Favoured Destination for Multinationals
The City of Tshwane is a favoured location for multinational companies investing in South Africa. It has been the destination of choice for a majority of investments in the automotive and components sector, with 5 Original Equipment Manufacturers (OEMs) and over 200 Tier 1, 2 and 3 suppliers based in the City. Tshwane is also the manufacturing base for over 90% of the South African aerospace and defence sectors.
The unique combination of a highly developed first-world economic infrastructure and a wide skills pool has given rise to a strong entrepreneurial and dynamic investment environment and has enabled the city to firmly established itself in the African and global economy.
City of Tshwane's
- Road Network
The City of Tshwane has a well-developed road network and is centrally situated on the national road network with direct links to Mozambique, Botswana and Namibia along the east-west N4 route, and with Zimbabwe along the south-north N1 route.
Gautrain is an 80-kilometre commuter rail system in Gauteng, which links City of Tshwane to Johannesburg, Ekurhuleni and O. R. Tambo International Airport. Three passenger stations are located in Tshwane: Centurion, Hatfield and Bosman Station. Plans are underway for expansion of the network to include new routes to Mamelodi in the east of the City.
Metrorail provides an extensive commuter rail service in the City of Tshwane and is accessible from all regions with over 50 commuter stations. The service also provides links to the Shosholoza-Meyl (intercity rail services) from Tshwane to other major cities in the country.
A Re Yeng
A Re Yeng is an inexpensive commuter bus service which consists of 80 kilometres of bus lines with 62 stations running throughout the City. Plans are underway for expansion of the network to include new routes to Mamelodi in the east of the City.
The City of Tshwane has a world class ICT infrastructure utilising both fixed and wireless services. It has the largest deployment of municipal Free Wi-Fi provided by a municipality in Africa and won the World Wi-Fi Day Award for Most Innovative City or Government Program to bridge the Digital Divide at the Wireless Global Congress in 2016.
Transnet Freight Rail, a division of Transnet State Owned Enterprise, provides infrastructure and freight rail services for bulk, container and automotive customers located in the City of Tshwane. The network provides access to major trade ports of Durban, Maputo, Cape Town and Ngqura. Within Tshwane there are various freight and logistics facilities that make it possible for the City to handle container and other cargo for export purposes. Plans are currently underway to invest into two new logistics facilities: Tshwane Freight Logistics Hub (Pyramid South) and Rosslyn Automotive Freight Logistics Hub
The City of Tshwane has over 25 industrial parks suitable for both light and heavy industrial activities. These industrial parks offer combined factory and office floor space of over 7 million square meters and growing relatively competitive rentals.
South Africa has a well-developed legal system with an independent judiciary that ensures protection of individual and investor rights. The country has generally few restrictions on investors and investment in the country. Some of the key factors to consider when investing in Tshwane include:
Company Registration and Administration
The following six principal methods of doing business in South Africa are available to an investor:
• Company (public or private) incorporated under the Companies Act 71 of 2008.
• Personal Liability Company
• Business Trust
• Sole Proprietorship
• External Company (branch of a foreign company)
Investment Protection Legislation
The Protection of Investment Act 22 of 2015 specifically gives foreign investors similar rights and protections available to South Africans. The Act was introduced to reduce the need for foreign arbitration thus reducing the costs of managing and maintaining partnerships between investors and their local partners.
Duty Drawback Scheme
Duty drawback schemes provide refunds for import duties paid on the materials used in the production of goods that are re-exported. Drawbacks are administered by the International Trade Administration Commission (ITAC) of South Africa and the manufacturers may apply for refunds after the final product is exported (www.itac.org.za)
Taxation and Double Taxation Agreements
South Africa has a highly regarded tax system which is resident based. Non residence are taxed on an income sourced from South Africa. The 2019 personal tax rates start at 18% for income higher than R195 850 per annum and the marginal peak rate is 45%. Companies pay a tax rate of 28% on profit r and a further 20% on declared dividends to shareholders. More information on taxation and the tax table are available at www.sars.gov.za.
Land and buildings
There are no restrictions for foreign investors to acquire property in the country. In order for foreign investors to acquire property, they must register as an external company in terms of the Companies Act 71 of 2008.
Exchange Control and Remittance of Funds
Exchange controls on South African residents are enforced by the South African Reserve Bank (SARB). There are no restrictions on foreign investors to acquire companies or businesses in South Africa and additionally, the acquisition of shares or introduction of capital does not require SARB approval. Foreign investors can freely remit dividends and investment capital out of the country after applicable taxation of such.
Employment and labour relations
The main regulations relevant to investors include the following:
• Basic Conditions of Employment Act
• Labour Relations Act
• Skills Development Levies Act
• Skills Development Act
• Employment Equity Act
• Occupational Health and Safety Act
• Compensation for Occupational Injuries
• Unemployment Insurance Act, 2001
Detailed information on the labour regulations can be accessed from www.labour.gov.za
A South African registered company can open a bank account with any financial institution. Foreign residents require a valid residency or work permit to open a bank account. A foreign owned company can raise debt capital in South Africa limited to its effective equivalent capital held locally. Financial services companies need to register with the Financial Sector Conduct Authority (FSCA)
All new development and business activities which impact the environment require Environmental Impact Assessments (EIA) to be completed before commencement. Visit the Department of Environmental Affairs for more information: www.environment.gov.za