Private and public companies are incorporated entities under South African law. A private company is the most common type of business for foreign investors.
Company Registration Process
Reservation of Company Name
Under the new Act, name reservation is no longer mandatory before registering a company. Under the Companies Act, 2008, a company may be registered with or without a company name.
When a company is registered without a reserved name, its registration number automatically becomes the company name. This is the quickest way to register a company.
Thus this step is optional but still recommended. This process has a proposed name verified, approved and reserved. This procedure involves checks to ensure that the proposed name does not already appear on the names register.
Agency: Companies and Intellectual Property Commission (CIPC)
Time: 7 days (note can be done at same time as second step)
Cost: ZAR 50
Registration of Company (File Articles of Incorporation)
The company must be registered with the South African Registrar of Companies through the Companies and Intellectual Property Commission (CIPC) within 21 days of the company being started. A company is incorporated by the lodging of a Notice of Incorporation (CoR 14.1) and Memorandum of Incorporation (CoR 15.1 A-E) and possibly other supporting documentation depending on the company. These forms are available for download from the CIPC’s website.
Memorandum of Incorporation: The Memorandum of Incorporation (MOI) generally should contain the following information:
- Details of incorporators
- Number of directors or alternate directors
- Share capital (maximum issued)
Notice of Incorporation: The Notice of Incorporation, which is lodged with the MOI, generally should contain the following information:
- Type of company
- Incorporation date
- Financial year-end
- Registered address (main office)
- Number of directors
- Company name
- Whether the company name will be the registration number
- The reserved name and reservation number
- List of four names to be checked by the Commission
The CIPC’s website allows business owners to register their companies online. Once you are registered as a CIPC customer you will be able to access the transactional website. After you have logged in, look for the ‘New Companies’ link under the ‘Companies’ tab.
Agency: Companies and Intellectual Property Commission (CIPC)
Time: 3-6 days
Cost: ZAR 125
Note: drafting and preparing legally valid articles of incorporation will require additional time and legal fees.
Open a Bank Account
A company can obtain a business account. There would be no currency restrictions in terms of ZAR deposits into this account, as the company is viewed as a legal identity in its own right and would be incorporated in South Africa.
When opening an account for in South Africa you will generally be required to provide the following documentation:
- Founding statement and certificate of Incorporation (Form CK1) and an Amended Founding Statement (CK2), if applicable
- One of the following documents reflecting the trade name and physical business address:
- An original company letterhead
- Electricity or water bill
- A bank statement (from another financial institution)
- Lease or rental agreement
- Telkom account
- SARS tax return statement
In addition you will be asked to provide information in respect of your source of income and the type of activities that can be expected on the account.
All members, authorized signatories and/or any other person who may act on behalf of the closed corporation must provide the same information and documentation as stated above, as well as written confirmation that they are authorized to act on behalf of the CC.
Agency: Commercial Banks
Time: 1 day
Cost: None
Registration for VAT and other Taxes
All businesses must be registered for income tax.
Only if your company turnover will exceed ZAR 1 million per year then you have to register for VAT, less than this you can register voluntarily.
Any business who employs at least one employee must register with the South African Revenue Service (SARS) for Pay As You Earn (PAYE) and Standard Income Tax on Employees (SITE).
There may be additional taxes. Furthermore the requirements for determining which taxes you need to register for, and the process for registering can be complex.
Registration for these can generally be done online.
Agency: South African Revenue Service (SARS)
Time: 12 days
Cost: None
Registration of Unemployment Insurance with the Department of Labour
Businesses employing staff will have to contact the Department of Labour regarding mandatory contributions to the Unemployment Insurance Fund (UIF).
Agency: Department of Labour
Time: 4 days (can be combined with previous step)
Cost: None
Register for Occupational Injuries and Diseases Compensation
Businesses employing staff will also need to contact the Department of Labour regarding the Occupational Injuries and Diseases Act.
Agency: Department of Labour
Time: 10 days (can be combined with previous steps)
Cost: None
Registration with the District Council
Businesses employing staff must pay a gross revenue or salary related levy to the district council.
With the exception of specialized enterprises, such as liquor stores and arms dealers, businesses no longer need a license to trade in South Africa. They are, however, required to register with the Regional Services Council (RSC) in the area in which they operate.
Once registered, the business is charged services levies based on its total bill for salaries and wages, as well as on gross sales. Returns and payments must be lodged on a monthly or annual basis as determined by the RSC. The rate of the levy varies from region to region and, in the case of the regional services levy, is required to be paid to the Regional Services Council in the region in which the employees render the services to the employer.
To register with your local RSC:
- Complete and submit Form RSC1 at the offices of your local Regional Service Council. These vary from council to council, so can’t be made available for download online
- You will receive confirmation of registration within approximately one month on a Form RSC2. This form will contain a reference number which should be quoted in all dealings with the RSC
- Subject to prescribed payment terms, the RSC will send you a services account on Form RSC4 either monthly or annually
While our research found many sources talking about this step and registration requirement, there was no information available about the registration cost and processing time. This is presumably because the process will depend entirely on the local district council.
Agency: Regional Services Council (SRC)
Time: 1 day
Cost: No registration fee