What is the Gauteng Provincial Government's investment focus?
The Gauteng Provincial Government has identified the following areas for focus on new investments: infrastructure, logistics, ICT, telecommunications, services industries and tourism.
The province has identified opportunities in waste management (turning waste into energy), environmental and pollution management, development of clean technologies, the automobile industry and agriculture.
Where can I find business opportunities in the province?
The Gauteng Enterprise Propeller is an investor's first port of call for developing business relations in Gauteng and the rest of Africa. GEP is Gauteng's official economic, investment and trade promotion agency and its mission is to promote the economic growth and development of the province.
GEP identifies and markets investment opportunities in the province and responds to requests for assistance from potential local and foreign investors. It also hosts regular outward missions and provides local industry with opportunities to bid for local and international tenders, with specific emphasis on the European market in the engineering parts industry.
What types of companies can operate in Gauteng?
The Companies Act regulates all South African companies. There are a few choices of legal entities. The Companies and Intellectual Property Office (CIPRO) administers registration of new businesses.
The first step is to reserve a name at CIPRO. A memorandum of the company and consent of its auditors must accompany the application for registration. The process takes 4 to 6 weeks and costs around R3300 excluding VAT.
These business entities must have founding statements. Registration is also done through CIPRO and takes around 4 to 6 weeks to complete. Close corporations may have 1 to 10 members.
Sole proprieties and partnerships
It's not necessary to register a sole propriety or partnership but you will need to obtain a bank account in order to reserve a name. Sole proprieties are also subject to the same tax regulations, VAT and levies as other legal entities.
What sort of taxes and levies can I expect to pay?
Businesses that operate or derive their income from within the borders of South Africa are subject to certain levies and taxes. The South African Revenue Services manages the tax system. Any business profits derived from business activities in South Africa are taxable. Businesses can select their own financial year-ends. All enterprises must complete annual tax return forms. Provisional tax estimates are conducted and payable twice a year. Branches and agencies of foreign companies are taxed at a rate of 35%. Trusts are taxed 42%. Businesses must pay the following taxes and levies:
The country has progressive taxation on all personal income arising from within South Africa.
Value Added Tax (VAT)
A business with a turnover of more than R300 000 a year must register for VAT. VAT is an indirect form of taxation payable on goods and services delivered. Enterprises have a VAT cycle of two months.
Businesses must contribute to the Unemployment Insurance Fund (UIF), which is a fund set up for workers who lose their jobs. Employers make a payment 2% of their monthly allocated salaries up to a certain established total. Contact the Department of Labour.
Employers must register their employees for workmen's compensation and must contribute to the fund. The fund provides compensation for injuries while at work.
Levy for the development of skills
Enterprises must pay a levy of 0.5 to 1% on the total amount of its salaries when the payroll is more than R500 000 a month. The levy is used to fund the education and skills development of workers in South Africa.
What types of businesses need a license to operate?
Although no trading licenses are required for most new businesses in Johannesburg, certain types of enterprises may not trade without proper trade licenses. The Business Act 71 of 1991 governs it. The following businesses need to obtain licenses:
- Health clinics, spas, saunas, and public baths
- Massage, laser, and ultraviolet treatment centres
- Escort agencies
- Adult shops
- Pool rooms
- Any business with three or more vending or slot machines
- Places that serve food, provide take-aways or transport meals
How do I apply for a trade licence?
In Johannesburg, trade licences can't be transferred to other premises or people. If you buy a business that requires a licence, you will have to apply for a new licence. The rates for licences differ according to the type of business.
- Complete the application form for the issue of a licence, obtainable from the city council offices.
- Attach copies of the company memorandum and articles, or founding statement in the case of a close corporation, identity document or passport and visa certificates of all members or shareholders and the manager in charge of the business.
- If the business is a restaurant, fast food outlet, or a coffee shop, you must also include a copy of the proposed menu.
- Submit the form and pay the relevant licence fee. The licence must be renewed every year.
