Doing Business In South Africa

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Researching the Market

Why South Africa?

South Africa is a sophisticated and promising market, offering a combination of well-developed First World economic infrastructure with a vibrant emerging market economy.

Since the current government came to power in 1994 the country has made tremendous strides towards becoming a major contributor in international markets.

South Africa has abundant natural resources, a well developed banking system, good infrastructure with major capital injections to upgrade this further, a reasonable tax structure, a business culture that is not too dissimilar from that of the UK, with a time difference of only one or two hours, a fairly stable political climate, a stock exchange ranked among the top 20 in the world and it is the gateway to other African markets.

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South Africa was ranked as the eighteenth most attractive destination for foreign direct investment, by global strategic management consulting firm AT Kearney and ranked in the top four countries in terms of the transparency surrounding its budgets, according to the Open Budget Index.

In comparison to other BRIC nations (Brazil, Russia,India, China), South Africa is spending two to three times more on education - 7.18 per cent of its GDP. Unit labour costs in South Africa are also significantly lower than those of many other emerging markets.

The Global Agreement on Tariffs and Trade that was signed by South Africa in 1994, and becoming a member of the World Trade Organization, have helped the country become a player in the global trading system.

Trade reforms, such as tariff reductions and a rationalisation programme, have been introduced. Market access has been enhanced through free trade agreements with the European Union and the Southern African Development Community (SADC).

UK Trade & Investment has identified South Africa as a high-growth market. The UK is one of South Africa's most significant trading partners, with over £7 billion in two-way trade in goods and services. With a climate that is geared for growth and open for trade, South Africa is the ideal destination for the investor who has an eye on building a global empire.

Travel Information: 

From the 1st October 2014, there are new regulations regarding children flying out to South Africa. 

For up-to-date information regarding new flying rules for children when flying to South Africa, please select the following link www.airport-parking-shop.co.uk/blog/new-rules-flying-kids-south-africa-apply-1-oct-2014 

Source - Fubra Limited 

 

UK Trade & Investment

UK Trade & Investment is the government organisation that helps UK-based companies succeed in the global economy. We also help overseas companies bring their high quality investment to the UK's dynamic economy - acknowledged as Europe's best place from which to succeed in global business.

UK Trade & Investment offers expertise and contacts through its extensive network of specialists in the UK, and in British embassies and other diplomatic offices around the world. We provide companies with the tools they require to be competitive on the world stage.

Dedicated Trade and Investment teams in South Africa are based in Johannesburg, Cape Town and Durban.

 

Taking the Strategic Approach

Your aims:

  • Do you wish to sell to South Africa?

  • Do you wish to establish your own company presence in South Africa, for example, through a representative office or limited liability company?

  • Do you need to be involved in South Africa at all?

Your company:

  • What are the unique selling points (features and benefits) for your product or service?

  • Do you know if there is a market for your product or service in South Africa?

  • Do you know if you can be compettitive in South Africa?

  • Do you have the time and resources to handle the demands of communication, travel, product delivery and after-sales service?

Your knowledge:

  • Do you know how to secure payment for your products or service?

  • Do you know where in South Africa you should start?

  • Do you know how to locate and screen potential partners, agents or distributors?

  • Do you know about Broad-Based Black Economic Empowerment legislation and how it could affect your business?

Often, new exporters will feel a bit overwhelmed about trading with South Africa. Much consideration and planning will need to go into deciding on the company type, delivery of products and services, marketing strategies, and local conditions. Before making these big decisions, exporters and investors should spend sometime thinking about business objectives.

The questions listed to the right should help you to focus your thoughts. Your answers to them will highlight areas for further research and also suggest a way forward that is right for your company.

You may then want to use this as a basis for developing a formal strategy, although this will not be necessary or appropriate for all companies.

 

Sources of information

UK Trade & Investment - International Trade Teams
In England, UK Trade & Investment provides support for UK companies through a network of international trade teams (ITTs) based in the English regions. UK Trade & Investment services are delivered in Scotland, Wales and Northern Ireland in co-operation with the respective national development agencies.

The ITTs also organise roadshows, seminars and events that highlight South Africa.

To find your nearest International Trade Adviser call +44 (0)20 7215 5000 or use the database at www.ukti.gov.uk

 

Desk Research

You will be able to find out much valuable free information from carrying out desk research. A good place to start is the UK Trade & Investment website www.ukti.gov.uk which provides detailed country and sector information.

