36 minute read
Special features
Regional overview of the Free State
Logistics and renewable energy are vital sectors in the Free State economy.
By John Young
When the leaders of what would become the African National Congress chose a venue for their first-ever conference, Bloemfontein was the natural choice because of the centrality of the town. The city, which has been the judicial capital of South Africa since the creation of the state in 1910, has continued to leverage its central location to become a significant factor in the transport and logistics sector.
The country’s two great highways pass through the province. The N1 provides north-south connectivity and the N3 is South Africa’s busiest road, linking the ports of Richards Bay and Durban with the industrial heartland.
This strategic position lies behind the decision to launch the MalutiA-Phofung Special Economic Zone on the N3 at Harrismith. Although agriculture and mining remain the mainstays of the provincial economy, diversification and expansion through initiatives such as Special Economic Zones (SEZs) are key to the economic future of the province.
Sectors prioritised at the MAP-SEZ include logistics, ICT, automotive, pharmaceuticals, manufacturing and agri-processing. The 1 000ha site will has four zones: agri-processing, light industrial, heavy industrials and a container terminal.
Links to the west (Kimberley and on to Namibia) and east (to Lesotho) underpin the planning behind the N8 Corridor concept which covers Bloemfontein, Botshabelo and Thaba Nchu. A plan for the coordinated development of the N8 Corridor has been approved by a range of bodies and is being funded by the Development Bank of Southern Africa (DBSA) and the Mangaung Metropolitan Municipality.
Within this are several projects including the ICC Precinct (hotel and convention centre in Bloemfontein), Bio-Medical Park, Airport Node (logistics and supply chain, warehouses, residential apartments, hospitals, schools, hotels and new shopping malls) and tourism infrastructure for the Naval Hill Development.
Three other national highways intersect the province which is also well served by rail and air links. The Bram Fischer International Airport serves the provincial capital city of Bloemfontein.
Another important new sector is solar energy. The Xhariep, Lejweleputswa and Mangaung regions have among the best direct solar radiation kWh/m² in the country. Only Upington in the Northern Cape has a better solarradiation index. Rezoning for solar farms has already taken place in several places.
New opportunities are opening up in the gas and energy sectors. Several new licences to explore have been granted and a R200million helium extraction plant is under construction near Virginia.
Relations have been established with 35 countries with a view to promoting exports. Africa and the BRICS grouping of Brazil, Russia, India and China are focus areas. Other partnerships based on education and trade include
countries and regions like Portugal, Turkey and Madeira.
An important pillar of the economy of the Free State, the chemicals and fuels hub at Sasolburg, is modernising and expanding. International fuel, gas and chemicals company Sasol regularly invests in new technologies and in expanding production of its various products.
The Free State shares borders with six other provinces, in addition to the Mountain Kingdom of Lesotho. A summer-rainfall region with a mean annual rainfall of 532mm, the Free State’s climate, soil types and topography vary greatly within the province, with plains in the west and mountains in the east. The western and southern areas are semi-desert, with some Karoo vegetation occurring in the south.
The Free State produces significant proportions of South Africa’s wheat (30%), sunflowers (45%) and maize (45%) and is ranked third in contribution to national GDP in agriculture. Municipalities in Free State
The Free State has one metropolitan municipality (Mangaung), four district municipalities and 19 local municipalities.
Mangaung Metropolitan Municipality Mangaung Metropolitan Municipality is a Category A municipality which governs Bloemfontein, Botshabelo and Thaba Nchu. The sixth-largest city in the country, the Mangaung municipal area covers more than 6 263km² and has a population of about 850 000 people. Bloemfontein is responsible for about 25% of provincial GDP.
Xhariep District Municipality Towns: Trompsberg, Koffiefontein, Zastron, Philipollis, Edenburg, Fauresmith, Smithfield, Wepener The southernmost region of the Free State is a largely dry area with open grasslands predominating, although it is also home to the Gariep Dam, South Africa’s largest dam. Crops are produced in the northern parts of the district and sheep farming is the biggest activity in the south. Trompsberg has the second-biggest sheep-shearing barn in the country.
Diamonds, gravel and clay are mined at Koffiefontein. Jagersfontein is one of the first places where diamonds were found, and it has its own version of the Big Hole to prove it. The town of Bethulie is a good stopping-over place for tourists wanting to experience the water sports available on the Gariep Dam.
The dam is also the site of small hydro-power and aquaculture projects which are intended to create employment and tackle food security. The nearby Tussen die Riviere Nature Reserve and the Mynhardt Game Reserve have a variety of wildlife in spectacular settings. Jacobsdal’s
Landzicht winery has proved itself as a worthy producer of wine. San rock paintings and Anglo-Boer War sites are plentiful.
