Overview
The South African government offers a range of incentives to encourage foreign investment and grow South African business. Foreign companiesmay qualify for various tax incentives, while local companies are able to makeuse of schemes which include export facilitation, development finance andinvestment incentives.
| Name | Sector | Description | Objective | Administrator |
| Accelerated Depreciation Allowance | Manufacturing | Allowance to write off manufacturing asset over 4 years. +40% for cost in first year and + 20% for next 3. Assets acquiredafter 1 March 2002 | Promote acquisition of new assets in manufacturing sector | callcentre@idc.co.za |
| Agro-Industries Development Finance | Agriculture, Food, Beverage and Marine | For business needing minimum of R1 million finance. Loans, equity and quasi-equity and suspensive sales. Competitive andrisk-related interest rate | To promote the expansion of the agriculture and related industries | callcentre@idc.co.za |
| Assistance by Individual Primary Steel Producers | Steel | Primary steel producers offer price rebate scheme used by exporters of secondary steel products. | Rebates determined between producer and exporter on an individual basis. | saisi@saisi.co.za |
| Bridging Finance for Contractors and Tenders | All | The finance for those who have firm contracts excluding construction | Promotion of entrepreneurship in South Africa | callcentre@idc.co.za |
| Business Linkage Challenge Fund | Finance | On bidding basis. Must have private sectorpartner. Projects compete on global basis for available funds. Grants rangefrom £50 000 to £ 1 million | To link businesses to ensure transfer of knowledge, technology, skills, information and market access required forglobal competitiveness of particular benefit to the poor | Deloitte and Touche |
| Business Loans for Retail Finance Intermediaries | Retail Lending | Loans between R1 and R10 million (less experienced) loans from R5 to R100 million for (more experienced) | To provide finance for RFI to finance | helpline@khula.org.za |
| Competitiveness Fund | All | 50% reimbursive grant up to R600 000 per entity for provision of competitive enhancement services | To increase competitiveness of South African companies in all markets | Competitiveness Fund |
| Competitiveness Programme | Export | See Guide to Exporting from South Africa for Details | ||
| Critical Infrastructure Programme | Infrastructure development | For municipalities and companies constructinginfrastructure. Between 10 – 30% of costs covered. | Promote construction of key infrastructure for industrial development | contactus@thedti.gov.za |
| Danida Business to Business Programme | Financing | Financial support for the costs of transferring management skills and technology form Denmark to SA. Khula may provide up to100% guarantee for bank loaning money to firm | Create jobs for eligible entrepreneurs. Formation of business partnerships between South Africa and Denmark | helpline@khula.org.za |
| Depreciation Allowance | Manufacturing, Hotel, Farming | Depreciation rates on new or used assets | Promote investment in assets | callcentre@idc.co.za |
| Development Finance | Export | See Guide to Exporting from South Africa for Details | ||
| Development programme for the textile and clothing industry | Textile/ Clothing | Phase down of ad valorem rates by Sept 2002. Removal of minimum duties | To achieve international competitiveness within sector | contactus@thedti.gov.za |
| Employee Housing Allowance | All | Tax deduction equal to 50% of the cost of erecting houses available limited to R6000 per house | Promote the building of houses | callcentre@idc.co.za |
| Employment Promotion Scheme | Job creation | Provides capital up to R100 000 per opportunity | To promote job creation | contactus@thedti.gov.za |
| Empowerment Finance | Empowerment (All Sectors) | Medium-term finance (loans or equity) for buyouts or leveraged buyouts and strategic equity partnerships. For venturesworth R1 – 100 million | To promote emerging industrialists / entrepreneurs | callcentre@idc.co.za |
| Entrepreneurial Mining and Beneficiation Finance | Mining, Beneficiation and Jewellery | Finance for business with minimum requirement of R1 million | Expansion and promotion of small and medium mining and jewellery manufacturers | callcentre@idc.co.za |
| Export Credit Insurance | Export | See Guide to Exporting from South Africa for Details | ||
| Export Finance | Export | See Guide to Exporting from South Africa for Details | ||
| Export Marketing and Investment Assistance Scheme (EMIA) | Export | See Guide to Exporting from South Africa for Details | ||
| Finance for the Textiles, Clothing, Leather and Footwear Industries | Clothing and Textiles | Financial contribution of 35-50% of with minimum financing requirement of R500 000. In the form of loans, suspensive sales andequity. | Development and expansion of textile/clothing sector by providing necessary finance | callcentre@idc.co.za |