Registering on the website, which is free, provides you with a number of additional benefits such as access to business opportunities, sector and market reports and information alerts. It also enables you to self manage the information you receive.

Once you have gained a clearer idea of the South African market and what you want to achieve, it is time to start making contact with the specialists and exploring what kind of tailored research you might need to make an effective entry into the market.

UK Trade & Investment offers a range of services to businesses. There are also many professional and legal firms, as well as private sector consultancies, which provide services to companies looking to do business with South Africa.

 

How UK Trade & Investment can help

UK Trade & Investment services:

World business Guide

Developing your international trade potential
• Passport to Export - an assessment and skills based programme that provides new and inexperienced exporters with the training, planning and ongoing support they need to succeed overseas.

Accessing international markets
• Overseas Market Introduction Service (OMIS) - focused business advice and visit support from trade and investment teams in our Posts overseas. To ensure your new market entry is as smooth as possible there is a great deal of tailored assistance on offer before, during and after your market visit.

• Pre-visit briefing (one-to-one mentoring with overseas trade teams by email, telephone, or video conference).

• Securing appointments with target customers or potential business partners or agents.

• Advice on business etiquette and culture.

• Organising and inviting potential local partners to receptions, meetings and seminars where you can personally present your product or service.

• Use of official premises and facilities, (Conference Centre and Boardroom and Trade Commissioner's Residence) for example, for a product launch or reception.

• Country or market analysis (feasibility of your product/services in the market, opportunities, prospects and evaluation of market entry strategies).

• Identification of possible business partners, preliminary exchanges with them on your behalf and checking of contacts for you to make during a visit.

• Advice on local conditions including competitors, local regulation, tender opportunities, procedures, standards,etc.

• Advice on how to access or influence decision-makers; also local market introductions, e.g. Chambers of Commerce and trade associations.

• Advice and help on local publicity or the organisation of local events.

• Export Marketing Research Scheme - this service provides companies with the facility to collect systematic and objective market research to assist in the development of a market entry strategy. Financial support towards the costs of undertaking approved projects is also provided. This scheme is managed by British Chambers of Commerce on behalf of UK Trade & Investment.

• Business Opportunities - free internet-based service matching UK companies with international opportunities identified by trade and investment teams in our posts overseas.

• Aid-Funded Business - advice on business opportunities that are created through Multilateral Development Agency projects. This service is managed by British Expertise /Birmingham Chamber of Commerce, on behalf of UK Trade & Investment.

Globe Trotting

Visiting the market
• Support for eligible SMEs taking part in overseas exhibitions under the Tradeshow Access Programme: in groups organised by an accredited trade organisation or solo support where appropriate.

• UK Trade & Investment sectoral missions are open to all UK businesses, and eligible SMEs may get mission grants from Market Visit Support.

• Export Communications Review - assessment of your company's export communications followed by practical recommendations for improvement. This scheme is managed by British Chambers of Commerce on behalf of UK Trade & Investment.

For further information on the above services contact your International Trade Adviser: visit www.ukti.gov.uk or call +44 (0)20 7215 5000.

 

Private Sector Assistance

The importance of good-quality independent legal advice cannot be emphasised enough.

In addition to the services of UK Trade & Investment, a wide variety of non subsidised private sector advice is available for companies wishing to do business in South Africa. This ranges from the business services provided by the big international professional services firms to specific services provided by specialist operators.

The range of services available from the private sector includes company structuring advice, marketing, website design, partner selection, due diligence, legal services, advice on intellectual property rights and outsourcing. Some consultancies also offer more in-depth assistance on developing a strategy for South Africa and operational management.

The importance of good quality independent legal advice, as in any foreign market, cannot be emphasised enough. It is essential to take this into consideration at the early stages of doing business in South Africa. Always seek good-quality independent legal advice before starting or signing anything that could have legal implications for your company, such as contracts or representation agreements.

Specialist legal advice on intellectual property rights protection is also recommended and there are a number of highly qualified patent agent firms available. Legal advice can be expensive, but it is money well spent. It is far better to ensure that your interests in South Africa are fully protected than to leave yourself vulnerable to untoward consequences - which can be even more expensive to sort out.

 

Source - UKTI

 

Strategic Partners