Lejweleputswa District Municipality Towns: Welkom, Virginia, Boshof, Christiana, Bultfontein, Bothaville Mining is the most important economic activity in this area, also known as the Free State Goldfields, but it is also the most important maizegrowing area in South Africa. A large natural gas field has been discovered on what used to be gold turf. Bothaville is the self-proclaimed Mielie Capital of South Africa but it is a name that is apt. The town hosts the annual NAMPO maize festival and the headquarters of Grain SA.
Mining town Welkom is the major urban centre in the district. The town of Virginia is the site of a jewellery school and it is intended that this will form the nucleus of a jewellery beneficiation hub and an IT hub.
The area has tourist assets such as a holiday resort on the Allemanskraal Dam, the Goldfields Wine Cellar in Theunissen and the Willem Pretorius Game Reserve but there is potential for growth in the heritage sector.
Fezile Dabi District Municipality Towns: Sasolburg, Parys, Kroonstad, Frankfort, Heilbron, Viljoenskroon The chemical complex at Sasolburg is the economic driver in the district, which shares a border with Gauteng province along the Vaal River. The town of Heilbron is another important industrial centre and Frankfort does important agricultural processing work. Kroonstad is the district’s second-largest town and has a number of engineering works and a railway junction. A new kraft paper factory has been planned for Frankfort.
A good proportion of South Africa’s grain crop is sourced from this district and when the vast fields of sunflowers and cosmos flowers are in bloom, a marvellous vista is created. The Vaal River presents opportunities for yachting, rafting and resort-based enterprises. Parys is a charming town and Vredefort is home to a World Heritage Site, the Vredefort Dome where a meteor crashed to earth.
Fezile Dabi District Municipality is the biggest contributor towards the provincial GDP, contributing approximately 35%. The Fezile Dabi area is mostly dominated by the industrial power of Sasol, with the manufacturing of refined petroleum, coke and chemical products adding largely to its GDP.
Thabo Mofutsanyana District Municipality Towns: Tweespruit, Ladybrand, Clarens, Harrismith, Vrede, Ficksburg, Phuthaditjhaba, Bethlehem Tourism and fruit farming are the two principal economic activities of this area which is characterised by beautiful landscapes: the Maluti and the Drakensberg mountain ranges, wetlands in the north, well-watered river valleys and the plains of the north and west. The most famous asset is the Golden Gate National Park.
Industrial activity is undertaken at Harrismith and Phuthaditjhaba, where the Free State Development Corporation is promoting investment. The Maluti-A-Phofung Special Economic Zone (SEZ) at Harrismith is a multi-modal transport and logistics hub.
The commercial centre of the district is Bethlehem while Clarens and Ficksburg have become famous for their artists and cherries respectively. Marquard produces 90% of South Africa’s cherries. The north of the district has many sunflower seed farms. Tweespruit is sunflower seed production centre.
The Phakisa Freeway is a popular motor and bike racing track near Welkom in the Lejweleputswa District.
FDC empowers youth
Job creation scheme is a multi-agency effort.
In its efforts to empower youth, the Free State Development Corporation (FDC) is participating in job creation for unemployed individuals in the province. The FDC has signed a funding agreement with the Unemployment Insurance Fund (UIF) under the Labour Activation Programme (LAP) as an implementing agency.
The LAP is an initiative by the UIF to provide work experience, training and skills opportunities to former contributors to the UIF who have lost their jobs, and unemployed youth. This is carried out under the Training and Skills Development Business Unit. The UIF is an agency of the Department of Labour.
The unit intends to prioritise employment, skills and re-skilling of unemployed individuals, combating long-term unemployment and poverty alleviation in the province. “The implementation of the programme will cultivate an entrepreneurial culture and train participants to increase their chances of acquiring employment and starting their own business,” says Thabiso Tshabalala, FDC Project Manager.
The programme targeted 1 500 learners who come from various communities around the Free State. The beneficiaries, both male and female, have already completed their theoretical and practical experience in building and civil construction (paving), welding and mixed farming. A total of 819 women completed this training.
Positive feedback received from learners indicates that the programme is on the right path. This will create an economy that will result in employment opportunities for women, youth and many currently unemployed South Africans who should be productive participants in the economy.
OVERVIEW FOCUS FDC offers affordable rental rates for businesses
The property management and development unit of the FDC has a diverse property portfolio.
The Free State Development Corporation oversees and administers a diverse and substantial portfolio. If you are a small, medium, micro enterprise or a labourintensive company in search of suitable industrial and commercial premises, look no further. FDC’s Property Management Unit offers rental space for your small to medium enterprise at affordable rates through its diverse and substantial property portfolio. Over the years the unit has provided business premises to the general public, business people and government departments who want to initiate projects. The unit has also been instrumental in providing warehousing, manufacturing space, offices and space in various shopping centres across the province.
Offering you quality services
Overseeing a total of 253 commercial and 290 industrial properties, FDC uses this infrastructure to: • Facilitate commercial and industrial activity • Assist new investors who may be looking for suitable premises • Facilitate SMME development, particularly in rural areas.
