BUSINESS IN SOUTH AFRICA

• “UNITY IN DIVERSITY"
GDP OF
SOUTH
AFRICA
 TYPES OF
COMPANIES IN
SOUTH AFRICA
CHOICE OF BUSINESS ENTITY

NON-PROFIT COMPANIES PROFIT COMPANIES

 NON-PROFIT COMPANIES

• A COMPANY SET UP FOR PUBLIC BENEFIT, OR FOR A PURPOSE RELATING TO CULTURAL OR SOCIAL
ACTIVITIES, OR COMMUNAL OR GROUP INTERESTS, SUCH AS RELIGION, SCIENCES, EDUCATION, ARTS,
CHARITY OR RECREATION. 
SA Y DO – S O U TH
AFRICAN YOUTH
DEVELOPMENT
ORGANIZATION
PROFIT COMPANIES

Public (name ends in
Personal Liability
“Ltd”) or private (“Pty Partnership
Company (“Inc”)
Ltd”) company

External
Business trust Sole proprietorship company (branch of
a foreign company
 PRIVATE COMPANIES

Most foreign investors set up as a private company, as they require the least amount of
annual formalities.

They must have at least one director and shareholder and membership is restricted to
50. The directors do not need not be South African residents or nationals.
 THIS IS PRIVATE
COMPANY IN SOUTH
AFRICA WHICH FOLLOWS
THE GROWTH OF SOUTH
AFRICAN MUSIC.
SA TAXI
•S ATAXI FINANCES ENTREPRENEURS
WHO OPERATE MINIBUS TAXIS THAT
MAY NOT OTHERWISE HAVE ACCESS TO
CREDIT FROM TRADITIONAL BANKS,
CONTRIBUTING TO JOB CREATION, AND
ENABLING AND IMPROVING THE SAFETY
OF PUBLIC TRANSPORT IN SOUTH
AFRICA. 
PUBLIC • PUBLIC COMPANIES ARE FORMED TO RAISE FUNDS BY
COMPANIES
OFFERING SHARES TO THE PUBLIC AND THERE IS NO LIMIT
TO THE NUMBER OF SHAREHOLDERS.
PARTNERSHIP • A PARTNERSHIP IS A FORMAL ARRANGEMENT BY TWO OR
MORE PARTIES TO MANAGE AND OPERATE A BUSINESS
AND SHARE ITS PROFITS
 • A TRUST COMPANY IS A LEGAL ENTITY THAT ACTS AS
BUSINESS A FIDUCIARY, AGENT, OR TRUSTEE ON BEHALF OF A

TRUST
PERSON OR BUSINESS FOR THE PURPOSE OF
ADMINISTRATION, MANAGEMENT, AND THE EVENTUAL
TRANSFER OF ASSETS TO A BENEFICIAL PARTY
SOLE •  A BUSINESS THAT LEGALLY HAS NO SEPARATE EXISTENCE
FROM ITS OWNER. INCOME AND LOSSES ARE TAXED ON
PROPRIETORSHIP THE INDIVIDUAL'S PERSONAL INCOME TAX RETURN.
EXTERNAL • FOREIGN COMPANIES THAT DO BUSINESS OR CARRY OUT
COMPANIES
NON-PROFIT ACTIVITIES IN SOUTH AFRICA ARE KNOWN
AS EXTERNAL COMPANIES.
DOMESTIC CORPORATIONS AND
DOMESTICATED COMPANIES

•A “DOMESTICATED COMPANY’ IS
DEFINED AS A FOREIGN COMPANY
WHOSE REGISTRATION HAS BEEN
TRANSFERRED TO SOUTH AFRICA
AND WHICH WILL THEREAFTER
EXIST AS A COMPANY IN TERMS OF
THE COMPANIES ACT AS IF IT HAD
BEEN ORIGINALLY SO
INCORPORATED AND REGISTERED
STANDARD BANK GROUP

