What international Investors must know before setting up a business in South Africa?
In South Africa, companies are registered by Companies and Intellectual Property Commission, an agency of the Department of Trade and Industry which register and keep records of all companies operating businesses in the Republic in terms of the Companies Act No 71 of 2008.
The Companies Act regulates the formation, conduct of affairs, and liquidation of all companies. The Act makes no distinction between locally owned or foreign-owned companies. Companies may be either private or public. South African companies are incorporated juristic persons that are also distinct legal entities.
Investors wishing to enter South African market or to establish a company in South Africa must consider number of important issues. Investors may consider one of the following options:
- Registering a new company
- Registering as a foreign company if the business is already established
outside the Republic. - Acquiring an existing company
For investors wishing to register a new company, a variety of business structures are available, each with their own regulatory and tax considerations. Investors may choose to register as a private company or personal liability company.
It is important for the investors to consider carefully business structures that best suit their needs. However, before registering a new company, investors from foreign countries must ensure that they have applied for work permits. Foreign nationals applying for work permit will be required to invest certain amount of money.
Foreign companies may wish to carry on business in South Africa as a foreign company. Before such companies can start trading, they must be domesticated in terms of the Companies Act.
Companies and Intellectual Property Commission (CIPC) outlines the criteria which define foreign companies and the rights foreign companies hold South Africa. As with South African companies, foreign companies must be registered with CIPC. CIPC is also responsible for the on-going regulation of foreign companies.
JMB Legal & Advisory assist both local and international investors to set up their companies in the South African market. Our legal consultants are experts in commercial law and effectively guide investors through the process of registering businesses in South Africa.