Our spread
The substantial property portfolio makes FDC one of the biggest property owners in the province with industrial, residential and commercial properties in excess of 900 000m² situated in the Mangaung Metro and Thabo Mafutsanyana District.
Our industrial properties are located in: • Thaba Nchu • Botshabelo • Industriqwa, Harrismith • Phuthaditjhaba.
Our cost structures
FDC’s property rates of leasing are competitive and compare favourably with similar industrial and commercial properties elsewhere in the country. FDC’s industrial property rates currently range from R9.08 to R16.09 per square metre for factory space, depending on the features of the property, and from R30 to R96 per square metre for commercial premises and are adjusted from time to time in line with prevailing economic conditions.
Incentives
Incentives may be granted in the form of rental holidays, reduced rental rates and discounts on utilities for investments contributing to job creation on a large scale.
Black Economic Empowerment
Concessions which may be granted to businesses with more than 50% black ownerships include the following: • A discount of 10% on normal rental rates • An additional discount of 2% for womenowned businesses, where women have more than 50% shareholding in the business • An additional discount of 2% for youth-owned entities where more than 50% of shareholding in the business belongs to individuals below the age of 35 • An additional discount of 2% for businesses where disabled persons hold 25% shareholding or more.
These concessions do not apply in instances of lease renewals or existing leases.
Three easy steps to occupying your new premises
Once FDC has identified a suitable site for your business, you will have to confirm your interest in the site in writing with the corporation.
Within a week of receiving the confirmation and all legal documentation, premises will be allocated based on the availability and the specific requirements of the prospective tenant. You will sign the agreement and pay the initial costs which include the following: deposits; admin and legal fees; two month’s rental in advance.
You will be able to occupy the premises after FDC has prepared the building according to the agreed requirements.
Contact details
For more information regarding factory space to rent please contact us: Tel: +27 51 4000 800 • Email: wecare@fdc.co.za The FDC has offices in Harrismith (top), Thaba Nchu (middle) and Phuthaditjhaba (bottom).
Phuthaditjhaba Industrial Park
Phuthaditjhaba IP is strategically located in the Eastern Free State and 40km away from the N5 and N3 highways. The park is on the border between the Gauteng and Kwazulu-Natal provinces.
The Park is situated within the Thabo Mofutsanyana District Municipality in the Maluti-A-Phofung Local Municipality. It is owned and managed by the Free State Development Corporation (FDC), which is the official agency responsible for driving economic development in the Free State Province.
The Park is divided into Industrial estates ie factory units, which are further divided into small and large units. Small units range from 50m² to 499m² while the large units are 500m² and above in size. These factories are mainly rented for manufacturing and service industries and to a lesser extent retail (wholesaling) and warehousing (storage). There are a total of 296 factories in the Phuthaditjhaba Industrial Park.
The Industrial Park occupies a total of 257 360m² gross land area, with approximately 62% occupancy rate and 185 companies. It has one of the biggest local employers in the CMT sector, employing 1 200 local people, who comprise more than 90% women. The Park is a major economic hub of the district, with varied businesses located in the park.
The municipality provides services such as water and electricity, and the infrastructure is owned by the municipality. There is more than 120 000m2 of vacant land and 112 vacant factories (large and small). Sectors include textiles, plastic products, manufacturing, construction, food and snacks. The total number of jobs is estimated at 7 300.
Botshabelo Industrial Park
The Botshabelo Industrial Park is situated approximately 60km from the economic hub on the eastern side of the Mangaung Metro. The industrial area was developed in 1985 with the assistance of DBSA.
The Botshabelo Industrial Park boasts manufacturing and service companies in the textiles, electrical, plastic production, poultry, food and snack sectors. Currently it provides employment to an estimated 7 519 people, of which the majority are women. Mangaung and Maluti-A-Phofung form part of the distressed regions and were declared as one of the Presidential nodal areas that require development.
The BIP was the first to receive phase 1 and phase 2 of the revitalisation programme. The initiation of the revitalisation programme has had some impact and has seen an increase in investment within the park. The Industrial Park has 144 factories operating with 113 occupied. The total capital investment is around R755-million.
The factory sizes range from 500m² to 2 500m². The Park also has an incubator centre known as the Small Business Park.
Office and industrial space available
Free State Development Corporation (FDC) offers a wide range of spacious and affordable rental space for SMMEs.
There are opportunities to rent factory space at Free State Development Corporation properties in Botshabelo, Phuthaditjhaba and Industriqwa.
The FDC offers affordable rental space, ranging from massive stand-alone industrial buildings, office blocks and shopping centres, to loose single-tenant commercial buildings situated in rural areas to suit different needs.