STANDARD BANK GROUP IS A FINANCIAL INSTITUTION THAT

OFFERS BANKING AND FINANCIAL SERVICES TO INDIVIDUALS,
BUSINESSES, INSTITUTIONS AND CORPORATIONS IN AFRICA AND
ABROAD. THIS IS THE BIGGEST COMPANY IN SOUTH AFRICA
 BUSINESS
ENVIRONMENT
HOW DO YOU REGISTER A COMPANY IN SOUTH AFRICA?
Method 1: The second method means doing everything
100% by yourself through CIPC

Method 2: Use a Professional Service

DOCUMENTATION
• IDENTIFICATION DOCUMENTS (ID) OR PASSPORTS OF THE
INCORPORATORS AND THE DIRECTORS

• IDENTIFICATION COPY OF THE APPLICANT IF NONE OF THE

DIRECTORS IS MAKING THE REGISTRATION APPLICATION.

• POWER OF ATTORNEY TO SIGN ALL THE RELATED DOCUMENTS ON

BEHALF OF THE INCORPORATOR IF HE/SHE IS A JURISTIC PERSON

• CERTIFIED ID COPY TO IDENTIFY THE POWER OF AN ATTORNEY FOR

THE PREVIOUS ACTION

• VALID NAME RESERVATION IN CASE OF A PRIOR FILING OF

INCORPORATION
 RESERVING A COMPANY NAME

• Carry out a name search with the CIPC

• Once approved, it is valid for six months

Another way to check if another company uses your Preferred Company Name online or on social media - visit www.google.co.za
REGISTERING WITH THE SOUTH
AFRICAN REVENUE SERVICES (SARS)
• YOU MUST REGISTER AS A TAXPAYER WITH SARS IF YOU EARN MORE
THAN A SPECIFIC AMOUNT, WHICH IS DETERMINED EVERY YEAR.

• YOU MUST REGISTER WITHIN 60 DAYS OF FIRST RECEIVING  AN

INCOME.
Documentation to submit:

• Proof of identity
• Proof of address
• Proof of bank details.
REGISTERING WITH COMPANIES
AND INTELLECTUAL PROPERTY
COMMISSION (CIPC)

•CIPC’S WEBSITE ALLOWS
BUSINESS OWNERS TO REGISTER
THEIR COMPANIES ONLINE.

•ONCE YOU ARE REGISTERED AS

A CIPC CUSTOMER YOU WILL BE
ABLE TO ACCESS THE
TRANSACTIONAL WEBSITE.
MANAGEMENT GUIDE SOUTH
AFRICA

•P E R S O N A L
RELATIONSHIPS AND GETTING TO KNOW
YOUR COLLEAGUES IS THE KEY BECAUSE THE
COUNTRY WAS CLOSED TO OUTSIDE INFLUENCES FOR
MANY YEARS, SOME OLDER AFRIKANERS REMAIN
SUSPICIOUS OF ANYONE WHO MIGHT DILUTE THEIR
CULTURE, INCLUDING FOREIGNERS.
THE ROLE OF A MANAGER
The purpose of meetings in South Africa is to share information among co-workers. There is not
a great deal of emphasis placed on position or status. All present are assumed to have value and
therefore have value to contribute. The agenda will be set by the leader, and the leader will guide
the pace and content of discussions, but all present have both an obligation and a right to
contribute.
 AP PR OA C H T O C H A N GE
TER C U LT URA L A D A PTA B ILITY AND
SOUTH AFRICA’S IN P A R EN T. SOUTH AFRICA
R CH A NG E IS A P
READINESS FO O LE R A NC E FO R CHANGE
A M ED IUM T
IS SEEN TO HAVE AND RISK.
 C H T O TIM E A N D P R IOR IT IES
APPROA

IS A C O NT R O LL ED -T IM E C ULTURE, AND
SOUTH AFRICA LE S IS IM P OR TANT AND
ADHERENCE TO SC H ED U
SO UTH AF R IC A M IS S IN G A DEADLINE IS A
EXPECTED. IN A ND IN EF FICIENCY, AND
A NA G EM EN T
SIGN OF POOR M P EO PL E’ S C ONFIDENCE.
W IL L SH A KE
DECISION MAKING

•AS WITH MANY OTHER ASPECTS OF SOUTH AFRICAN BUSINESS, THE

RELATIONSHIP BETWEEN MANAGERS AND SUBORDINATES IS
CHANGING.
BOSS OR TEAM PLAYER?
IN SOUTH AFRICA, GROUPS COLLABORATE WELL
TOGETHER AS TEAMS.

