Industries

The largest industries in South Africa include:

• mining
• manufacturing
• services

The mining industry is particularly prominent, with significant reserves of gold, platinum, and diamonds.

The services sector, which includes finance, real estate, and business services, has the strongest workforce in South Africa.

Investment incentives

For entrepreneurs and companies planning on doing business in South Africa, the following investment incentives are available:

1. Special Economic Zones (SEZs): These zones offer tax incentives, including reduced corporate tax rates and employment tax incentives.

2. Grants and Funding: Various grants are available for industrial development, innovation, and small enterprises, such as the Manufacturing Competitiveness Enhancement Programme (MCEP) and the Black Business Supplier Development Programme (BBSDP).

3. Tax Allowances:  Investment tax allowances and deductions are available for capital investments in certain sectors.

The most common legal form form for doing business in South Africa is the private company (Proprietary Limited, abbreviated as (Pty) Ltd). The incorporation process typically takes 5-10 business days.

A minimum of one shareholder and one director is required for setting up a company.

The official company register can be accessed at Companies and Intellectual Property Commission (CIPC) (http://www.cipc.co.za).

Corporate income tax

The standard corporate income tax rate is 27%.

The tax period typically follows the company’s financial year. The deadline for tax returns is within 12 months from the end of the financial year.

A company is considered tax resident in South Africa if it is incorporated in South Africa or has its place of effective management in the country.

VAT

The standard VAT rate is 15%.

VAT registration

Both resident and non-resident companies doing business in South Africa must register for VAT if their taxable supplies exceed ZAR 1 million in a 12-month period.

Other taxes

Other applicable taxes include capital gains tax, dividends tax, and transfer duty on property transactions.

Entitlement to work

All individuals with valid work permits or permanent residency are entitled to work in South Africa.

Employment contracts

Types of employment contracts include permanent, fixed-term, and temporary contracts

Personal income tax rates in South Africa range from 18% to 45%, depending on income levels.

The tax period is the fiscal year, running from March 1 to February 28/29.

The due date for individual tax returns is usually around the end of November for non-provisional taxpayers and end of January for provisional taxpayers.

 An individual is considered a tax resident if they are ordinarily resident in South Africa or meet the physical presence test.

Taxable income includes salaries, wages, bonuses, rental income, and investment income.

Employers contribute 1% to the Unemployment Insurance Fund (UIF), and employees also contribute 1%. There is no mandatory health insurance; however, many employers offer medical aid as a benefit.