Launching a Business in South Africa
It does not matter what type of business you want to start, this guide will help you to know the minimum registrations and obligations of EVERY business!
- STEP 1 – Registering your Entity
Doing business in South Africa was simplified with the Companies Act of 2008. There are now just two categories of companies, For Profit Companies and Not for Profit companies. If your venture is to make a profit, then you just need to start a Private Company.
A private company is a legal entity which is a separate entity to the owner or owners. This is a very popular option, as It protects an owner’s personal property should things go a bit south. You can do the registration by yourself on cipc.co.za. Or you can register your business with us.
Some customers do not like doing business with recently registered companies as it gives the impression that it is a new company that can not be trusted, to avoid this, you could buy a shelf company. A shelf company is just a company that was registered but never traded. So you can buy a company registered in 2020 and your customers will assume you have been in business since then which just gives a little comfort. To see what shelf companies we have, click here
Once your company is registered, you will need to make sure you keep your company compliant. Companies, depending on your size and turnover, have to pay the following annually – CIPC annual fees, SARS Tax Returns and Department of Labour returns.
- STEP 2: Understand your Tax Obligations
Income Tax
ALL companies are automatically registered for Income Tax when the company is registered. Income Tax must be paid annually!
PAYE
As soon as you employee your first employee, then you should register as an employer with the Department of Labour. If that employee earns more than R6000 per month, then you must register for Pay as You Earn tax. When you register for PAYE, you are automatically registered as an employer with the Department of Labour so there is no need to register at Department of Labour if you are registered for PAYE. But if all your employees earn below R6000 then you do need to register directly with Department of Labour
- STEP 3: Understanding your Obligations as an Employer
If you are going to employ Staff, you need to ensure that you are registered as an employer and have the following registrations:
Compensation for Occupational Injuries and Diseases Act 130 of 1993, for their health and safety rights while they are working;
Unemployment Insurance Fund (UIF), which covers your staff during long term illness, maternity leave and more
Skills Development Levy (SDL), when you expect your payroll will exceed R500 000 annually.
Pay As You Earn (PAYE), if your employee earns over R40 000 annually.
- STEP 4 : Company Policies
To run your business effectively, you need at least the following policies:
- HR Policy
- Finance Policy
- IT Policy
We assist startups to put the necessary systems and processes to ensure that your company has steps to prevent theft, and to protect you from potential legal action from staff.
For assistance with company policies, click here
If you need assistance with setting up your new business, contact us below and we will call you!