•MEMBERS ARE GENERALLY CHOSEN TO PARTICIPATE BASED ON

TANGIBLE SKILLS OR THE KNOWLEDGE BASE THEY BRING, AND ARE
EQUALLY WELCOME TO CONTRIBUTE TO ANY DISCUSSION THAT MAY
ARISE.
 TYPE S O F T A X E S
IN S OU TH A F RI C A
DEFINITION OF T A X :

“What is the difference between
a taxidermist and tax collector?
The taxidermist takes only your
skin,”-Mark Twain
TAXES…
“The best things in life are free,
but sooner or later the
government will find a way to tax
them,”-Anonymous
“The politicians say ‘we’ can’t
afford a tax cut. Maybe we can’t
afford the politicians,”-Steve
Forbes
 The South African Revenue Service (SARS) is the revenue service (tax
collecting agency) of the South African government.
 South Africa uses a residence-based taxation system whereby residents are
taxed on worldwide income and non-residents are taxed on South African-
sourced income.
THE CORPORATE TAX

• IT IS STANDARD TAX ON INCOME FOR REGISTERED

COMPANIES IN SOUTH AFRICA AND ITS RATE IS 28%

• IT IS COLLECTED BY THE SOUTH AFRICAN REVENUE

SERVICES (SARS)

• THE CORPORATE TAX RATE IN SA IS ABOVE THE GLOBAL

AVERAGE (24.18%)
OTHER TYPES OF BUSINESS TAX
• PAYE-PAY AS YOU EARN
• SKILLS DEVELOPMENT LEVY (SDL)
• IF EMPLOYERS TOTAL ANNUAL SALARY IS MORE THAN R500,000, THEY WILL BE CHARGED AT A RATE
OF 1% OF THE TOTAL SALARY BILL TO PROMOTE THE LEARNING AND DEVELOPMENT OF EMPLOYEES IN
SA

• DIVIDEND TAX
• 20%
• FOREIGN BUSINESS OWNERS
• IF YOUR BUSINESS IS BASED IN SOUTH AFRICA, YOU WILL BE RESPONSIBLE TO PAY CORPORATE TAX
IN SA ON ITS WORLDWIDE INCOME.
• IFYOUR BUSINESS IS A NON-RESIDENT COMPANY, YOU WILL ONLY PAY TAX IN SOUTH AFRICA ON
INCOME EARNED INSIDE THE COUNTRY
• 20%
• STANDARD PRIVATE COMPANY
• 28%
• MICRO-BUSINESS
• YOU PAY TURNOVER TAX AND THIS TAX OCCURS WHEN MERCHANDISE
HAS BEEN SOLD

• SMALL BUSINESS CORPORATION

• TAXED AT A LOWER RATE OF CORPORATE TAX
 INCOME
TAX

VALUE
DOUBLE
ADDED TAX
TAXATION
(VAD)