| Financial Deepening Challenge Fund | Financial Services | Covers costs of expansion of financial serviceproducts and extension of services to poor. Cost sharing grant range from£50 000 to £ 1 million | Support financial sector capacity development | Deloitte and Touche |
| Financing for the Expansion of the Manufacturing Sector | Manufacturing | Minimum of R1 million. Medium-term finance (loans or equity) for buyouts or leveraged buyouts and strategic equitypartnerships. | Development of manufacturing sector through the expansion of manufacturing capacity | contactus@thedti.gov.za |
| Foreign Investment Grant | Manufacturing (SA company with foreign direct shareholding of minimum 50%) | Grant covering transport costs of machinery from abroad or 15% of value of new machinery. Conditional to SMEDP or SIP approval | Encourage foreign investment in manufacturing sector | smedp@thedti.gov.za |
| Fund for the Committee on Secondary Manufacture | Manufacturing | Financially supported by primary steel producers. | Aimed at encouraging the use of primary steel in the manufacture of secondary steel products for export. | saisi@saisi.co.za |
| Industrial Development Zones | Development / Manufacturing / Exports | Excellent infrastructure and streamlined, efficient customs in importation of goods/raw materials used formanufacturing | Promote manufacturing and encourage and improve South African exports | contactus@thedti.gov.za |
| Innovation Support Programmes | Export | See Guide to Exporting from South Africa for Details | ||
| International Tourism Marketing Assistance Scheme | Tourism | Partial compensation of businesses for predetermined costs incurred in promotion of products related to tourism | To promote the marketing of the South African tourism industry | callcentre@idc.co.za |
| Khula Credit Guarantee | Financing | Provides maximum guarantee of R600 000 over 3years for SMMEs. Firm must have net asset value of at least R2 million and mustmeet bank’s normal lending requirements. | Promote SMMEs and RFI through the provision of guarantees for the securing of bank loans. | helpline@khula.org.za |
| Khula Equity Fund | All | Available to SMMEs with min. value of R500 000. Proof of viability required | Promotion of SMMEs with potential for growth. Funding of joint ventures and buyouts | helpline@khula.org.za |
| Khula Start | Rural Community Development | NGOs and CBOs involved in training and varioussmall enterprise activities. Groups of 3 – 10 with loans of R300– R3500 per member | Increase access to micro credit to rural communities in South Africa | helpline@khula.org.za |
| MIDP –Productive Asset Allowance | Automotive and components | Available to motor vehicle assemblers and component manufacturers is a duty credit calculated to 20% of value ofexpenditure on productive assets. The credit is against import duties and isspread equally over 5 years | To encourage fixed capital investment and rationalisation of model ranges specifically light vehicles. | contactus@thedti.gov.za |
| Motor Industry Development Programme (MIDP) | Automotive and Components | Import Rebate Credit Certificates based on export performance | To encourage an increase in local content of exported vehicles and components | contactus@thedti.gov.za |
| Orchards Schemes | Agriculture | Low interest loans granted to those establishing orchards and thus creating jobs | Encourage job creation in the agricultural sector | contactus@thedti.gov.za |
| Partnership in Industrial Innovation | Manufacturing / Information Technology | Reimbursive grant for up to 50% of development cost of product. Amount based on commercial success of product. | Stimulate industrial research and innovation | spii@idc.co.za |
| Private Sector Assistance | Export | See Guide to Exporting from South Africa for Details | ||
| Research and Development | All | Tax deduction for operating costs related toR&D of 25% of the cost of capital expenditure approved by CSIR | Promote research and innovation | callcentre@idc.co.za |
| Sector Assistance Scheme (SSAS) | Export | See Guide to Exporting from South Africa for Details | ||
| Sector Partnership Fund | Manufacturing and Agro-processing | Grant (max R 1 million) covering up to 65% of preparation costs for technical and marketing programmes | To encourage economic growth and job creation | contactus@thedti.gov.za |
| Seed Loans for Retail Finance Intermediaries | Retail Lending | Loan of between R50 000 to R20 million. Turned into grant once performance criteria have been agreed upon | Provide finance for the initial establishment and expansion of RFI | helpline@khula.org.za |
| Skills Support Programme | Training | 50% grant of training costs for SMEDP project for up to 30% of annual wage bill. | Assist new and growing companies with training costs | contactus@thedti.gov.za |
| Small and Medium Enterprise Development Programme (SMEDP) | SMMEs (Manufacturing and Tourism) | Two year cash incentive on qualifying assets and 3rd year if labour requirement is met. | To encourage investment of up to R100 million in small and medium SA companies | contactus@thedti.gov.za |
