Friday, October 26, 2007

DTI - new regulations for Non-SA people setting up business in SA

Since change of head of DTI (Department of Trade & Industry) two or three months ago, the new director, Mr. Goosen, is no longer willing to accept any applications for reduction of the minimum investment amount of R 2.5 mio which fall below R 500.000. Such application is needed in order to obtain a so-called "Waiver Letter". For foreigners trying to establish a business in SA (South Africa) with less than R 2.5 mio it's still possible to apply for a reduction is certain industries, such as tourismn, automotive, IT etc..
This change in procedure has quite a huge impact on foreign entrepreneurs who intended to start their business with less than 2.5 mio and even less than R 500.000. Various business associations as well as e. g. the major immigration service providers already raised their concerns, but so far without success. Mr. Goosen insists on his new regulation, apart from the fact that it was him/his organization who took away the authority to sign off such "waiver letters" from WESGRO who issued these documents in the past.
More to come on this issue when it's more clear where the journey goes. At the current stage the majority of the immigration service providers recommend to hold back any re-vised/new applications for reduction of the investment amount, provided the amount will be less than R 500.000.