Industrial portfolio
Industrial building: Mainly stand-alone industrialtype buildings designed for manufacturing and/or warehouse purposes. Large factories (>500m²): Consists of mainly standard and custom-built factories used for manufacturing, service industries and warehousing. Small industrial units (<300m²): Standard units in small industrial parks and incubators designed for incubation of start-up manufacturing and/or serviceindustry activities. Warehouses: Buildings occupied by businesses servicing the broader economic base that is utilised for storage and distribution. Factory shops: Manufacturing entities utilising industrial space to sell own products to the general public. Wholesalers/retailers: Community projects in the manufacturing and service sectors, serving the broader economic base, targeting ownership in historically disadvantaged communities. Ownership and control must be widely based in such communities rather than by an individual member of such communities. Vacant land: Serviced or unserviced land zoned for commercial and industrial use.
Commercial portfolio
This portfolio is divided into urban and rural areas and typically consists of the following: shopping centres, office blocks, market stalls, kiosks and containers.
Industrial incentives
Rental holiday of up to six months.
Black Economic Empowerment
The following concessions may be granted to businesses with more than 50% black ownership: • Discount of 10% on normal rental rates • An additional 2% for women-owned businesses, where women have more than 50% shareholding • Additional 2% for businesses qualifying as youthowned entities with more than 50% shareholding belonging to individuals below the age of 35 years • An additional 2% for businesses with more than 25% shareholding belonging to disabled individuals • The concessions may be granted to any business entity and community-based projects will qualify for small industries with a 50% rental holiday for the first year • Rental holidays.
It is our duty to facilitate commercial and industrial activity, assist new investors looking for spacious and affordable premises, and facilitate SMME development, particularly in rural areas
Look no further than FDC for spacious and affordable, subsidised rental facilities.
Contact details: Email: wecare@fdc.co.za • Tel: +27 51 4000 800 • Website: www.fdc.co.za
Driving enterprise development and investment in South Africa’s most central province, the Free State.
The FDC contributes to the Free State’s economic development through four service delivery pillars:
SMME/co-operative funding and support The FDC provides products and services to SMMEs and co-operatives in the form of financial support (business loans) as well as business development support (facilitating training and mentoring service providers).
The principal loan products offered to Free State entrepreneurs by the FDC are: • Start-up loans for recently established businesses that are mainly at formative stages. • Expansion loans offering viable and existing businesses the capital needed to expand. • Business take-over finance to assist potential clients to acquire a business as a going concern. • Bridging finance for SMMEs with short-term cash-flow problems with contracts or tenders. Property management The FDC administers a diverse property portfolio and can offer small to medium enterprises suitable premises at affordable rates. The corporation has some 253 commercial properties, 290 industrial properties and a large number of residential and vacant land for development.
The corporation aims to use them to facilitate commercial and industrial activity, while assisting new investors looking for suitable premises.
The FDC offers advice and guidance in terms of the following incentives: • Subsidised rental rates. • Rental holidays of up to three months. • Special incentives and discounts for BEE companies or individuals.
Export-related services The FDC services to exporters include the Export Promotion Programme, which aims to grow demand
for Free State products in global markets through capacity-building workshops, the dissemination of trade leads, networking opportunities with inbound trade missions, product promotion through participation in outbound group missions and on national and international exhibitions, access to national export-incentive programmes, market access information and technical advice on exporting procedures.
Investor services The FDC offers a range of services to investors and businesses looking to trade in the Free State. These include the following: • Project appraisal and packaging. • Promotion and facilitation of investment projects and facilitation of access to finance. • Providing access to business and government networks and assistance with business retention and expansion. • Information on statutory requirements, investment advice and assistance with investment incentive applications and business permits. • Assisting with the development of local and international markets and facilitating joint ventures/equity partnerships through identification of local partners.
CONTACT INFORMATION:
Free State Development Corporation
Tel: +27 51 4000 800 Emails: wecare@fdc.co.za invest@fdc.co.za Website: www.fdc.co.za
Maluti-A-Phofung SEZ investment opportunities
Maluti-A-Phofung Special Economic Zone (MAP SEZ) has been established in terms of the Special Economic Zones Act No. 16 of 2014. The programme is intended to deepen industrial development and improve manufacturing competitiveness in the Maluti-APhofung region.
Situated in Harrismith and Tshiame in the Eastern Free State, MAP SEZ is strategically located on the N3 national road, halfway between Johannesburg and Durban. MAP SEZ offers 1 038 hectares of land for industrial development.
Since the Durban port is the busiest in the southern hemisphere, it therefore means that the N3 carries the majority of the traffic to different locations in South Africa and neighbouring countries such as Lesotho and Swaziland. Through its cross-docking precinct and its logistics and warehousing sectors the MAP SEZ presents itself as a solution to lighten the traffic pressure on the N3.
This Special Economic Zone (SEZ) is part of the Free State leg of the massive Durban-Free State-Gauteng logistics and industrial corridor that is intended to strengthen the logistics and transport corridor between South Africa’s main industrial hubs to: • Improve access to export and import markets. • Integrate Free State industrial strategy activities into the corridor. • Create job opportunities and grow the economy within the region.
