South Africa & business
A guide for foreign businesses seeking to expand into South Africa
Is South Africa is a suitable base for generating investment and trade across the African continent? Yes, particularly in sub-Saharan Africa as it is the biggest and most inter-connected economy around. South Africa has well-developed infrastructure and established trade links with the rest of the region and the world. It is a suitable base for operating commercially anywhere in Southern Africa. It has a moderately safe business environment and a long history of successful (though perhaps not always so fair) cross border commercial ties.
Doing Business in South Africa
There are several options for structuring a business operation in South Africa. This guide highlights key areas a new business should consider before operating in the country. However, specific South African legal advice should be obtained before setting up. We will be happy to point you in the right directions.
South Africa has three levels of government – national, provincial and local. The National Assembly is the supreme law-making body. There are nine provinces, each with its own legislature, premier and executive council. Provinces can pass laws within the national framework tailored to their needs. Local governments comprising municipalities provide services to promote development. Then there are the three branches of government, legislative, judicial, and executive, with their respective seats in Cape Town, Bloemfontein, and Pretoria. The courts are well respected and their decisions substantive and meaningful.
The Business Environment
South Africa is a democracy with a progressive constitution that is the supreme law binding all government organs. The courts interpret laws passed by the National Assembly through application to specific cases. Roman-Dutch law is the primary source, with English law influence as a former British colony. There is a well-developed court system, with the Constitutional Court highest for constitutional matters. The Supreme Court of Appeal is highest for non-constitutional cases. High Courts serve provinces as courts of first instance. Magistrates' courts have limited jurisdiction.
South Africa is rich in minerals with a developed mining industry. It has a broad industrial manufacturing center and is a major food exporter. The sophisticated financial services sector and transport/telecoms systems make it one of the world’s top trading nations. According to official statistics Zulu, Xhosa, and then Afrikaans are the most widely spoken languages. English is generally the language used for business, although there are 11 official languages. The Department of Trade and Industry assists those interested in doing business, and each province has investment promotion agencies.
South Africa has faced some challenging times recently - from Covid-19's economic blows to the social unrest and looting in 2021 plus ongoing problems like power cuts, high unemployment and corruption scandals. Businesses have weathered these disruptions but the resilience and optimism of South Africans continues to shine through.
The pandemic caused major supply chain strains and revenue losses but companies adapted models, pivoted offerings and acted decisively to rebound. Load shedding frays nerves with work disruptions but businesses invest in backup power solutions while pushing government for reforms. High-profile corruption cases depress trust but strengthen accountability and signal political will to clean up governance.
Years of inequality fueled social tensions but tragedy sparked greater commitment to inclusive growth. South Africa's vibrant entrepreneurial culture steadily empowers youth and women. The free press probes malfeasance while fostering transparency.
South Africa's infrastructure, human capital strengths and gateway position for Africa trade retain powerful appeal. With pragmatic policies, energized citizens and responsible companies, South Africa can realize its immense potential. The journey to renewal has obstacles but its business spirit and national resolve will continue powering it forward.
Forming a Company
A foreign business wanting to commence operations in South Africa can incorporate a subsidiary company or register a branch office. The latter does not create a separate legal entity. Most subsidiaries are profit companies, either private or public. Private companies cannot offer shares publicly. The board needs at least one director, or more if stated in the Memorandum of Incorporation (MOI). Public companies can offer shares publicly and seek listing on the Johannesburg Stock Exchange after meeting requirements. Most companies incorporate as private, unless planning a public offer.
Key features of South African companies include:
Limited liability for shareholders/directors
MOI governs operations like shareholder rights and board appointment
Transparency through financial statements and potential auditing
Directors authorize issuing shares per the MOI
Statutory filings like director details are public record
At least one director who can be non-resident
Business rescue process for financially distressed companies
To incorporate, file Form CoR14.1 with CIPC with required details like MOI. Takes 3-14 days. Can also buy shelf companies. The most common corporate structure used by foreign companies entering South Africa is a private company incorporated under the Companies Act 2008. This offers limited liability for shareholders.
