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, or invest into a South African business. 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 Visa.
When applying for the Business Visa, you need to meet the following requirements:
You need to provide proof of one of the following:
• ZAR5,000,000 (5 million South African Rands) in cash, or
• a capital investment of ZAR 5,000,000 in the business.
The regulations set out in May 2014 and then July 2014 also state that your business, your business plan or the business you wish to invest in must include a staff compliment of at least 60% South Africans. Therefore, for example, if you plan to buy a guesthouse and have 5 staff members, you must have at least 3 South Africans in this staff compliment. Similarly, should you wish to invest in a company as a foreigner, and wish to immigrate to South Africa under a business visa, first check that the company is adhering to this rule.
Bear in mind that, while not always advised, a small way around this requirement for certain situations is that these South African staff members can be simply employed a few hours a week in a menial position.
In addition to South African staff requirements, the business must register or undertake to register with the South African Revenue Service, the Unemployment Insurance Fund, the Compensation Fund for the Occupational Injuries and Diseases, the CIPC (Companies and Intellectual Properties Commission), SAQA (South African Qualifications Authority) and the DTI (Department of Trade and Industry). ImmigrationSouthAfrica.org handles all of this if you utilise our services.
The figures provided above for the minimum investment in the business required by the South African government are not always applicable. There are circumstances under which the minimum investment may be smaller, as many businesses do not require a capital investment as large as ZAR5,000,000. 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 numerous and listed in the document available for download below:
Industries and types of business that are declared undesirable for South Africa are also listed:
(a) Businesses that import second-hand motor vehicles into the Republic of South Africa for the purpose of exporting to other markets outside the Republic of South Africa
(b) The exotic entertainment industry
(c) Security Industry
When applying for this visa, 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 Visa 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 Visa, you must provide an undertaking that you are going to register with SARS, for purposes of taxation.
Specifics of the Business Visa
Usually, the Business Visa 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 visa 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 Visa. 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 Visa, and then once again after a period of three years.
The most important factor when applying for Permanent Residence based on the Business Visa is that your capital investment in your business should not be withdrawn. If you withdraw your capital from your business at certain points in time, your application for Temporary or Permanent Residence could be rejected.