Investor benefits Benefits that will be derived from locating within MAP SEZ include: • 15% corporate tax instead of 28% corporate tax. • Building allowance. • Employment incentive. • Customs controlled area (CCA). • 12i Tax allowance. SEZ project pipeline There are various companies that have signed letters of intent to locate in the MAP SEZ. Some of the sectors targeted for establishment within the MAP SEZ are as follows: • Logistics and distribution. • Agro-processing. • Food processing. • Rail-based container terminal (Transnet Freight
Rail). • Starch chemicals. • Biogas.
MAP SEZ milestones • MAP SEZ was launched by President Zuma on 25
April 2017 to operate as a Special Economic Zone. • Maluti-A-Phofung SEZ was granted an operator permit in 2017 by the Minister of Trade and
Industry after cabinet approval. • Perimeter fencing and lighting have been completed. • Bulk infrastructure roll-out is in progress and is 90% complete. • The SEZ has developed a marketing and promotion pipeline which has attracted 30 potential investors with an estimated investment value of R 2.6-billion and will create approximately 22 130 permanent and temporary job opportunities in the next 5 to 10 years. • Construction of top structures commenced in
June 2019.
What the MAP SEZ offers • Lots of space – more than 1000ha available to prospective investors. • Long-term lease periods which provide investors an opportunity to recoup investment on infrastructure. • Affordability in the form of concessions offered on rentals.
Economic development As part of its mandate, the MAP SEZ is intended to create decent work, transfer of skills and other social economic benefits. In line with this requirement, the MAP SEZ’s robust investment-promotion pipeline will allow the entity to create an estimated 22 130 permanent and temporary job opportunities in the Maluti-A-Phofung region over the next 5 to 10 years.
Key MAP SEZ investment pipeline Pork abattoir A Danish investor with more than 30 years’ experience in the pork processing business will establish a pork abattoir in the MAP SEZ. Through the establishment of this abattoir, the investor aims to create jobs, and transfer skills and expertise to the South African job market, and to develop the growing market for pork in South Africa.
Agri-park This agri-park project involves the building of a world-class, integrated food processing park which will include food processing, warehousing, cold storage and manufacturing facilities. The agriparks project scheme has been created to promote the upskilling of local farmers and to expose local farmers to the commercial market space.
Human hair manufacturer A Chinese hair company has partnered with South African companies to establish a human hair manufacturing plant. The final product will be sold to retail facilities in the local and international market.
Inland agri-hub facility This investor intends to develop an inland agro-logistics facility and also to create silos for local farmers. Another leg of this business includes the shipment of grain in and around the Free State Province and the SADC region. MAP SEZ priority sectors There are six priority sectors: • Automotive • Agro-processing • Logistics • General processing • ICT • Pharmaceuticals.
TO DISCUSS THESE OPPORTUNITIES, CONTACT:
Ms M Setai
Manager in the Office of the Chief Executive Officer Maluti-a-Phofung Special Economic Zone Tel: +27 51 4000 800 | Cell: +27 73 210 0935 | Email: maphoka@mapsez.co.za Website: www.mapsez.co.za
Free State Province
Center yourself in the heart of South Africa
CEO of Free State Gambling, Liquor and Tourism Authority Mr Kenny Dichabe
The Free State Gambling, Liquor and Tourism Authority (FSGLTA) is one of the two entities of the Department of Economic, Small Business Development, Tourism and Environmental Affairs (DESTEA). The FSGLTA was established by the FSGLTA Amendment Act 4 of 2017, which was amended to incorporate the former Free State Tourism Authority and Free State Gambling and Liquor to form the new entity which is known as FSGLTA.
Vision A transformed economy and a prosperous society with an effective, well-regulated gambling and liquor industry and a vibrant tourism sector.
Mission To be a leading developmental institution that drives economic transformation, regulation and adaptation to the ever-changing industry dynamics to benefit the Free State.
Mandate The mandate of the Free State Gambling, Liquor and Tourism Authority is to regulate the gambling and liquor industries within the province and to market and promote tourism in the province. The Authority’s purpose is to promote legally compliant, responsible, sustainable and transformed gaming and liquor industries through effective licensing, regulating and reporting on the activities of the industries, and to position the Free State Province as a tourist destination of choice.
The gambling industry • Invite applications for licences (gambling) • Consider, grant or refuse applications • Cancel, suspend, vary, renew or revoke a licence or registration approved • Implementation of norms and standards in the gambling industry as determined by the National Gambling Act • Ensure that gambling activities are effectively regulated, licensed and controlled • Ensure compliance to the act, rules and regulations
The liquor industry • Receive applications for registrations (liquor) • Reduce the socio-economic and other costs of alcohol • Promote the development of a responsible and sustainable liquor industry in relation to gambling • Generate revenue for the Free State Province.