To incorporate, file Form CoR14.1 with the Companies and Intellectual Property Commission (CIPC), including the Memorandum of Incorporation (MOI) and details of directors. Takes 3-14 days. Minimum requirements include one director and one shareholder. The MOI governs operations and shareholder rights. Shareholder liability is limited to any unpaid amount on shares held. Public companies can raise capital more freely but have greater compliance obligations, like needing three directors. Most incorporate as private companies unless planning a public share offer.
See Companies Act No. 71 of 2008 and Trust Property Control Act No. 57 of 1988.
Maintaining a Company
South African companies must comply with various statutory duties under the Companies Act 2008 including:
Preparing annual financial statements that are independently reviewed or audited depending on the size.
Appointing a company secretary and auditors.
Holding an annual general meeting of shareholders.
Filing an annual return and paying fee to CIPC to show the company remains in business.
Notifying changes in registered office, directors, shareholders and share capital to CIPC within prescribed timelines.
Directors also have duties under the Companies Act 2008 and common law to act with care, skill and diligence, and in good faith for the company's benefit.
Dissolving a Company
A South African company can be dissolved voluntarily by shareholder resolution or involuntarily via liquidation if it is insolvent. Voluntary dissolution involves lodging a special resolution with CIPC and settling debts before distributing net assets. CIPC will then issue a certificate of dissolution. Involuntary liquidation starts with an application to court, usually by creditors. The court appoints a liquidator to take control of the company and sell assets to pay off debts. Any surplus gets distributed to shareholders. This ends when CIPC deregisters the company.
Financing a Company
South African companies can be financed through share subscriptions and/or loans. Funding can come from parents/third parties. 0.25% Securities Transfer Tax (STT) applies on share purchases/transfers (not new subscriptions).
No prescribed minimum share capital/loans. Buybacks allowed subject to restrictions. Exchange control laws administered by the South African Reserve Bank (SARB) apply. Non-residents can acquire shares/assets with certificate endorsement by an authorized SARB dealer. Certain sectors need specific authorizations. Income like dividends/interest is freely remittable abroad at prevailing exchange rates. Proceeds from asset sales also freely remittable. Non-resident Rands are not subject to exchange control. However, residents cannot send Rands abroad without SARB approval. Non-residents/“affected persons” have limited borrowing capacity in South Africa based on a set formula.
Opening a Branch Office
Foreign companies can establish branch offices without a new subsidiary. The branch is an extension of the foreign company which holds direct liability. Under the Companies Act 2008, foreign companies must register as an “external company” within 20 days of first conducting business. This doesn't create a new entity but subjects the foreign company to certain provisions. Requirements include continuously maintaining at least one office, appointing a local agent for legal service, filing details like directors, and preparing annual financial statements. Public securities offers require following specific rules.
Opening a Bank Account
Accounts can be resident or non-resident. Non-residents have normal residence/registration outside the Common Monetary Area (South Africa, Namibia, Eswatini, Lesotho). It can actually be quite a hassle to deal with banks in South Africa, and exchange controls can be tight and cumbersome. Approach a bank directly with original company documents and director identity proofs. Banks must comply with anti-money laundering laws. Consent for checks may be needed. Minimum opening balances nearly always apply. There is very limited competition in the banking world because it is so highly regulated and the gatekeepers know that. This permits the bigger banks such as ABSA, Standard Bank, NedBank, and First National Bank dominate, with a few smaller rivals. The South African Reserve Bank (SARB) is responsible for banking regulation and supervision to promote financial stability.
Key regulations include:
Banks must meet minimum capital requirements set by Basel III standards.
Banks are subject to limits on exposure concentrations to prevent overexposure to single borrowers/sectors.
Banks must comply with liquidity coverage ratios and net stable funding ratios.
The National Credit Act regulates consumer credit granted by banks.
Banks must have risk management policies and practices to identify and control risks.
Banks are subject to on-site and off-site surveillance by SARB to monitor compliance.
Banks must join the Ombudsman for Banking Services scheme for complaint resolution.
Banks must comply with financial intelligence and anti-money laundering duties.
Adhering to SARB’s stringent supervision enables banks to operate safely and soundly. However, that comes with a pricetag as compliance with such strict procedures is cumbersome, and creates an endless bureaucracy that could be better served by the FinTech space, though its role in job creation is important as well.
