South Africa

Why trade or invest in South Africa?

South Africa is one of the most sophisticated emerging markets, with its ideal geographical location and its first world infrastructure and financial institutions it is an ideal location for future investment.  Due to the strategic geographical location of South Africa, investors are not limited to only pursue their business ventures within the borders of South Africa, but can use South Africa as a gateway to the rest of Africa.

South Africa also has a host of investment incentives available for investors.  South Africa has a huge mining industry and produces 14% of the world’s gold. The diamond sector of South Africa is the third largest in the world by value.  South Africa is also one of the leading producers of base metals and coal.  The agricultural and manufacturing sector is also well developed.

Your investment will also be safeguarded by an efficient legal that you can certainly use to your advantage if you seek the legal guidance.    

Some particularities of the South African law and the South African legal system you should know

As with every country foreign to your own it is important to familiarize yourself with the particularities of the country that you want to invest in.

One of the most important aspects that you will be faced with is Black Economic Empowerment. While you will never be obliged by law to participate in BEE, you will find that your business partners will be hesitant to do business with you if you do not make an effort to apply the principles of BEE.  Contracts in South Africa are also usually lengthier than their European counterparts. This is due to the fact that the law of contract is not codified as it is in civil law countries. Therefore the parties are to a large extent free to determine their own contractual terms which needs to be defined clearly in your contract.  That being said, it is not always easy to make payments from a South African account into a foreign account. In most cases these payments will be subject to the approval of the Reserve Bank who are responsible to for the enforcement of the exchange control policy.  This can in effect limit your contractual freedom. A clause that indicate that you, as a foreign patent holder, will be entitled to more than 4 or 6 % in royalties if the product is manufactured in South Africa will not allowed.

The royalty that you have agreed upon will have to be approved by the Department of Trade and Industry before the payment will be allowed to be transferred out of the country.

A-Law International law firm South Africa

We have been assisting a wide range of clients with their business in South Africa ranging from the establishment of Bed and Breakfasts and Restaurants in South Africa to assisting a bank in establishing a branch in South Africa.  We have also assisted an IT provider in their Joint Venture with a South African governmental institution – in this matter BEE was of the utmost importance.  We have incorporated several companies in South Africa and have assisted in obtaining several business permits for our client.

South African companies investing in Belgium and Europe or contracting with Belgian and European counterparts are part of A-Law international portfolio. 

Due to the strict procedure that has to be followed by employers in South Africa when terminating an employment agreement, we have assisted several clients who mistakenly thought that the Belgian principles of employment will also be applicable in South Africa. While it is not difficult to terminate a South African employment agreement it is essential to follow the correct procedure in doing so. 

South African companies in a wide variety of sectors (food, logistics, It) investing in Belgium and Europe or contracting with Belgian and European counterparts have appealed upon the key expertise of our central contactperson for South Africa related legal matters, attorney-at-law Marisa Scheepers.