If you were going to start a business abroad in the current climate, South Africa would arguably not be your first port of call. After all, the country has been mired in an economic slump for several years now, whilst there are significant cultural differences between South Africa and the UK.
However, South Africa may be over the worst of its economic dip, with growth predicted in 2021/22 after another technical recession this year. This region is also home to a number of high growth opportunities, and it may provide a unique opportunity to target a vast and untapped market with your business.
In this post, we’ll explore these opportunities further, whilst asking what considerations can help you to crack the South African business market.
- Identify the Opportunities in SA
Whether you’re starting a business from scratch or looking to replicate your domestic success overseas, you need to consider the South African market to determine whether or not there’s a demand for your product or service.
By identifying the opportunities that exist in South Africa, you can make an informed decision about your businesses growth whilst appraising your likely competition.
Off-grid solar certainly represents a big opportunity in the region, with Africa providing a clean and open slate for all renewable energy sources (and most notably solar). With policymakers in Europe and North America currently debating and refining their energy strategies, there’s clearly an opportunity for African providers to steal a march on their global rivals.
Fashion and apparel also provide plenty of potential for UK entrepreneurs in Africa, whilst the virtual and specialist education sectors in the region also represent significant growth markets.
- Choose the Right Type of Visa
Typically, entrepreneurs who want to launch a venture in South Africa will apply for a business visa, which enables them to relocate overseas and set up their operation.
Whilst this is a perfectly effective and legally-binding visa, however, there is another effective and largely underused option that’s worthy of consideration.
This is the so-called Independent Financial Permit, which enables the holder to launch his international business but also includes a number of alternative benefits over a standard business visa.
More specifically, this permit is not restricted to a specific economic activity, meaning that you’ll retain the freedom to start your own venture or invest in an existing commercial entity. At the same time, there’s no obligation to do either, so this offers tremendous flexibility when heading out to visit the region.
- National Employment Laws
When owning and operating a business in South African, it’s important to adhere to the national employment laws that shape the labour market.
One of the most important is the legal requirement to ensure that at least 60% of your workforce is South African, whether they’re citizens or permanent residency holders.
These individuals must also be employed on a permanent basis within the company if you hold a business visa, however this rule does not apply if you take out an Independent Financial permit.
To help you comply with these local laws and similar legislation surrounding taxation, we’d recommend that you partner with a global consultancy brand such as RSM. This way, you can launch your business from a solid foundation and avoid potentially costly compliance issues in the future.