Utilizing Office Space
Property can be owned or leased. Purchasing allows establishing owned offices. No restrictions on non-residents acquiring property. Commercial leases are typically 5-10 years but any term can be negotiated. Over 10 years needs title registration. Leases tend not to allow early termination or break options. Rent is usually monthly based on square meterage with fixed annual escalation. Some leases have additional charges for utilities, taxes etc. Landlords commonly require a deposit of 1+ month’s rent as security against default. Personal sureties are nearly universally required. Consent is required before assigning/sub-letting leases. Landlords assess new tenant ability to meet obligations.
Immigration Controls
The Department of Home Affairs is one of the least trustworthy institutions in South Africa. I could go on a rant that would last for days about the ills that go on there.
Foreign employees need work visas before starting employment, including:
General work visa – up to 5 years, must compete with citizens/residents
Intra-company transfer – up to 4 years, no extension
Exceptional skills visa
Corporate visa – for predetermined positions
Business/self-employed visa – prove at least 60% South African staff, R5m investment from abroad
Supporting documents needed depending on visa type. Availability of citizens/residents with appropriate skills is key consideration, they say. You must apply at South African consulates or Department of Home Affairs. Must be office with jurisdiction where employee will work. Actually, don't bother. If you do not hire an attorney, this will not work out for you. It is probable that during the processing you may be approached for a bribe, which you should not, under any circumstances, be tempted into paying. Hire a good attorney and follow their advice, and they will likely be able to help you navigate the process, but it is not recommended that you "go it alone" or attempt to spend too much time in South Africa without making a plan. It is not impossible, just ill-advised.
Safeguarding Intellectual Property
Robust IP protection is crucial when entering a new market. Companies should utilize legal experts to put in place an effective IP strategy aligned with their South African plans. It is no secret that the go-to firm for intellectual property rights in South Africa is well known to be Adams & Adams. Get legal help. (Reading this article alone does not count)
Here are some proactive steps you should take to secure their intellectual property (IP) rights when entering the South African market:
Identify all potential IP assets - patents, trademarks, registered designs, copyrights, and trade secrets. Conduct inventories and audits.
Perform clearance searches to ensure no conflicting prior IP rights exist in South Africa belonging to others.
For registrable rights like patents and trademarks, file applications promptly with the Companies and Intellectual Property Commission (CIPC) or patent office to establish enforceable registered rights.
Put in place agreements like licensing contracts, development agreements, and IP assignment clauses in employment contracts to secure rights to IP created by employees and third parties.
Implement confidentiality policies, cybersecurity controls, and physical access restrictions to protect trade secrets and confidential information from misuse or unauthorized disclosure.
Train and create awareness among staff on IP issues through workshops and manuals to avoid inadvertent breaches.
Take swift action to tackle suspected infringement through cease and desist letters, mediation, or filing court injunctions and lawsuits.
Key Employment Laws
Employment is regulated by statute, common law and contract. Key laws protect against unfair dismissal/labor practices, regulate collective bargaining, set minimum standards on conditions through the Basic Conditions of Employment Act 1997, and prohibit discrimination or require affirmative action. Other laws establish unemployment insurance, impose safety duties, provide workers compensation, and enable skills development through training levies.
Labor Relations - Termination of Employment
The Basic Conditions Of Employment Act, 75 Of 1997 sets minimum termination notice periods depending on length of service. Contracts can have longer periods but not shorter. Employees can claim unfair dismissal if termination is substantively or procedurally unfair. Misconduct, incapacity or operational requirements are valid reasons, each with specific processes. Remedies include reinstatement or compensation. Compensation is limited to 12 months’ remuneration, or 24 months for discriminatory dismissal. You have to go through the CCMA or some similar such organization established under separate Union rules. Develop constructive labor relations. Comply with employment laws and standards. Engage with unions transparently and proactively address worker disputes through proper procedures.