| Strategic Industrial Projects | Industry, Technology and Agrotourism | R3 billion available for investors in strategic industrial projects until 2001. Entails tax allowances of between 50 to 100% ofan approved investment | Encourage investment in Maputo Corridor, Gauteng special economic zone and Wild Coast and Fish River. | callcentre@idc.co.za |
| Strategic Investment Projects (SIP) | Investment | A capital allowance of 50% or 100% of the cost of productive assets to be used within 3 years. Applicable to enterprisesinvesting in projects that exceed R50 million | Encourage investment in important industrial sectors | contactus@thedti.gov.za |
| Structural Adjustment Programmes for Industry | Export | See Guide to Exporting from South Africa for Details | ||
| Support Programme for Industrial Innovation | All Private Sector Entities | Grant of 50% max R.1.5 million/project) of actual direct cost of product development | To encourage development of local innovation | callcentre@idc.co.za |
| Tax Threshold for Small Businesses | All | SMMEs with annual turnover of less than R3 million eligible for 15% graduated tax rate with taxable income of R150000 | Encourage development of SMMEs | callcentre@idc.co.za |
| Techno-Industry Development Finance | Computers and Communications | Equity or loan finance for companies with minimum financing requirement of R1 million for expansion or new ventures | Development and expansion of IT intensive businesses | callcentre@idc.co.za |
| Technology and Human Resources for Industry Programme (THRIP) | Organisations involved in Research and Training of Students | Contribution of R1 for every R2 spent on research project of which project and project leader is in higher educationfacility | To increase South African industry’s competitiveness | contactus@thedti.gov.za |
| Technology for Women in Business (TWIB) | Science / Technology and Engineering and Empowerment | Identification of specific technological needs of women in business | Enhancing accessibility of technology to women in business (esp SMMEs) | contactus@thedti.gov.za |
| Technology Transfer Guarantee Fund | Technology | 90% of the technology transfer transaction costs over five years. Maximum is R1 million | Allowing SMMEs access to loans for acquisition of manufacturing technology | helpline@khula.org.za |
| The Innovation Fund | Science Biotechnology and Engineering | Grant of R1 – 5 million over three years | Encourage research community towards technical innovation | contactus@thedti.gov.za |
| The Land Reform Credit Facility | Agriculture | Loans with deferred payments. Available to investors/banks financing land or shares for emerging farmers or farmworkers | Promoting increased access to commercial land. Empowerment and job creation | helpline@khula.org.za |
| The National Industrial Participation Programme | All | Available to government suppliers with imported content equal to or over $10 million with commitment to further involvement incommunity | Promote the development of South African industry | contactus@thedti.gov.za |
| Tourism Development Finance | Tourism | Minimum finance requirement of R1 million. Provision of medium-term finance (loan, equity) for upgrading or renovation oftourist facilities | Development and expansion of tourism | callcentre@idc.co.za |
| Tourism schemes | Tourism | Capital for development of new or existing tourism facilities | Development of tourism especially eco-tourism | contactus@thedti.gov.za |
| Venture Capital Scheme | All | Capital for products with good growth potential. Package structured in terms of risk and growth potential | To promote product innovation | contactus@thedti.gov.za |
| Wage Incentive | Education and Training | Available to employers offering approved (National Qualification Framework) learnerships. A tax deduction allowed onconclusion of learnership agreement and further R25000 on successful coursecompletion | To promote employee training | callcentre@idc.co.za |
| Wholesale Finance | Franchising | Medium term loans (mx 6 yrs) to intermediates who provide strong business record. | Cheap finance to intermediates for loan to individuals | callcentre@idc.co.za |
| Work Place Challenge | Manpower and Employment | Enhancement of cooperation between workers and management | Aims to improve country’s competitiveness and employment creation | contactus@thedti.gov.za |
Resources
Deloitte and Touche
Department of Trade and Industry
Guide to Exporting from South Africa
IDC
Khula
Thrip
Twib
Notes
This profile has been prepared to assist companies both inside and outside South Africa to conduct business efficiently in and withSouth Africa. While every endeavour has been made to ensure that theinformation contained in this profile is current and correct, we recommend thatcompanies making decisions based on this information contact the appropriateprofessional advisers, government department or organisation to verify thecurrent situation.
