Starting a business as a Foreigner in South Africa

Starting a business as a Foreigner in South Africa

Finding your feet in the rainbow nation is a rewarding feat. By overcoming the Department of Home Affairs and being eligible to stand your ground as a permanent resident; you’ll find yourself wanting to make some money of your own. This will require starting your own business, which can prove to be a tricky and often confusing process for many foreigners residing in South Africa.

What are the options?

There are multiple paths one may take to successfully secure their position as a foreign business owner in South Africa. Many potential clients come to us with the idea that they would like to apply for a business visa. However, many potential applicants are not aware of the financial requirements as well as requirements surrounding the types of business that are eligible for this category.

To open a business and apply for a business visa, an applicant must have a minimum of R5 million rand available for investment. Additionally, the business must fall within a set list of categories of business set out by the Department of Trade and Industry (DTI). Once the business is approved by the DTI, you can make application to the Department of Home Affairs for your visa, which will be valid for a period of three years.

An application can also be made for permanent residency on the basis of the business as well.

What if I choose to take the path least travelled?

As mentioned, a Business Visa isn’t always a concrete solution for every prospective business owner. The Independent Financial Permit can be an incredible alternative to the cutthroat and restrictive nature of the Business Visa. While a Business Visa only allows you to work/run particular business, an Independent Financial Permit allows a foreign business owner to run up to as many businesses as the owner desires. This also allows a foreigner to work at a host of companies, allowing for multiple opportunities within their working career.

An Independent Financial Permit is a “must have”, right?

While the perks of an Independent Financial Permit are nothing less than stellar, there are a handful of things to consider before making your final decision. While nowhere near as restrictive, applying for an Independent Financial Permit can prove to be a hurdle for many foreign citizens. The once off payment to DHA of R120 000 and processing time (12+ months) can prove to be exorbitantly high. In addition to this, the net wealth of a citizen will need to be at least R12 000 000.00.

Here are a few important points to consider:

  • While a business Visa doesn’t require a minimum net wealth, there is a mandatory business investment amount of R5 000 000.00.
  • An Independent Financial Permit requires a minimum Net Wealth of R12 000 000.00
  • A business Visa restricts you to one business while the independent financial permit allows the individual to dictate the amount without any restrictions.
  • A Business structure and plan must be submitted upon application of the business Visa. This is not the case for an independent financial permit.
  • The fees associated with the application of a Business Visa are subject to normal DHA fees, whereas the Independent financial permit requires an additional fee of R 120 000.00

How do I know which option is better for my situation?

While it’s quite simple to weigh up all the variables, the advice provided from a knowledgeable immigration Attorney can be an invaluable asset to your application process. June Luna Immigration Attorneys can increase your chance of obtaining citizenship as a foreigner.

In order to start a business as a foreigner in South Africa, your best bet is to enlist the help of JLIA’s comprehensive list of services. Contact us to learn more.