Trade Unions
You should also bear in mind that trade unions have played a major role in South Africa's socio-economic landscape. They play a really outsized role in the politics and history of South Africa itself, with events like Marikana forming a part of our living memory. In some industries, trade unions might have a real impact on your business. Unions like COSATU have large memberships spanning multiple industries. Unions provide worker protections through collective bargaining but prolonged strikes in sectors like mining have disrupted production. However, unions have helped address inequality through minimum wage agreements. While union demands increase labor costs, coordinated negotiations help foster industrial relations stability. Unions also contribute to skills development. Overall, unions provide countervailing power to employers but a balance is needed between worker rights and retaining competitiveness. Constructive labor relations remain key to economic progress. We have worked with people on both sides and find that all South Africans want constructive discussions about how to make things better for everyone. If you negotiate in good faith, you can always come up with a way forward.
Leave & Remuneration
Employees get minimum paid annual leave of 21 consecutive days, 1 day for every 17 days worked, or 1 hour for every 17 hours worked. Leave must be granted within six months. Pay is equivalent to what the employee would have earned if working. There are 12 statutory public holidays. A holiday falling on Sunday gives the next Monday off. Public holidays can be exchanged by employee agreement. Sick leave entitlement equals the number of days normally worked over six weeks. Statutory maternity leave is four months unpaid. Some employers offer paid maternity benefits. Limited benefits can be claimed from the unemployment fund. Three days paid family responsibility leave per year is available after four months of employment for events like a child’s birth or family death. It does not accumulate.
Employers must pay remuneration in South African currency daily, weekly, fortnightly or monthly in cash, by cheque or direct deposit. Cash payments must be during working hours in a sealed envelope. Remuneration must be paid within seven days of the period it relates to or contract termination.
Contracting with Third Parties
General contracting principles in South Africa include:
Freedom of contract, though courts intervene if constitutional rights are violated
Contract formation through offer and acceptance based on certainty, completeness
Contractual obligations must be possible to perform and sufficiently certain
Lack of authority can make a contract unenforceable
Capacity limits on minors etc. should be checked
Key laws like the Consumer Protection Act 2008 and National Credit Act 2005 regulate and prohibit certain terms in consumer and credit agreements. Home Loan and Mortgage Disclosure Act No. 63 of 2000, Insolvency Act No. 24 of 1936, National Credit Act No. 34 of 2005.
Get advice to avoid illegal/unfair terms that may be unenforceable. Implied and tacit terms derive from common intention of parties, as do warranties and exemptions. But the latter are treated cautiously by courts given their restrictive nature. Penalty clauses are enforceable but a court can reduce disproportionate penalties. The real trick to navigating the complexity is to prepare terms of service or pro forma agreements that will protect and benefit your business, and which will hold up in any court. Speak to an attorney. We recommend Natalie Lubbe. https://www.nlateam.com/ Reach out to her or Vuyani Phenduka, attorneys in Sandton, Gauteng, for advice on legal agreements.
Taxation Overview
South African residents are taxed on worldwide income, while foreign companies with local branches pay tax on South African-sourced income only. Income tax for companies is 27% (lower rates for small business corporations). South African Revenue Services (SARS) is the governing tax authority. Key taxes include Value-Added Tax (VAT) on goods/services (15% standard rate), Capital Gains Tax (CGT) on asset disposals, Donations Tax, Employees Tax (PAYE), Dividends Tax (20%), Securities Transfer Tax (0.25%) and Withholding Taxes. Seek advice on the tax implications applicable to your specific business circumstances and transactions.
Tax Compliance
You should keep meticulous tax records and ensure accurate filing and on-time payment of all applicable taxes like corporate income tax, VAT, payroll taxes, and withholding taxes. You should also comply with transfer pricing rules.
Recommended actions include:
Appoint experienced local tax advisors to guide compliance across corporate income tax, VAT, payroll taxes, withholding taxes and more.
Ensure tax registrations are in place for all applicable taxes. Keep registration details current.
Implement robust processes and accounting software to accurately track tax obligations and payments.
Maintain organized records of tax computations and filings for at least 5 years as required. Consider digitizing records.
File timely, accurate tax returns. Comply with payment deadlines. Avoid penalties and interest.
Make VAT calculations on invoices precisely. Regularly review VAT filings.
Keep abreast of legislative changes to tax rates, processes and requirements.
Assess applicability of available tax exemptions, deductions, allowances and double tax treaty benefits.
Plan transactions to maximize tax efficiency within legal boundaries.
