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  • South A frica: Investor’s H

    andbook 2014/15

    South Africa: Investor’s Handbook 2014/15

  • Foreword and Author’s contact details

    Contents Value proposition

    Fast facts about South Africa

    General information about South Africa

    South Africa: An economic overview

    Foreign trade Regulatory requirements in South Africa

    South African taxation

    Incentives and industrial financing

    Contacts in South Africa

    Acronyms and abbreviations

    Addendums: Indicative costs and other practical aspects vof doing business and living in South Africa

    Foreword

    It is with great pride that the Department of Trade and Industry (the dti) and Deloitte bring you this updated edition of South Africa: Investor’s Handbook.

    South Africa has a number of characteristics that make it a compelling investment destination on the African continent. The Handbook provides investors with a broad overview of the social, regulatory and economic environment in which they can expect to operate, highlighting the key features and investment incentives that we believe make doing business in South Africa an attractive proposition.

    It is hoped that this publication will serve as the single most comprehensive and authoritative source of information for investors, exporters and businesses arriving at our shores. Please contact us for further information and advisory support.

    The Department of Trade and Industry (the dti):

    Private Bag X84 Pretoria 0001

    National: 0861 843 384

    International: +27 12 394 9500

    E-mail: investmentsa@thedti.gov.za

    www.thedti.gov.za

    Deloitte South Africa:

    Private Bag X6, Gallo Manor, Johannesburg 2052

    Tel: +27 11 806 5000

    Fax: +27 11 806 5003

    E-mail: morwilson@deloitte.co.za / zataxpub@deloitte.co.za

    www.deloitte.com/za

  • Foreword and Author’s contact details

    Contents Value proposition

    Fast facts about South Africa

    General information about South Africa

    South Africa: An economic overview

    Foreign trade Regulatory requirements in South Africa

    South African taxation

    Incentives and industrial financing

    Contacts in South Africa

    Acronyms and abbreviations

    Addendums: Indicative costs and other practical aspects vof doing business and living in South Africa

    Contents

    1. Value proposition 1 1.1. Why invest in South Africa? 1

    2. Fast facts about South Africa 2 2.1. Political 2 2.2. Economic 3 2.3. Business 4 2.4. Tourism 4 2.5. Sport 5 2.6. Education 5 2.7. Environmental 6 2.8. Social and infrastructure 6 2.9. Miscellaneous 7

    3. General information about South Africa 10 3.1. Introduction 10 3.2. Infrastructure 13 3.3. Art, culture and sport 16 3.4. Food and drink 18 3.5. Education 18 3.6. Law 19 3.7. Industrial relations 20 3.8. Immigration - Visas and permits 21 3.9. Immigration - Other practical aspects 28 3.10. Stock exchange 34 3.11. Key economic data 35 3.12. Overview of the Department of Trade and Industry (the dti) 36

    4. South Africa: An economic overview 39 4.1. Key drivers of the South African economy 39

    5. Foreign trade 54 5.1. South Africa’s trade agreements 54 5.2. Exchange controls 61 5.3. Importing and exporting 67

    6. Regulatory requirements in South Africa 80 6.1. Corporate regulations 80 6.2. Banking 91 6.3. Money laundering 96 6.4. Labour regulations 97 6.5. Industrial procurement 106 6.6. Broad-Based Black Economic Empowerment (B-BBEE) 107 6.7. Intellectual property 116 6.8. Consumer protection law 123 6.9. Competition law 127 6.10. Environmental law 128 6.11. Climate change policy and regulations 135 6.12. Information, communication and technology law 137 6.13. Land regulations 138

    Disclaimer

    Unless otherwise stated, the information in this Handbook is based on conditions that existed in December 2014. The authors accept no responsibility for any errors this guide may contain, whether caused by negligence or otherwise, or for any loss, however caused, sustained by any person that relies on the information herein. While all attempts have been made to provide up-to-date statistics and other details, this Handbook is not exhaustive and readers are advised to consult with their advisors and/or the relevant government agency.

