South Africa has a well-developed and formally regulated company law regime. All South African businesses are governed by the Companies Act No 71 of 2008. It is administered by the Companies and Intellectual Properties Commission.
The new Companies Act, which was promulgated in 2009 and has been effective since May 2011, rewrites South African law completely. The new Act aims to modernise the law, align it with international best practice, and make it more business friendly – especially by streamlining it with other South African legislation, such as the Promotion of Access to Information Act. By making it simpler and less prescriptive, the new Act encourages entrepreneurship as well as economic and employment growth. It is more flexible (companies are allowed to change certain requirements according to their own circumstances, for example); and adaptable (smaller companies have less arduous responsibilities than large public companies when it comes to corporate governance and financial reporting). South African law used to provide for a business entity type called Close Corporations (CCs) until the Companies Act 71 of 2008 came into force on 1 May 2011. While CCs may no longer be created, existing CCs will continue to operate until they are converted into companies Note: Foreigners who are contemplating investing in the South African economy by establishing a business or by investing in an existing business in the country must apply for a business permit. As an applicant, you will be required to invest a prescribed financial capital contribution.
The Companies Act regulates the formation, conduct of affairs, and liquidation of all companies and it makes no distinction between locally owned or foreign-owned companies. Companies may be either private or public. There is a wealth of world-class expertise that will guide an investor through the process of registering a business in South Africa. Legal, management, banking and accounting firms are supported by chambers of commerce, embassies and government offices.