Provide employees with tax residency certificates and necessary payroll information.
Prepare and submit compulsory transfer pricing documentation.
Proactively engage with SARS on any disputes. Seek opinions and rulings upfront where uncertain. With proper policies, technology tools and specialist support, foreign companies can effectively meet South African tax obligations.
See Income Tax Act No. 58 of 1962 and SARS.
Regulatory Compliance
Key regulators include CIPC for company law, the Takeover Regulation Panel for mergers/acquisitions, the Competition Commission for antitrust issues, the Financial Sector Conduct Authority for regulated financial entities, the National Credit Regulator for credit providers, and the Information Regulator for personal data protection under the Protection of Personal Information Act 2013 (POPIA). Maintain updated company records with CIPC. Notify material changes like director appointments or share issues as required. Keep informed of regulatory developments.
Corporate Governance
You must ensure company governance structures like boards and shareholder meetings adhere to the Companies Act 2008 and accepted practices. Keep registrations current with CIPC and make filings on time. Stay up to date on changes to company law. Maintaining strong corporate governance is vital for foreign companies in South Africa.
Key focus areas should include:
Ensure the board has adequate independent directors for objective decision-making. Appoint competent directors with diversity of experience, views and backgrounds.
Hold regular board and shareholder meetings as required by law and the company's Memorandum of Incorporation. Properly record minutes.
Establish board committees with clear written terms of reference to oversee critical functions like audit, risk, remuneration and social & ethics responsibilities.
Put in place conflict of interest policies and a code of ethics. Directors must fully disclose conflicts and act ethically.
Adopt integrated reporting for a holistic overview of financial and non-financial performance, including on environmental, social and governance factors.
Treat all shareholders equitably and protect minority shareholder rights. Disclose material information timely.
Implement robust internal controls, risk management and compliance monitoring to safeguard against fraud, negligence and malpractices.
Build a healthy compliance culture through leadership commitment, accountability and ethical staff conduct.
Keep informed of legal/regulatory changes and King IV governance standards. Ensure governance structures and practices align with South African best practice expectations. This helps instill stakeholder trust and confidence.
Financial Reporting
Prepare annual financial statements per South African accounting standards and have them audited/independently reviewed as required. File and publish reports within stipulated periods. Foreign companies in South Africa must comply with financial reporting requirements under the Companies Act 2008.
Key aspects include:
Preparing annual financial statements following South African accounting standards.
Getting annual financials independently reviewed or audited based on public interest score.
Appointing an auditor registered with IRBA if audit required.
Presenting annual financials for approval by shareholders.
Filing and publishing annual financials and reports within prescribed timeframes.
Disclosing non-financial information in integrated reports.
Submitting interim 6-month financial results if a public company.
Non-compliance carries penalties and reputation damage. Enlist experienced accountants and auditors to ensure financial reporting meets legal standards and deadlines.
Exchange Control
You need to understand exchange control regulations and secure SARB approvals where necessary for transactions like profit repatriation, forex dealings, and outbound investments. Unlike other hard currencies, South Africa's Rand has a number of bureaucratic controls in place around its conversion into other currencies. Really, the Rand only trades with the US dollar, and then trades are executed further on. Appoint an authorized dealer. South Africa has exchange controls administered by the South African Reserve Bank (SARB) to manage capital flows. Foreign companies must comply with regulations. Key aspects include:
Understand restrictions applicable to transactions like importing/exporting funds, outward investments, foreign loans and forex dealings.
Obtain necessary SARB approvals before undertaking restricted transactions. An Authorised Dealer can facilitate applications, or hinder them terribly.
Repatriate dividends, profits, proceeds from asset sales and loan repayments by foreign investors through an Authorised Dealer.
Ensure prescribed limits and conditions are met if funds are retained locally e.g. Rand balances for working capital needs.
Keep share registers updated specifying South African and non-resident shareholders. Obtain SARB endorsement for share certificates issued to non-residents.
Declare inward investments correctly as approved by SARB.
Maintain full and accurate records of foreign exchange transactions for inspection.
Monitor compliance regularly. Breaches can lead to penalties, unwinding of transactions and criminal prosecution.
Appoint compliance staff well-versed in exchange control laws.
