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TRADE AND INVESTMENT OPPORTUNITIES IN SOUTH AFRICA

Entry of foreigners

The country’s sustained economic growth is encouraged by foreign investment, employing needed foreign labour, enabling the entry of skilled and exceptionally skilled people, and facilitating academic exchanges within the Southern African Development Community (SADC) region. To achieve this, a new system of immigration control has been put in place that will ensure that temporary and permanent residence permits are issued as expeditiously as possible. Under the Immigration Amendment Act, No. 19 of 2004, and the new Immigration Regulations, both of which came into effect by proclamation on 1 July 2005, immigration procedures have been simplified, making the requirements for entry and residence objective, predictable and reasonable. South Africa’s immigration legislation and regulations are very much in line with international principles of immigration. The applicable legislation is the Immigration Act, No. 13 of 2002, which came into operation on 7 April 2003, together with the relevant regulations, both of which have been amended from time to time.

Work permits are generally skills-driven. They remain a major tool for bridging general skills shortages and shortages where the South African government has identified national critical skills. The process for importing those skills is being expedited at present. One of the underlying principles of this type of immigration system is that of supply and demand. A prospective employer must attempt to employ a South African citizen or resident first. The position should be advertised in the national printed media. If a suitable candidate cannot be found, the position can be offered to a foreign national.

An innovative work permit, called the Quota Work Permit, has been designed to facilitate the employment of highly skilled foreign nationals. The Minister of Home Affairs, in consultation with the Ministries of Labour and Education, publishes a national critical skills list on an annual basis. This list defines specific professional categories and skills sets and couples them to a numerical quota. If an individual falls into one of the categories, then a prospective employer would not have to advertise the position. Persons who have unique skills with high qualifications may also qualify under the Exceptional Skills Work Permit category. In this category, an individual would have to prove not only the nature of his or her exceptional skills, but also how the skills would be to the advantage of the South African economy. Testimonials and publications by the incumbent can also be used to support the application for this type of work permit.

The General Work Permit category remains available to all other types of applicants. Advertisements in the national printed media form an integral part of this type of application as one element of proof of the efforts made by the prospective employer to secure the services of a South African citizen or resident. A very important category of work permit is that of the Intra-Company Transfer Work Permit, which enables multinational companies to transfer senior or key members of personnel, posted elsewhere, to their South African offices for a limited period. Currently such deployments are limited to three years.

Investing in South Africa in terms of the Immigration Act is subject to qualification for a Business Permit. This category of permit was previously known more appropriately as the ‘own business/self-employment’ permit, which was more descriptive. To qualify for this category, one would have to either start up a new business in South Africa or purchase an existing business or part thereof. In either instance, an applicant would have to demonstrate that a feasibility and viability study has been undertaken, which would have to be proven in the form of a substantive business plan.
Further elements to be shown in order to qualify for a business permit are the following:
• Adequacy of capitalisation, currently R2.5m;
• An undertaking to employ at least five South African citizens or residents in the business or intended business; and
• An undertaking to register with the South African Revenue Service (SARS).

Trade and Investment South Africa (TISA), a division of the Department of Trade and Industry (the dti), makes recommendations to the Department of Home Affairs for certain key industries, as well as for investments under R2.5m. These recommendations are formulated in conjunction with the various provincial investment promotion agencies. TISA provides a comprehensive facilitation service for investors who have to comply with the various elements of the Immigration Act. Alternatively, investors may also approach specialist immigration attorneys and practitioners.

The country’s sustained economic growth is encouraged by foreign investment, employing needed foreign labour, enabling the entry of skilled and exceptionally skilled people, and facilitating academic exchanges within the Southern African Development Community (SADC) region. To achieve this, a new system of immigration control has been put in place that will ensure that temporary and permanent residence permits are issued as expeditiously as possible. Under the Immigration Amendment Act, No. 19 of 2004, and the new Immigration Regulations, both of which came into effect by proclamation on 1 July 2005, immigration procedures have been simplified, making the requirements for entry and residence objective, predictable and reasonable. South Africa’s immigration legislation and regulations are very much in line with international principles of immigration. The applicable legislation is the Immigration Act, No. 13 of 2002, which came into operation on 7 April 2003, together with the relevant regulations, both of which have been amended from time to time.

Work permits are generally skills-driven. They remain a major tool for bridging general skills shortages and shortages where the South African government has identified national critical skills. The process for importing those skills is being expedited at present. One of the underlying principles of this type of immigration system is that of supply and demand. A prospective employer must attempt to employ a South African citizen or resident first. The position should be advertised in the national printed media. If a suitable candidate cannot be found, the position can be offered to a foreign national.

An innovative work permit, called the Quota Work Permit, has been designed to facilitate the employment of highly skilled foreign nationals. The Minister of Home Affairs, in consultation with the Ministries of Labour and Education, publishes a national critical skills list on an annual basis. This list defines specific professional categories and skills sets and couples them to a numerical quota. If an individual falls into one of the categories, then a prospective employer would not have to advertise the position. Persons who have unique skills with high qualifications may also qualify under the Exceptional Skills Work Permit category. In this category, an individual would have to prove not only the nature of his or her exceptional skills, but also how the skills would be to the advantage of the South African economy. Testimonials and publications by the incumbent can also be used to support the application for this type of work permit.

The General Work Permit category remains available to all other types of applicants. Advertisements in the national printed media form an integral part of this type of application as one element of proof of the efforts made by the prospective employer to secure the services of a South African citizen or resident. A very important category of work permit is that of the Intra-Company Transfer Work Permit, which enables multinational companies to transfer senior or key members of personnel, posted elsewhere, to their South African offices for a limited period. Currently such deployments are limited to three years.

Investing in South Africa in terms of the Immigration Act is subject to qualification for a Business Permit. This category of permit was previously known more appropriately as the ‘own business/self-employment’ permit, which was more descriptive. To qualify for this category, one would have to either start up a new business in South Africa or purchase an existing business or part thereof. In either instance, an applicant would have to demonstrate that a feasibility and viability study has been undertaken, which would have to be proven in the form of a substantive business plan.
Further elements to be shown in order to qualify for a business permit are the following:
• Adequacy of capitalisation, currently R2.5m;
• An undertaking to employ at least five South African citizens or residents in the business or intended business; and
• An undertaking to register with the South African Revenue Service (SARS).

Trade and Investment South Africa (TISA), a division of the Department of Trade and Industry (the dti), makes recommendations to the Department of Home Affairs for certain key industries, as well as for investments under R2.5m. These recommendations are formulated in conjunction with the various provincial investment promotion agencies. TISA provides a comprehensive facilitation service for investors who have to comply with the various elements of the Immigration Act. Alternatively, investors may also approach specialist immigration attorneys and practitioners.

 
 
 
Ms. TSD Nxumalo Consul-General
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