South Africa’s economy has shown promising signs of rapid growth throughout the first part of 2018. All those who run a business in South Africa are feeling optimistic about the future of the area.
These numbers are also good news for those seeking work in South Africa. Currently, the unemployment rate in the region sits around 26.7%. Hopefully, that figure will go down significantly before the year is over.
But what if you’re someone who is new to South Africa? What if you’re a person who is just trying to start a business there? Should these factors deter you from doing so?
No, they should not. However, people should be fully aware of the economic state and culture of South Africa before doing business there. Plus, some other major challenges may impact establishing your company.
Read on to learn the top four business challenges one can face in South Africa.
Dealing with Construction Permits
The main challenge with construction permits in South Africa isn’t paperwork, government employees, or price. In fact, the cost of getting the right construction permits is very cheap.
The real issue with construction permits is the length of the process. The 13 procedures can take up to 127 days.
Electricity is a vital resource for all businesses, especially if your company is a part of the tech industry. However, obtaining electricity for your business in South Africa can be a long, arduous process.
It typically takes 226 days in total for a business to get electricity in South Africa.
Eskom, which generates 95% of the electricity in South Africa, can take up to two months to give you an estimate after they have received your application.
Also, it can take up to another 165 days after that for Eskom to finish all external connection works.
Registering Your Property
Registering a property for your business isn’t a complicated process on its own. Typically, the six procedures you need to finish can be done within a total of 23 days.
However, the quickness of this step relies on the efficiency of the local South African government.
You must get a rates clearance certificate from a local authority. Then you need to have the conveyance submit the deed at the Deeds Registry. These individuals can either make the whole process painless or excruciating.
Paying business taxes in South Africa can take up to 200 hours of your time every year and must be divided into nine payments. Compare that to the average American, who spends four to 10 hours a year on his or her taxes.
The taxes in South Africa that take the longest to file are the unemployment insurance contributions, better known as UIC, and corporate income tax.
Going Forward With Your Business in South Africa
There’s no denying that there are real challenges to doing business in South Africa. However, none of them are deal-breakers.
Familiarize yourself with the region’s culture. Educate yourself on the paperwork and procedures you will need to complete. But most of all, be patient.
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