Obtaining expert advice can help navigate the regulations and associated approval processes. Proactive compliance ensures foreign companies remain qualified to operate in South Africa and not run afoul of any exchange control procedures. See also, Customs And Excise Act, 1964 (Act No. 91 Of 1964).
Black Economic Empowerment
Black Economic Empowerment (BEE) is a government policy for economic transformation enabling black South Africans to substantially participate in the economy. To some this is a contentious policy, but most importantly to remember, it is not any mere policy, but the law of the land. To do business in South Africa one must understand this law, finish en klaar.
The Broad-Based Black Economic Empowerment Act 2003 provides a framework for BEE implementation. The government has published a Code of Good Practice with transformation recommendations for business. Industry stakeholders have also negotiated transformation charters in sectors like financial services, accounting, construction, forestry, property, agriculture, marketing, communications, technology, tourism and transport. Foreign companies have entered BEE equity transactions to improve chances of government procurement and enhance scores. Many mining ventures are foreign backed with local BEE partners. Government contracts legally require it. There is a need to avoid window dressing and to engage in substantive black economic empowerment in South Africa and achieve its underlying aims, so no empty directorships. Find a BEE partner who will deliver for your business, and for South Africa itself.
BEE Compliance
Ensure company policies and transactions align with Broad-Based Black Economic Empowerment objectives around ownership, management control, skills development and preferential procurement. Black Economic Empowerment (BEE) aims to increase participation of black South Africans in the economy. Foreign companies can benefit by enhancing their BEE compliance.
Steps you can take include:
Obtaining an official BEE scorecard by an accredited rating agency to understand the company's current transformation status.
Setting goals for improvement aligned to BEE scorecard elements like black ownership, preferential procurement, enterprise development and socioeconomic development.
Increasing black ownership stakes through partnerships with black-owned firms or selling shares to black investors.
Sourcing goods/services from empowered black-owned businesses. Supporting their growth through enterprise development initiatives.
Providing skills development, leadership training and mentorship opportunities to black employees.
Using as diverse a supplier base as possible, with particular focus on black women-owned companies.
Investing in targeted community upliftment programs focusing on health, education and poverty alleviation.
An improved BEE score could make the company more competitive for state tenders, contracts with local businesses, and partnerships with empowered firms. It demonstrates commitment to South Africa's national transformation agenda. Proactive participation in BEE can strengthen the company's local reputation and license to operate.
Data Protection
Implement responsible data management practices compliant with the Protection of Personal Information Act 2013. To comply with South Africa's data protection law, the Protection of Personal Information Act (POPIA), businesses should:
Appoint an Information Officer to ensure POPIA compliance.
Develop data protection policies and procedures aligned with POPIA's conditions for lawful processing.
Train staff on privacy practices when handling personal information.
Put in place IT security controls like encryption and access management to protect data.
Gain consent from data subjects when collecting and processing their personal information.
Allow data subjects to access and correct their information on request.
Notify data subjects and regulator of any breaches.
Continuously monitor and update data practices to adhere to privacy laws.
Licensing Requirements
Many industries in South Africa require operating licenses that companies must hold to conduct business legally. Make sure you secure all necessary licenses, registrations and approvals to operate, including for activities like financial services provision, mining, telecommunications and healthcare services.
Steps to ensure licensing compliance include:
Identifying all licenses needed to undertake planned business activities by reviewing legal requirements.
Applying for licenses well in advance of commencing operations. Engage consultants to expedite applications.
Providing regulators with requisite information, documentation and fees to obtain licenses.
Verifying that licenses do not expire and renewing them promptly when required.
Adhering to any conditions and reporting duties associated with licenses.
Notifying regulators of material changes in business operations that could impact licenses.
Displaying licenses publicly as stipulated. Keep originals in safe custody.
Staying compliant with applicable licensing regimes is essential for legally conducting business in South Africa. There are a lot of officious minor officials who use any type of non compliance as an opportunity to extract a small bribe, and one should be wary not to fall victim to any blackmail traps. Do not pay bribes. Insist official business is conducted in writing if you suspect something is wrong, and seek review before some or another judicial officer later. The threat will shrink, hopefully.
