A client from Portugal asked: “We want to set up a new small company in South Africa. What are the requirements for the company, and what about immigration and work permits?”

Introduction to South African Business Permits

To set up a business in South Africa, foreign nationals need to obtain a Business Visa, which is issued under Section 15 of the Immigration Act No 13 of 2002. This visa allows individuals to establish or invest in a business in South Africa.

Requirements for a Business Visa

Key Requirements

1. Comprehensive Business Plan:
   • A detailed plan outlining the company’s short and long-term prospects is required.
2. Financial Requirements:
   • A minimum foreign direct investment of R5 million is typically required. However, this amount can be reduced or waived for businesses deemed to be in the national interest, with approval from the Department of Trade and Industry.
3. Employment Requirements:
   • At least 60% of the business’s staff must be South African citizens or permanent residents.
4. Registration Requirements:
   • The business must be registered with the South African Revenue Service, Unemployment Insurance Fund, Compensation Fund for Occupational Injuries and Diseases, and the Companies and Intellectual Property Commission (CIPC) where applicable.

Application Process

• Application Submission: Applications can be submitted online.
• Processing Time: The process typically takes several months, with an average of 6-7 months if all requirements are met promptly.

Recent Developments in Immigration Law

• Temporary Concessions: The Department of Home Affairs has implemented temporary measures to alleviate backlogs in visa processing, including extensions for pending applications.
• New Visa Categories: Recent amendments have introduced new visa categories, such as the remote work visa, allowing foreign nationals to work remotely for foreign employers while residing in South Africa.

Permanent Residence

• Eligibility: Once a temporary business permit is issued, applicants can apply for permanent residence in the self-employment category after meeting the necessary criteria.

Conclusion

Setting up a business in South Africa requires careful planning and compliance with the Immigration Act’s requirements. Understanding these regulations and recent developments can help streamline the process for foreign entrepreneurs.