- The trade licence division provides verification of your application and payment, and then drafts a statement that is sent to the following divisions: Noise and Air Pollution Management; Building Inspection; City Planning; Community Safety, and Environmental Health.
- Each of the divisions draft reports on their findings and a notice is sent to you about the minimum requirements to be met. Once you have complied with these, you arrange another inspection of the premises.
- The licence is then issued.
What is Black Economic Empowerment?
South Africa's policy of black economic empowerment (BEE) is not simply a moral initiative to redress the wrongs of the past. It is a pragmatic growth strategy that aims to realise the country's full economic potential.
Companies must comply with regulations if they want to qualify for incentive schemes or obtain contracts from government. The BEE strategy aims to empower previously disadvantaged people through management positions and ownership of businesses. Businesses must have a set percentage of black people in management, shareholding and partnerships. Any person or company who wishes to establish an operation in South Africa should get acquainted with the procedures and regulations.
Each sector has its own BEE scorecard that indicates how well a business has adapted to BEE requirements. The plan outlines voting rights, economic interests, and accrual of bonus points, human resources, and investment policies regarding empowered entities. Enterprises are classified according to the total of blacks in top or ownership positions:
- Black enterprises have more than 50% black ownership.
- Black empowered businesses have 25% or more black ownership or one quarter of the managers are black people.
- Black influenced businesses have 5.1% black ownership.
- Black engendered enterprises have more than 25% black women managers.
- Black community endeavours have at least one black shareholder that represents the larger group.
What equal opportunity policies are there?
Although discrimination on the base of gender, religion, or race in the workplace is strictly prohibited, you may find many job advertisements stating that the company is an equal opportunity or affirmative action employer. This means that people from the previously disadvantaged black, Indian/Asian and coloured population groups will be given preference for the positions advertised.
What about occupational health?
The Occupational Health and Safety Act of 1994 govern the safety of employees while they are at work. According to the act, an employer must take steps to reduce the risk of injury at the workplace.
What are the basic conditions of employing people?
The Labour Relations Act and the Basic Conditions of Employment Act protect the South African workforce. These two acts stipulate working conditions, hours, basic salaries, vacation time, sick leave, and the worker's rights.
What opportunities are there in biotechnology?
Gauteng has taken the lead in biotechnology with its Biotechnology Regional Innovation Centre (BRIC) known as Biotechnology Partnerships and Development, or BioPAD. The BRICs comprise of anchor investors, an incubator, a technology platform and a research programme. Investors keen on developments in biotechnology should consider Gauteng as a means of furthering their interest, as its own BRIC was established in Pretoria with a focus on animal health and production. BioPad's mission is to broker partnerships between researchers, entrepreneurs, business, government and other stakeholders to promote innovation and create sustainable biotechnology businesses in support of South Africa's needs.
Where can I find resources for doing business with women?
Contact one of a multitude of local networks and national structures, including:
What does The Gauteng Office of Consumer Affairs do?
The Gauteng Office of Consumer Affairs works to:
- receive, investigate and dispose of complaints of alleged unfair business practices
- refer cases to the Gauteng Consumer Affairs Court
- educate consumers
- initiate investigations even if no cases were lodged and make known that investigation known by publication in Provincial Gazette
- perform any other functions assigned to it under the Consumer Affairs Act No.7 of 1996
What powers can the Consumer Affairs Court exercise?
The Consumer Affairs Court can:
- issue a summons to empower an investigating officer to search premises and seize documents
- summon people to appear before the court or to produce documents
- issue temporary orders to cease an unfair business practice
- hear, consider and make a decision on any matter before the court
- award costs against any person found to have conducted an unfair business practice
- appoint a curator to take over the running of a business and realise its assets to reimburse consumers who have lost money
- deal in general with all matters necessary or incidental to the performance of its function according to the Consumer Affairs Act No.7 of 1996
- confirm arrangements negotiated by the Gauteng Office of Consumer Affairs to discontinue unfair business practices
- order companies or persons to discontinue an unfair business practice