Industry Codes
Adhere to any compulsory industry codes of conduct that have legal force such as banking, insurance, pension funds and collective investment schemes, etc. Proactive compliance practice reduces regulatory risk for foreign companies. Enlist local advisors! Certain industries in South Africa have mandatory codes of conduct that companies must adhere to:
Financial Services - Codes for banks, insurers, brokers cover conduct, treating customers fairly, resolution processes. The SAIA Code of Conduct. The Financial Reporting Standards Council (FRSC).
The Banks Act No. 94 of 1990 regulates banking including licensing and capital requirements to promote stability.
Co-operative Banks get tailored regulation under the Co-Operative Banks Act No. 40 of 2007.
The Financial Advisory and Intermediaries Services Act No. 37 of 2002 protects consumers from improper advice.
Money laundering controls arise from the Financial Intelligence Centre Act No. 38 of 2001 which can raise compliance costs.
The Financial Markets Act No. 19 of 2012 enabled modernizing market infrastructure through licensing exchanges, central securities depositories and trade repositories.
The Income Tax Act No. 58 of 1962 levies income tax, capital gains tax and dividends tax with implications for investment and growth.
Lastly, the Mutual Banks Act No. 124 of 1993 sets out rules for member-owned financial mutuals.
Investment Funds - Various conduct standards for asset managers, hedge funds, private equity. Collective Investment Schemes Control Act No. 45 of 2002
Pensions - Comprehensive regulations for fund trustees, administrators, employers, actuaries.
Accounting - Codes of professional conduct for accountants and auditors.
Legal - Ethics rules for attorneys set by provincial law societies and now the Legal Practice Counsel following reformation in the profession.
Healthcare - Ethical rules for doctors, nurses and medical professionals. Health Professions Act, 1974 (Act No. 56 Of 1974) and National Health Act, 2003 (Act No. 61 Of 2003)
Mining - Charter with transformation targets for ownership, procurement, employment equity. Mineral and Petroleum Resources Development Act, 2002 (“MPRDA”)
Commercial Paper Regulations which facilitate companies raising short-term debt.
The Competition Act No. 89 of 1998 promotes fair competition through merger controls and anti-trust prohibitions, though delays can hamper deals.
The Conventional Penalties Act No. 15 of 1962 enables contract penalties to be stipulated for breach, adding certainty.
Tight exchange controls arise from the Currency and Exchanges Act and Regulations, although relaxations have occurred over time.
The Inspection of Financial Institutions Act No. 80 of 1998 equips the SARB and Financial Sector Conduct Authority to supervise financial firms through onsite visits and ensure stability.
The Securitization Regulations enable securitizing asset pools to access capital markets for funding.
Foreign companies must research and comply with all compulsory industry codes relevant to their business. Non-compliance poses serious legal and reputation risk.
South Africa's business landscape is shaped by specialized regulations across key sectors. More examples include:
The Civil Aviation Act No. 13 of 2009 establishes the South African Civil Aviation Authority to oversee aviation safety and economic regulation. This facilitates air travel and cargo vital for tourism and trade competiveness.
The Electricity Regulation Act No. 4 of 2006 enabled introducing independent power producers to tackle supply shortages, despite ongoing load shedding challenges.
The Gas Act No. 48 of 2001 licenses and sets standards for the emerging gas industry to harness South Africa's reserves.
Telecoms are governed by the Independent Communications Authority of South Africa under the ICASA Act No. 13 of 2000 which promotes market growth through licensing and consumer protections.
Petroleum Pipelines Act No. 60 of 2003 provides for regulating the transportation of liquid fuels critical to the economy.
The Preferential Procurement Framework Act No. 5 of 2000 mandates preferential procurement to support social objectives, though critics argue it constrains efficiency.
Useful Links
Companies and Intellectual Property Commission
South African Revenue Services (SARS)
South African Institute of Chartered Accountants
Author
Jeff was born and raised in Garland, Texas. Jeff served as a combat medic before pursuing higher education. Jeff's LLB is from the University of South Africa, where he gained invaluable firsthand experience with South African law and business over nearly a decade spent living there. Jeff later obtained an LLM. from the University of Washington School of Law. Now settled with his family on Mercer Island, Jeff retains his Texas roots alongside a global perspective.