If you identify any errors or omissions in our material, then please bring these to our attention so we can continue to improve theservice we provide.
If your organisation is a key player in this area and your details are not recorded in our organisation database, then please use the MyCompany function to enter your details. The My Event function can be used toenter events.
Werksmans Attorneys , one of South Africa’s leading corporate law practices has published the Business Guide to South Africa to give the reader a brief overview of the investment climate, taxation, forms of business organisation and business, accounting and legal practices in South Africa.
Leading South African law firm Cliffe Dekker provides an overview of privatisation in South Africa which is updated on a regular basis so interested parties can stay abreast of the process.
The African Resource Network, comprising some of Africa’s leading consultancies in their fields, provides a unique one-stop African information / intelligence / research / advisory service via the Internet to companies and business-people around the world with an interest in doing business in Africa.
A number of chemical products are used to facilitate refinery operations. These include catalysts, process chemicals, performance additives and specialised dyestuffs. CPI Engineering South Africa is one of the key suppliers of these products in South Africa.
The Industrial Development Corporation of South Africa is a self-financing, national development finance institution focusing on contributing to economic growth, industrial development and economic empowerment through its financing activities.
The Corporate Council on Africa an American non-profit, tax-exempt organization dedicated to enhancing trade and investment ties between the United States and the 53 nations of Africa .
Phillips Consulting is a world-class management consulting firm who specialise in assisting foreign companies to do business in Africa.
South Africa boasts a number of smaller consulting firms who offer a wide range of services, from personnel placement to geological surveying. Click through to our SA Consulting Services page to find out more about the excellent, cost-effective services these companies provide.
HBD Venture Capital provides finance for projects involving new technology.
Euromoney Plc is organising the fourth Coaltrans South Africa conference, which will focus on key issues in the South African coal market today. 1st – 2nd March 2004.
Southern African Business Associationindependent association of private sector companies and organisations intent on promoting trade and investment in Southern Africa.
CDC Capital Partners is a leading private equity investor in growing independent businesses in emerging markets worldwide.
Africa Project Access provides specialist consulting services and information regarding projects in Africa. The company publishes a monthly newsletter,Africa Project Newsletter.
The CEF (Pty) Ltd is the South African government’s holding company in the petroleum industry. CEF is mandated by the state to engage in the acquisition, exploitation, generation, manufacture, marketing and distribution of energy from and to engage in research relating to the energy sector.
Energy Africa is an upstream oil company which is active in oil exploration in a number of African countries.
Nutritional Foods is a South African Company, which makes and sells powdered foodstuffs and food ingredients, dry-blended or spraydried.
MBT South Africa import plastics raw materials for the processing industry across the southern African sub-continent. The company is small and focused, and prides itself on its technical knowledge and responsiveness to customer needs.
Wildnet Africa Properties has the finest selection of wildlife and nature-orientated investment opportunities available in Southern Africa. We specialise in game ranches and eco-tourism real estate investments.
The International House Language Lab is one of Africa’s foremost English language schools. Ideally situated in English speaking Johannesburg, the financial, commercial and cultural hub of Africa, the school offers English courses of the highest international standards at affordable prices.
Business Presentation Skills partners their clients to achieve successful business relationships through effective interpersonal communication skills.
