South African industrial development zone (IDZ) in 2023
Since 2003, Healy Consultants Group PLC assists our Clients with registration of their businesses in the South African Industrial Development Zones (IDZs) in order to benefit from the simplified customs compliance procedures when importing and exporting and to take advantage of the reduced taxes and other incentives;
The main South African IDZs
- Coega IDZ
- Inaugurated in 2001, Coega IDZ is the first and oldest industrial development zone in South Africa. It is strategically located in the South African Eastern Cape Province on the east-west trade routes to serve both the global and African markets;
- The IDZ’s main activity is manufacturing for export purposes and attract investments in i) the automotive industry, ii) processing of agricultural products, iii) metal logistics and energy, iv) business process services and v) aquaculture sectors.
- Richards Bay IDZ
- Linked to the Richards Bay international sea port, this IDZ is designed mainly for manufacturing and storage of minerals and mineral products. The seaport connects to the neighboring Mozambique up the larger east African region;
- The IDZ has world-class industrial infrastructure and a superb network of shipment routes suitable for global business and export oriented manufacturing investments.
- Dube TradePort
- Dube TradePort is the only industrial trade zone in African that incorporates an international airport with a cargo and warehousing facilities, a retail sector and offices, an agricultural section and hotels in one facility;
- The trade port contains two major development zones namely i) Dube AgriZone, specializing in agricultural and horticulture products and ii) Dube TradePort, focusing on manufacture of fashion garments, automotive and electronics.
Benefits of operating within an IDZ
- Our Clients will enjoy Government incentives including:
- A reduced corporate income tax at the rate of 15%;
- Relief from customs duties on goods imported into the IDZs for storage or materials for manufacture;
- Up to 30% grants on cost of plant, machinery, equipment, commercial buildings and vehicles;
- Exemption from VAT on water and electricity usage;
- Tax incentives on exported goods.
- Other advantages of registering your company in a South African IDZ include:
- Eligibility for exemption from employment taxes;
- Simplified customs procedures including registration and licensing and clearance of import/exported goods;
- Exemption from VAT on importation of machinery for manufacturing;
- Eligibility for Government grants and allowances of up to US$2.2million for approved projects;
- Access to world-class infrastructure and the best sea and airports in Africa suitable for international trade.
|IDZ comparison||Richards Bay||East London||Port Elizabeth||Saldanha Bay||Dube TradePort|
|IDZs used mostly by which industry?||Manufacturing||Manufacturing||Manufacturing||Manufacturing||Manufacturing & Logistics|
|Average annual Industrial space rent per 1000 sq. m.||US$35,000||US$25,000||US$30,000||US$30,000||US$60,000|
|How long to set the company up?||2 months||2 months||2 months||2 months||2 months|
|How long to open company bank account?||3 weeks||3 weeks||3 weeks||3 weeks||3 weeks|
|Quality of utilities||Good||Satisfactory||Satisfactory||Satisfactory||Excellent|
|Corporate bank account||First National Bank||Standard Bank||HSBC||Citibank||ABSA|
|Accounting and tax|
|Corporate tax payable in South Africa||15%||15%||15%||15%||15%|
|Tax registration certificate required||Yes||Yes||Yes||Yes||Yes|
|Annual audited financial statements||Yes||Yes||Yes||Yes||Yes|
|Minimum number of directors||1||1||1||1||1|
|Minimum number of shareholders||1||1||1||1||1|
|Individual shareholders allowed||Yes||Yes||Yes||Yes||Yes|
|Corporate shareholders allowed||Yes||Yes||Yes||Yes||Yes|
|Corporate director(s) allowed||No||No||No||No||No|
|Public register of shareholders and directors||Yes||Yes||Yes||Yes||Yes|
|LLC company allowed?||Yes||Yes||Yes||Yes||Yes|
|Can be wholly foreign owned||Yes||Yes||Yes||Yes||Yes|
|Allowed to sign sales contracts with South African Clients?||Yes||Yes||Yes||Yes||Yes|
|Allowed to invoice South African Clients?||Yes||Yes||Yes||Yes||Yes|
|Physical office space required||Yes||Yes||Yes||Yes||Yes|
|Allowed to import raw materials?||Yes||Yes||Yes||Yes||Yes|
|Allowed to export goods?||Yes||Yes||Yes||Yes||Yes|
|Can the entity hire expatriate staff in South Africa?||Yes||Yes||Yes||Yes||Yes|
Frequently asked questions
How to register a company in South African IDZ.
Does South Africa have a one stop facility for incorporating IDZ companies?Currently, the Department of Trade and Industry is working on creating a one stop shop facility which will assist Clients with project planning, licensing requirements, financial assistance and assistance with provision of basic utilities.