According to recent reports, startups in South Africa raised over $832m in 2021. More and more foreign companies and investors are setting up local and regional operations to take advantage of South Africa's strategic location, comprehensive air and sea routes, and status as a continental financial center. Business registration in South Africa is also straightforward as South Africa's Companies and Intellectual Property Commission (CIPC) constantly updates its service charter to improve the business delivery timelines required to register businesses in South Africa.
South Africa has a market-based economy and is widely considered the economic, commercial, and logistics hub of Southern Africa and one of the 'big 4' of Africa. With the most robust industrial base in the south of Africa, South Africa has successfully attracted venture capital investments. The country remains a leading destination for businesses and brands looking to expand beyond their borders.
Investing in South Africa for foreigners
Can a foreigner do business in South Africa? Absolutely! Foreigners who want to do business in South Africa must, without a doubt, register a company. They are required to register on the e-services portal and proceed to obtain the company registration documents.
Business Registration South Africa
There are two business forms open to foreigners in South Africa. These are: registering as a local company or registering as an external company. Most individuals or organizations prefer to register a local company. Now let's look at the subt
- Local Company/Subsidiary
The procedure of incorporating a local company by a foreigner is similar to the registration of a local company by a citizen but for the requirements. There are different types of companies however, most foreign individuals or entities opt for a private company limited by shares. - External Company
This can be registered for companies with a reduced level of activity as this does not generally require incorporation in South Africa, but to register one, certain financial disclosures are required by the parent company.
Business Registration Requirements in South Africa
The requirements for Registering a Company in South Africa include the following:
- Proposed Company/Business name
The proposed business name search is conducted to ensure it is not similar to an existing registered business. If approved, it is reserved for 60 days. CIPC allows for a maximum of 4 names to be submitted. - Objectives of the Business
This should entail what the business or company is set to carry out. the objective of the business must be entirely legal and not against public policy. - Physical Office Address
A physical business address is one of the strict mandatory requirements for businesses to operate in South Africa - Names of the Directors, contact details, and
email
For transparency and accountability purposes, CIPC requires that the director's information be indicated on the application for registration. - Proof of Identification
A valid and unexpired proof of identification must be provided for each director and shareholder during the registration process. For foreigners or non-citizens, an international passport is required. - Passport Photo
A clear and recent passport photograph must be provided for each director and officer of the company.
In addition, the following forms must be initialed or signed and dated by all directors and submitted during registration - Form CoR14.1 – Notice of Incorporation.
- Form CoR14.1A – Notice of Incorporation, Intial Directors of the Company.
- Form CoR14.3 – Registration Certificate.
- Form CoR15.1 – This is the Memorandum of the company with share capital.
After submitting all required documents, a registration certificate is received from the South African Registrar of Companies. If an external company is registered, a certificate of compliance will be issued. is registered, a certificate of registration will be issued.
It should be noted that the South African Revenue Service tax registration is mandatory for entities in South Africa, for the purpose of tax filing and payments. This is why a SARS tax reference number is automatically generated once registration with the CIPC is completed. Get a complete understanding of tax registration in South Africa by clicking here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