The tourism industry It is important that the FSGLTA intensifies its efforts to ensure effective marketing of the province in order to attract domestic tourists as well as international tourists. The province continues to enhance tourism infrastructure, up-skill the sector, inculcate the culture of service excellence and enhance the provision of world-class visitor experiences. The Authority has partnered with event organisers and tour operators to market and promote the Free State as a tourist destination. These are achieved through the following: • Forging strategic partnership with the public and private sectors to leverage from each the capability and capacity to improve the industry • Streamlining the impact of events through partnerships and sponsorships • Improving on Meetings, Incentives,
Conferencing and Events (MICE) as a focused growth area of the market • Continuous review of the marketing plans to stay on par with the industry trends.
Gambling and Liquor Contact Details District Contact person Contact details
District Contact person Mangaung Metro Abraham Classen Contact details classena@fsglta.gov.za 051 404 0320 Mangaung Metro Abraham Classen classena@fsglta.gov.za 079 506 0272 051 404 0320 Thabo Mofutsanyana Peter Moleko 079 506 0272 molekop@fsglta.gov.za 078 309 4178 Thabo Mofutsanyana Peter Moleko molekop@fsglta.gov.za Lejweleputswa Thabo Tlake 078 309 4178 tlaket@fsglta.gov.za 057 492 0001 Lejweleputswa Thabo Tlake tlaket@fsglta.gov.za 072 533 6681 057 492 0001 Fezile Dabi Bongakele Nzunga 072 533 6681 nzungab@fsglta.co.za 056 492 0001 Fezile Dabi Bongakele Nzunga nzungab@fsglta.co.za 082 256 5926 056 492 0001 Xhariep Mpakiseng Moloi 082 256 5926 moloim@fsglta.gov.za 051 492 0167 Xhariep Mpakiseng Moloi moloim@fsglta.gov.za 083 664 9675 051 492 0167 083 664 9675
Tourism Information Contact Details
Tourism route Contact person Contact details
Tourism route Cheetah Route Contact person Nthabiseng Methola Contact details cheetah@freestatetourism.org 073 125 1614 Eagle Route Bonolo Molefe eagle@freestatetourism.org 072 056 6090 Flamingo Route Dineka Lephowane flamingo@freestatetourism.org 073 796 8577 Lion Route Keakabetse Ramokonopi lion@freestatetourism.org 084 951 1564 Springbok Route Kefiloe Molefe molefek@fsglta.gov.za 079 496 2999
Cheetah Route Nthabiseng Methola cheetah@freestatetourism.org 073 125 1614 Eagle Route Bonolo Molefe eagle@freestatetourism.org 072 056 6090 Flamingo Route Dineka Lephowane flamingo@freestatetourism.org 073 796 8577 Lion Route Keakabetse Ramokonopi lion@freestatetourism.org 084 951 1564 Springbok Route Kefiloe Molefe molefek@fsglta.gov.za 079 496 2999
OVERVIEW Establishing a business in South Africa
South Africa has eased the barriers to doing business for locals as well as international companies and individuals.
South Africa has a sophisticated legal, regulatory and banking system. Setting up a business in South Africa is a relatively straight-forward process with assistance being offered by organisations such as the Department of Trade, Industry and Competition and provincial investment agencies like the Free State Development Corporation (FDC).
South African law regulates the establishment and conduct of businesses throughout the country. Tax, investment incentives, regulations governing imports, exports and visas are uniform throughout the country. The particular environment varies from province to province with regard to the availability of human and natural resources, the infrastructure and support services, business opportunities and the quality of life.
In this respect, the FDC can offer specific advice about the business environment in the province.
Business is regulated by the Companies Act and the Close Corporation Act, which cover accounting and reporting requirements. Under new legislation, no new Close Corporations can be created but CCs can convert to companies.
Registration of company The company must be registered with the Companies and Intellectual Properties Commission, (CPIC) in Pretoria within 21 days of the company being started. There are a range of administrative procedures that need to be fulfilled. Bank account A business bank account must be opened in the company’s name with a bank in South Africa.
Registration with the receiver of revenue • As a Provisional Taxpayer • As a VAT vendor • For Pay As You Earn (PAYE) income tax payable on money earned by employees • For Standard Income Tax on Employees
Registration with the Department of Labour Businesses employing staff will have to contact the Department of Labour regarding mandatory contributions to the Unemployment Insurance Fund (UIF). Register with Compensation Commissioner for Compensation Fund: Files with the Compensation Fund (in the Department of Labour) for accident insurance (Workmen’s Compensation).
Registration with the local authority Relevant only to businesses dealing in fresh foodstuffs or health matters.
Other procedures • Checking exchange control procedures (note that non-residents are generally not subject to exchange controls except for certain categories of investment)
• Obtaining approval for building plans • Applying for industry and export incentives • Applying for import permits and verifying import duties payable • Registering as an exporter if relevant and applying for an export permit.
