Recently, I had both the good fortune, and challenge, of assisting one of our Clients to set up their operations in South Africa. The Client is a multinational 360 payments solutions provider, essentially creating seamless payment connections between their Clients and their Clients’ customers.
The engagement was exciting for us. We love helping Clients expand globally, and this engagement was part of a truly global expansion plan involving Africa, Asia and South America. It is always interesting and enriching for us to help Clients establish footholds in developing and emerging markets, and South Africa is no exception.
Our remit was thus: establish a South African entity, provide a legal registered address for the business, provide a nominee shareholder and director in South Africa, provide a resident Public Office for the company (this is required by law) and, finally, open two corporate bank accounts.
To incorporate the company, I reserved the company name with the South African Companies and Intellectual Property Commission (CIPC), and then prepared the various incorporation documents for our Client’s signature. The registration application was submitted to the CIPC. Two weeks later, we had company numbers from the CIPC.
The next step was to register the new business with the South African Revenue Service (SARS). This is a necessary step, and one which enables tax returns and declarations to be submitted online. Again, in two weeks we had received a tax registration number from SARS – meaning our Client could now legally recruit local staff in South Africa.
We were then able to move on to corporate bank account opening. We’d been instructed to do this without our Client having to visit South Africa, and we’re proud of our ability to do so at a time when global travel is so restricted, and borders are closed.
We’d reached out to two South African banks which our Client preferred. Fortunately, both banks indicated they would be interested in onboarding our Client’s business. Along with collecting various documents and completing account opening forms, Apurv was able to secure an exemption from one bank to accept e-signed account opening documents. Good job! The other insisted on receiving originals by courier.
Within just one week of the banks receiving the documentation, we had received account numbers for our Client’s business.
So, the key takeaways from this engagement? We certainly expected timeframes to complete the various steps to be longer, particularly against the backdrop of a global pandemic. While company registration in South Africa is straightforward in ‘normal’ times, these are anything but ‘normal’ times – and South Africa has been hit hard by Covid. Nevertheless, we were pleasantly surprised that it is pretty much ‘business as usual’ in Africa’s largest economy.
Our experience with previous South Africa engagements indicates that tax filing can be complex and time consuming, especially corporate income tax filings. We hope, with the new e-filing options offered by SARS, that this process will be streamlined for our Client.
We look forward to working on behalf of our Client to build a successful business for them in South Africa, and also helping them realize their global ambitions!