CUSTOMS
TAXES
CAPITAL
AND EXCISE
GAINS TAX
TAXES

PAYE (PAY
TRANSFER
AS YOU
DUTY
EARN)
 IN SO UT H A F R IC A
TYPES OF TAXES
O M E T A X I S L E V I E D ON ALL
• INCOME TAX – INC
P R O F I T B Y A T A X PAYER, WHICH
INCOME AND S, AND TRUST.
D U A L S , C O M P A N I E
INCLUDES INDIVI
I S A P P L I E D T O B O TH EARNED
INCOME TAX  M M I S S ION) AND
ALARI E S A N D   C O
INCOME (WAGES, S T E R EST AND
( D I V I D E N D S , I N
UNEARNED INCOME
RENTS). 
 IN SO UT H A F R IC A
TYPES OF TAXES
A T ) - V A T ( V A L U E ADDED TAX)
(V
• VALUE ADDED TAX C E D AT A STANDARD
OD S A N D S E R V I
APPLIES TO ALL GO C E R T AIN ITEMS ARE
4% . H O W E V E R ,
VAT TAX RATE OF 1
E . G . E X P O R T S , P E TROL, DIESEL AND
ZERO-RATED, W N B R EAD, MILK
(SU C H A S B R O
BASIC FOOD ITEMS R E E X E MPTED FROM
IN S E R V I C E S A
AND FRUIT). CERTA E R V I C E S, PUBLIC
EDUC A T I O N A L S
VAT, FOR EXAMPLE
O R T A N D R E S I D E N TIAL RENTAL
TRANSP
ACCOMMODATION.
 IN SO UT H A F R IC A
TYPES OF TAXES
A X - C A P I T A L G AINS TAX
T
• CAPITAL GAINS DISPOSED
A N A S S E T I S
APPLIES WHEN
E R W O R D S I T CHANGES
OF, IN OTH WHEN A
X A M P L E S A R E
OWNERSHIP. E P A NY SHARES
O L D O R C O M
PROPERTY IS S
D . L O N G S T O R Y SHORT, IT
ARE ACQUIRE F ROM THE
D O N P R O F I T
IS A TAX LEVIE N V E S TMENT.
RTY O R A N I
SALE OF PROPE
TYPES OF TAXES IN SOUTH
AFRICA
• PAYE(PAY-AS-YOU-EARN)-WHEN A FIRM
EMPLOYS PERSONNEL, TAX IS DEDUCTED FROM
THE EMPLOYEE’S SALARIES . THE ADVANTAGE OF
THIS IS THAT TAX LIABILITY FOR A YEAR IS PAID
OFF OVER 12 MONTHS, INSTEAD OF A LUMP SUM
BEING CHARGED AT ONE TIME.
Taxable income Rates of Tax
$0-$10,665 18% of taxable income
$10,665-$16,655 $1,920 + 26% of taxable income above $10,665
$16,655-$23,050 $3,477 + 31% of taxable income above $16,655
$23,050-$30,255 $5,460 + 36% of taxable income above $23,050
$30,255-$38,570 $8,053 + 39% of taxable income above $30,255
$38,570-$81,681 $11,296 + 41% of taxable income above $38,570

$81,681 - and above $28,972 + 45% of taxable income above $81,681

TYPES OF TAXES IN SOUTH AFRICA

• TRANSFERDUTY-TRANSFER DUTY IS PAYABLE BY

INDIVIDUALS WHEN THEY ACQUIRE PROPERTY
AT PROGRESSIVE MARGINAL RATES BETWEEN 0%
AND 8%.
TYPES OF TAXES IN SOUTH AFRICA

• CUSTOMS AND EXCISE TAXES-THIS TAX IS

LEVIED AS A SPECIFIC DUTY ON TOBACCO AND
LIQUOR AND ALSO ON COSMETICS, TELEVISIONS,
AUDIO EQUIPMENT AND MOTOR CARS,
ACCORDING TO THEIR COST AND MARKET
VALUE. THEY ARE LEVIED ON IMPORTED GOODS
WITH THE AIM OF RAISING REVENUE AND
PROTECTING THE LOCAL MARKET. 
DOUBLE TAXATION AGREEMENTS

• SOUTH AFRICA HAS ENTERED INTO AGREEMENTS

WITH SEVERAL OTHER COUNTRIES TO AVOID
DOUBLE TAXATION INCLUDING: AUSTRIA, BELGIUM,
CANADA, CYPRUS, DENMARK, FRANCE, GERMANY,
INDIA, IRELAND, ISRAEL, ITALY, JAPAN, KOREA,
MALTA, MAURITIUS, THE NETHERLANDS, NORWAY,
SINGAPORE, SWEDEN, SWITZERLAND, TAIWAN,
THAILAND, THE UNITED KINGDOM AND THE UNITED
STATES.
GIORGI ZAKAREISHVILI
GIORGI KVIRKVIA
NINO SOZIASHVILI
LUKA NIJARADZE