  • 1

    Foreword and Author’s contact details

    Contents Value proposition

    Fast facts about South Africa

    General information about South Africa

    South Africa: An economic overview

    Foreign trade Regulatory requirements in South Africa

    South African taxation

    Incentives and industrial financing

    Contacts in South Africa

    Acronyms and abbreviations

    Addendums: Indicative costs and other practical aspects vof doing business and living in South Africa

    7. South African taxation 143 7.1. Corporate taxation 143 7.2. Transaction taxes 163 7.3. Personal taxation - Individuals 168 7.4. Employment tax 179

    8. Incentives and industrial financing 185 8.1. Overview 185 8.2. Investment and enterprise development incentives 186 8.3. Competitive enhancement incentives 193 8.4. Export incentives - Non-industry specific 196 8.5. Export incentives - Industry specific 200 8.6. Industrial financing 203 8.7. Industrial participation 212 8.8. Social responsibility 213 8.9. Tax incentives 214

    9. Contacts in South Africa 226 9.1. Business information services 226 9.2. Banking 228 9.3. Chambers of commerce and industry 232 9.4. Investment promotion agencies 233 9.5. Government departments 235

    10. Acronyms and abbreviations 238

    11. Addendums: Indicative costs and other practical aspects of doing business and living in South Africa 249

    11.1. Addendum 1: Telecommunication costs 249 11.2. Addendum 2: Fuel costs 253 11.3. Addendum 3: Water tariffs 255 11.4. Addendum 4: Cost of living comparison 255 11.5. Addendum 5: Education costs 258 11.6. Addendum 6: Cost of office space and industrial land 264 11.7. Addendum 7: Ease of Doing Business (DB) in South Africa 269 11.8. Addendum 8: National remuneration data 272 11.9. Addendum 9: Transportation costs for goods 275 11.10. Addendum 10: Cost of electricity in major centres 283 11.11. Addendum 11: Immigration – Permits and visas 296 11.12. Addendum 12: Customs and excise regulations – Guidelines for immigrants and travellers 302 11.13. Addendum 13: How to apply for an energy connection 307 11.14. Addendum 14: How to apply for a water connection 309 11.15. Addendum 15: How to apply for an environmental impact assessment (EIA) 310 11.16. Addendum 16: How to obtain a mining permit/right 316

    1. Value proposition

    1.1. Why invest in South Africa?

    South Africa is one of the most sophisticated, diverse and promising emerging markets globally. Strategically located at the tip of the African continent, South Africa is a key investment location, both for the market opportunities that lie within its borders and as a gateway to the rest of the continent, a market of approximately one billion people.

    South Africa is the economic powerhouse of Africa and forms part of the BRICS group of countries with Brazil, Russia, India and China. It has a favourable demographic profile and its rapidly expanding middle class has growing spending power.

    South Africa has a wealth of natural resources (including coal, platinum, gold, iron ore, manganese nickel, uranium and chromium) and it has been enjoying increased attention from international exploration companies, particularly in the oil and gas sector. In agriculture and agro-processing, South Africa is recognised as a leader in the region.

    It has world-class infrastructure, exciting innovation, research and development capabilities and an established manufacturing base. South Africa has a strong tertiary education sector that ensures the availability of highly skilled graduates, and it is at the forefront of the development and rollout of new green technologies and industries, creating new and sustainable jobs in the process and reducing environmental impact.

    South Africa has sophisticated financial, legal and telecommunications sectors, and a number of global business process outsourcing (BPO) operations are located in the country.

    It has political and macroeconomic stability, an abundant supply of semi-skilled and unskilled labour, and compares favourably to other emerging markets in terms of the overall cost of doing business. For both professional and manufacturing jobs, labour costs have also historically been very competitive and less costly than that of European countries.

    The South African Government has introduced wide-ranging legislation to promote training and skills development and fast-track the building of world-class skills and competences.

    One of the main reasons for South Africa becoming one of the most popular trade and investment destinations in the world is due to the country ensuring that it can meet the specific trade and investment requirements of prospective investors.

    South Africa has a host of investment incentives and industrial financing interventions that are aimed at encouraging commercial activity and its trade rules favour a further expansion in South Africa’s burgeoning levels of international trade.

    The special International Headquarter Company (IHQ) regime makes South Africa an attractive location for multinational companies wanting to invest into Africa.