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When South African businesses expand into the African continent

By FNB:

When South African companies expand into the rest of Africa, there are numerous operational considerations and many companies forget about the Exchange Control requirements, both South African and relating to the applicable country into which they expand, as well as the investment incentives.

We highlight some of the important requirements and considerations when South African companies expand into the continent.

FDI Approval:
Any South African resident company wishing to expand outside South African borders, excluding Common Monetary Area (CMA) countries (Lesotho, Swaziland and Namibia), requires approval from the South African Reserve Bank to do so. This is called Foreign Direct Investment (FDI) approval. Any investment made by a South African company abroad, excluding into any CMA countries, requires approval either from FirstRand, if it is within our mandate to allow this investment, or from the South African Reserve Bank.

Registering your investment with the local Central Bank:
It is recommended that all investments into other countries be registered with the local Central Bank, as each country has laws governing foreign investments with measures and controls in place to allow for the repatriation of funds back to South Africa. We have found that in some countries, if the investment is not registered from the onset, it could take several years before the funds are allowed to be repatriated back to South Africa.

Registering your investment with the local Development Agency:
Most countries offer tax concessions and investment incentives for foreign direct investments and it is therefore recommended that you register your investment with the Development Agency to establish what incentive you qualify for.

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