Business entities There are a variety of forms which businesses can take, including private and public companies, personal liability companies, non-profit companies, state-owned companies and even branches of foreign companies (or external companies).
Branches of foreign companies fall under Section 23 of the Companies Act of 2008 and are required to register as “external companies” with the CIPC. An external company is not required to appoint a local board of directors but must appoint a person resident in South Africa who is authorised to accept services of process and any notices served on the company. It must also appoint a registered local auditor and establish a registered office in South Africa.
Patents, trademarks and copyrights Trademarks (including service marks) are valid for an initial period of 10 years and are renewable indefinitely for further 10-year periods. Patents are granted for 20 years, normally without an option to renew. The holder of a patent or trademark must pay an annual fee in order to preserve its validity. Patents and trademarks may be licensed but where this involves the payment of royalties to non-resident licensors, prior approval of the licensing agreement must be obtained from the dtic. South Africa is a signatory to the Berne Copyright Convention.
Permits for foreign nationals Work permits In considering whether or not to grant a work permit, the Department of Home Affairs will first evaluate the validity of the offer of employment by conducting a number of checks to confirm the following: • Has the Department of Labour been contacted? • Has the position been widely advertised? • Is the prospective employer able to prove that he or she has tried to find a suitably qualified local employee prior to hiring a foreigner? • Is the prospective employee appropriately qualified and do they have the relevant experience?
Business permits Foreign nationals who wish to establish their own business or a partnership in South Africa must, apart from having sufficient funds to support themselves and their family, be able to invest at least R2.5-million in the business.
The funds must originate overseas, be transferable to South Africa and belong to the applicant (ie emanate from the applicant’s own bank account). The business must also create jobs for South African citizens. After six months to a year, proof will have to be submitted that the business is employing South African citizens or permanent residents, excluding family members of the employer.
Applications for work permits for self-employment can only be lodged at the South African Consulate or Embassy in the applicant’s country of origin. The processing fee is US$186. The applicant would also have to lodge a repatriation guarantee with the consulate/embassy equivalent to the price of a one-way flight from South Africa back to his or her country of origin.
This guarantee is refundable once the applicant has either left South Africa permanently or obtained permanent residence. Any application for an extension of a business permit may be lodged locally. The processing fee per passport holder is R425. Some countries also need to pay R108 per return visa.
A list of countries to which this applies is available from the Department of Home Affairs.
The FDC assists investors in applying for the relevant work permits to conduct their business.
What can the FDC do for you? The FDC will help new businesses by assisting in project appraisal and packaging, putting investors in touch with relevant agencies and government departments, alerting investors to investment incentives and setting up joint ventures where required.
South African investment incentives
The South African government, particularly the Department of Trade, Industry and Competition, has a range of incentives available to investors, existing companies, entrepreneurs and co-operatives across many sectors.
South Africa wishes to diversify its economy and incentives are an important part of the strategy to attract investors to the country. The Department of Trade, Industry and Competition (the dtic) is the lead agency in the incentives programme, which aims to encourage local and foreign investment into targeted economic sectors, but the Industrial Development Corporation (IDC) is the most influential funder of projects across South Africa.
There a variety of incentives available and these incentives can broadly be categorised according to the stage of project development: • Conceptualisation of the project – including feasibility studies and research and development (grants for R&D and feasibility studies, THRIP, Stp, etc) • Capital expenditure – involving the creation or expansion of the productive capacity of businesses (MCEP, EIP, CIP, FIG, etc) • Competitiveness enhancement – involving the introduction of efficiencies and whetting the competitive edge of established companies and commercial or industrial sectors (BBSDP, EMIA,
CTCIP, etc)
• Some of the incentives are sector-specific, for example the Aquaculture Development and
Enhancement Programme (ADEP), Clothing and Textile Competitiveness Improvement
Programme (CTCIP) and the Tourism Support
Programme (TSP).
Manufacturing
Key components of the incentive programme are the Manufacturing Incentive Programme (MIP) and the Manufacturing Competitiveness Enhancement Programme (MCEP). The initial MCEP, launched in 2012, was so successful that it was oversubscribed with almost 890 businesses receiving funding. A second phase of the programme was launched in 2016. The grants are not handouts as the funding covers a maximum of 50% of the cost of the investment, with the remainder to be sourced elsewhere.
The Enterprise Investment Programme (EIP) makes targeted grants to stimulate and promote investment, BEE and employment creation in the manufacturing and tourism sectors. Aimed at smaller companies, the maximum grant is R30-million. Specific tax deductions are permissible for larger companies investing in the manufacturing sector under Section 12i of the Income Tax Act.
