholder and one director is required to be able to register a company in South Africa, and they may be the same person. The shareholder and director need not be resident in South Africa. In comparison, a public company must have at least seven shareholders (unless it is a wholly-owned subsidiary of another company) and two directors before being permitted to proceed with South Africa company incorporation. The minimum number of members of a South Africa close corporation is one, while the maximum number of members is ten.
South Africa has a Free Trade Agreement with the European Union (EU) which provides 95% of South Africa's exports with duty-free access to the EU in the industrial goods and agriculture sectors. This can benefit businesses which decide to pursue South Africa company incorporation.
A business in South Africa has access to double taxation agreements South Africa has signed with major trading nations, including Canada, France, Germany, India, Singapore, the UK and the US. For more information, refer to our Tax Planning in South Africa page.
After South Africa company formation, Healy Consultants can open a corporate bank account with one of the world's leading retail banks, including HSBC, Standard Chartered and Citibank to support operations of the business in South Africa. For a wider overview of our services and capabilities, visit our Other services to support South Africa incorporation page.
Company formation in South Africa can be a time consuming process, taking up to 3 months to complete.
South Africa suffers from a poor international perception, reflected in its 69th place ranking in the 2012 Corruption Perceptions Index by Transparency International, a global measure of corruption amongst public officials and politicians. Moreover, South Africa is negatively ranked as the world's 74th freest economy in the Heritage Organisation's 2013 Index of Economic Freedom a measure of freedom enjoyed in business, trade, monetary, financial, investment and labour markets. This means that compared to more developed economies, it may be more difficult to do business in South Africa.
Those who wish to register a company in South Africa must take note that a South African company is liable to a corporate tax on profits of 28% for income above R300,000 ($43,400) and an additional 10% Secondary Tax on Companies (STC) on net dividends. Also, the Value Added Tax (VAT) rate on most supplies and imports is 14%, although certain goods are exempt from this rate.
A South African limited liability company is required to submit audited annual financial statements to the government.
After company registration in South Africa, details of shareholders and directors can be obtained from the office of the registrar.
According to the World Bank's Doing Business 2012 Survey, South Africa is the world's 39th easiest place to do business. The survey measures factors including business start up procedures, time, cost and minimum capital required to start a business. It is also the world's 52nd most competitive economy, according to the World Economic Forum's Global Competitiveness Report 2012-2013.
Your joint venture partner or South Africa shareholder must not merely be a nominee for the sake of meeting the rules of foreign company incorporation and South Africa company registration. You should choose a partner that actually brings a lot to the table, including local knowledge which would help doing business in South Africa.
To optimize the success of your new business registration in South Africa, Healy Consultants recommends your Firm i) complete a feasibility study regarding South Africa company incorporation ii) prepare a detailed business plan for setting up a business in South Africa iii) communicate with the South Africa Chamber of Commerce iv) speak to your local embassy in South Africa and v) communicate with Healy Consultants Clients who successfully launched their business in South Africa.
Foreign companies should be aware i) South Africa statistics and market data are usually imprecise ii) transactions tend to take longer than expected iii) more frequent and longer market visits are required, at least initially iv) complex business procedures are common.
An essential factor in starting a business in South Africa is to thoroughly research the business sector you are planning to invest in. Following South Africa company registration, Healy Consultants recommends our Client prepare a detailed plan for doing business in South Africa,including an extensive market study and evaluation of competitors.
After completeing the process for South Africa Company Registration, banks will provide finance to a South African registered company if the following conditions are met i) good Business-plan and feasibility study ii) availability of security iii) business owners have suitable experience iii) last 3 years audited financial statements iv) project strength and weaknesses analysis (SWOT).
Following South Africa Company Registration, Healy Consultants recommends international banks HSBC, Standard Chartered and Citibank for most corporate bank account solutions, due to the best internet banking and customer service. Local banks can be used where appropriate for the business in South Africa.
South African bank accounts offer a high level of corporate bank account facilities. These include multiple currencies, internet banking, telephone banking, checking accounts, savings accounts, debit and credit cards, fixed term deposits and wealth management services.
To support their business in South Africa following South Africa business registration, Healy Consultants assist clients with Trade finance tasks including i) bank guarantees ii) letters of credit iii) finance against trust receipt iv) document against payment and against acceptance.
Securing corporate finance in the form of a loan, overdraft or simply preferential credit terms are other services provided to support clients company registration in South Africa.
South Africa shareholders and agents
Healy Consultants provides our Clients with i) nominee South Africa shareholders and directors and ii) professional agents and distributors. Detailed due diligence is available for each South African national.
South Africa office premises
Before the Government approves company registration, our Client must sign an office premises lease agreement. Following South Africa business registration, some of our Clients require Healy Consultants virtual office for six months until a full time business office in South Africa is found.
Alternatively, Healy Consultants will assist our Client find office premises and or warehouse space.
Healy Consultants assists our Clients secure a family home for the foreign entrepreneur and his expatriate staff. With a network of agents and property owners all over South Africa, allow us to project manage your family migration.
Trademark and copyright protection
Entrepreneurs setting up a business in South Africa will benefit from the country’s numerous Intellectual Property laws. Healy Consultants will assist our Clients with trademark and patent registration with the Companies and Intellectual Property Commission (CIPC -- formlery CIPRO South Africa). Brand, design, and trademark registration in South Africa is particularly important.
Company secretary services
Following South Africa company incorporation, Healy Consultants assist our Clients with i) share transfers, ii) Afrikaans/ English legal translation services, iii) annual license renewals with the South African company registrar and DTI (department of trade and Industry), iv) import and export documentation, v) W.L.L. License - increasing Capital / withdrawal of Partners / Adding Partners.
Market research
Aside from South Africa Company incorporation, Healy Consultants offers a comprehensive range of South Africa research services including i) industrial or business analysis ii) economic and political overview iii) competitor analysis iv) customer analysis v) regulation analysis vi) market entry strategies vii) business partner matching viii) SWOT analysis ix) financial projections x) location and site evaluation xi) business life cycle analysis.
A feasibility study helps our Client determine if they should proceed with South Africa company formation and sell their products and services in South Africa. The feasibility study covers i) business alternatives ii) new opportunities iii) reasons not to proceed iv) what could go wrong. Advantages of a feasibility study include:
Enhancing the probability of business venture success by identifying business risk early.
Provides quality information for decision making.
Provides documentation that the business venture was thoroughly investigated before South Africa company incorporation.
Helps secure funding from lending institutions and other sources.
If our Clients are satisfied with the outcome of the feasibility study, Healy Consultants will prepare a detailed business plan for South Africa company formation. A business plan provides a “roadmap” of how the business will be created and developed. The business plan provides the “blueprint” for implementation of South Africa company formation.
FEES SCHEDULE
Year 1 incorporation
US$3,580 *
Annual fees from Year 2
US$2,280 *
Nominee shareholder / director fee
US$1,800 **
Company de-registration
US$2,450
* Includes government licence fees, Ministry of Finance approval and legal registered office for 12 months.
** Excludes US$1,100 refundable deposit.
FEES SCHEDULE