Business permit

Business Permit

South Africa is a country with an often-stated need for foreign investment. Therefore, there is a section of South African immigration legislation that deals specifically with foreign individuals wishing to conduct business in the country. If you are trying to establish your own business in South Africa, take over an existing South African business, or make an investment in a South African business, you need to apply for the Business Permit.

When applying for the Business Permit, you need to meet the following requirements:

Minimum investment

You need to provide proof of one of the following:
• ZAR2,500,000 (2,5 million South African Rands) in cash, or
• a capital investment of ZAR 2 500 000 in the business, or
• ZAR2,000,000 in cash as well as a capital investment of ZAR500,000.

Getting the necessary documentation shouldn't be a hindrance to doing business in South Africa

The figures provided above are the minimum investment in the business required by the South African government. However, there are circumstances under which the minimum investment may be smaller, as many businesses do not require a capital investment as large as ZAR2,500,000. In such cases, you are allowed to make a smaller investment, and you need to apply to the Department of Trade and Industry for a letter of recommendation stating that the Department of Home Affairs should waive the minimum investment requirement. You stand a very good chance of succeeding in your application if your business falls within an industry that has been identified as being in the national interest. These industries are:

• Crafts
• Tourism
• Chemical works and biotechnology
• Agricultural processing
• Clothing and textiles
• Information and communication technology
• Metal and mineral processing
• Automotive works and transport operations

Business plan

When applying for the permit, you are required to submit a detailed business plan, outlining all relevant aspects of your business, such as the nature of your business, who your suppliers and customers are, and how you intend to market your business.

Employment of South African residents

A further requirement of the Business Permit is that your business must employ at least five South African citizens or permanent residents. If your business has not started operating yet, you must give an undertaking that you are going to employ five such individuals.

The South African Revenue Service (SARS)

In order to qualify for the Business Permit, you must provide an undertaking that you are going to register with SARS, for purposes of taxation.

Specifics of the Business Permit

Usually, the Business Permit is valid for a period of 24 months. This period may be shorter or longer, depending on the nature of your business, so it is very important to provide clear information in your business plan.

It is possible to extend the permit every 24 months for a further 24 months. Every time that you apply for an extension, you are required to submit proof that you are still meeting the requirements given above.

It is also possible to apply for Permanent Residence once you have obtained the Business Permit. If you wish to do so, you need to provide proof that you have met the requirements given above on two occasions: first within two years of the issue of your Permit, and then once again after a period of three years.

The most important factor when applying for Permanent Residence based on the Business Permit is that your capital investment in your business should not be withdrawn. If you withdraw your capital from your business, your application for Permanent Residence could be rejected.