Other incentives
Other incentives available to investors and existing businesses in more than one sector include the: • Technology and Human Resources for Industry
Programme (THRIP) • Support Programme for Industrial Innovation (SPII) • Black Business Supplier Development Programme (BBSDP), which is a cost-sharing grant offered to black-owned small enterprises • Critical Infrastructure Programme (CIP) that covers between 10% and 30% of the total development costs of qualifying infrastructure • Co-operative Incentive Scheme, which is a 90:10 matching cash grant for registered primary co-operatives • Sector Specific Assistance Scheme, which is a reimbursable 80:20 cost-sharing grant that can be applied for by export councils, joint action groups and industry associations.
Incentives for SMMEs
A lot of emphasis is placed on the potential role of small, medium and micro enterprises in job creation and a number of incentives are designed to promote the growth of these businesses. These include: • Small Medium Enterprise Development
Programme (SMEDP) • Isivande Women’s Fund • Seda Technology Programme (Stp). • Seda is the Small Enterprise Development Agency, an agency of the Department of Small Business
Development that exists to promote SMMEs.
Trade-related incentives
The Export Marketing and Investment Assistance (EMIA) Scheme includes support for local businesses that wish to market their businesses internationally to potential importers and investors. The scheme offers financial assistance to South Africans travelling or exhibiting abroad as well as for inbound potential buyers of South African goods.
ONLINE RESOURCES
Department of Trade, Industry & Competition: www.thedti.gov.za Free State Development Corporation: www.fdc.co.za Industrial Development Corporation: www.idc.co.za Official South African government incentive schemes: www.investmentincentives.co.za
Making it easier to do business with Nedbank Whole-view Business Banking™
Kevin de Beer, Nedbank Provincial General Manager for Retail and Business Banking for Free State and Northern Cape, explains how Nedbank can help business owners in these regions.
There is good news for Free State and Northern Cape business owners and entrepreneurs seeking a unique banking experience. Nedbank Business Banking has business managers, located across both provinces, specialising in commercial industries as well as the agricultural sector.
De Beer says his team is ready to assist clients with professional advice, industry-specific solutions and a comprehensive range of financial products and services.
‘At Nedbank Business Banking we believe that you need a financial partner who not only understands your circumstances and aspirations, but also provides you with relevant solutions and a banking experience that is hassle-free. This allows you to concentrate on what’s most important to you – running your business,’ says de Beer.
In line with our new brand proposition encouraging clients to see money differently, our Free State and Northern Cape agriteams are committed to providing key support, as well as advisory and business services to all roleplayers involved in the agrispace in both provinces. We will share our financial expertise and play a role in advancing profitable, sustainable practices throughout the agricultural production and consumption value chain.
We recognise that farmers today face many challenges, and to remain competitive, they continually have to improve and adopt best practices and new technologies.
‘We encourage you to see money differently with Whole-view Business Banking™, says de Beer.
‘We are also involved in a number of initiatives with the public sector, ensuring that such partnerships support provincial government goals in respect of job creation and growing the economy,’ de Beer concludes.
If you are interested in taking your business to the next level, please call Kevin de Beer on +27 (0)51 400 5813, send an email to kevindeb@nedbank.co.za or visit www.nedbank.co.za.
Nedbank Business Bundle is a game changer with savings and personalised services for small enterprises
The new Business Bundle from Nedbank is a game changer for small enterprises in the Free State and Northern Cape, offering the best value for money when compared to rival offerings.
With the country’s challenging economic environment, the Business Bundle not only offers you personalised banking services, but also critical tools to save – with up to 40% savings on monthly banking fees – contributing directly to the bottomline at a time when every cent counts.
In line with Nedbank’s new brand proposition to see money differently, the Business Bundle resonates with the bank’s commitment to do good by promoting small enterprises.
‘As a bank for small businesses we are committed to partnering with entrepreneurs to help grow their businesses. As such, Nedbank is always looking at ways in which we can help unlock the value of our clients’ businesses. We support their business growth journeys by providing practical tools to help them run their businesses,’ says Kevin de Beer, Nedbank Provincial General Manager, Retail and Business Banking for Free State and Northern Cape.
To see how Nedbank can help your small business reach its goals, call Kevin de Beer on +27 (0)51 400 5813, send an email to kevindeb@nedbank.co.za or visit www.nedbank.co.za. Trust us to protect your business against everyday risk
Shareen Gobichund, Regional Manager of Broker Channels for Free State and Northern Cape, says Nedbank Insurance is not a onesize-fits-all business.
Nedbank Insurance has evolved into a business that provides integrated insurance to individual and business clients. Our offering comprises comprehensive short-term and life insurance solutions, as well as investments.
Nedbank Insurance provides a comprehensive offering of short-term products on behalf of blue-chip insurers. If you are interested in expert advice on the type of cover that is right for your business needs, look no further.
Nedbank has a team of specialists ready to provide you with the information you need to make an informed decision. For more information call Shareen Gobichund on +27 (0)31 364 3308, send an email to shareeng@nedbankinsurance.co.za or visit www.nedbank.co.za.
