Investment Outlook During the State of the Nation Address in February 2017, President Jacob Zuma revealed that the government has established InvestSA, an investment one-stop shop which seeks to “provide an efficient facilitation and information service in order to retain and expand investment into South Africa” . Affected government departments are requested to avoid undue delays and unnecessary red tape, such as the issuing of licenses and visas. The intention is to “make it easy to do business in South Africa”. A recovery in commodity prices has resulted in an upswing in mining output. The South African economy entered a period of recovery, with an anticipated growth rate of 1.3% on 2017. Ongoing increases in electricity supply from investments in generating capacity should continue to raise supply, easing constraints that have hindered production and increase investor confidence. However, high unemployment rates continue to impose challenges to investors locally. To facilitate job creation, focus will be on, amongst other things industrialisation, mining, agriculture, energy, small, medium and micro enterprises, growing the oceans economy and tourism. South Africa has well-developed financial, legal and physical infrastructures. Strong financial regulation has ensured that domestic banks are already capitalised above the new Basel III levels. The Johannesburg Stock Exchange is one of the top 20 largest stock exchanges operating in the world. The development of industries such as gas exploration and extraction and the ocean economy (among others, aquaculture development), has been prioritised and government incentives have been provided for investment in these industries, which will provide attractive opportunities for foreign investment. The stable financial system and developed economy provide foreign investors with a platform fromwhich to launch activities in the rest of Africa. Forms of Corporate Structure Company law has existed in South Africa since 1861 and has, until recently, been based upon English law. In 2004, the Department of Trade and Industry published a policy paper which gave rise to the Companies Act 71 of 2008 (the Act ) which was signed by the President in 2009 and came into operation in 2011.The Act regulates companies in South Africa.
South Africa has a variety of business structures. Below is a list and brief description of the most widely used business setups: • Sole proprietorship A sole proprietorship is owned and run by a single individual. The owner takes all the profit but is also responsible for all liabilities. • Partnership A partnership does not have legal personality; the rights and obligations of the partnership are the rights and obligations of the partners. There must be a valid partnership agreement between two or more people stating each partner’s contribution. • Private company This is the most common vehicle utilised, and is a profit company which states in its memorandum of incorporation that the company is prohibited from offering any of its shares to the public and there is a restriction regarding the transferability of its shares. Its name must end with the expression ‘Proprietary Limited’ or ‘(Pty) Ltd’. • Personal liability company This is a company that meets the criteria of a private company and states in its memorandum of incorporation that it is personal liability company. The directors and past directors are jointly and severally liable together with the company for the debts and liabilities of the company as are or were contracted during their respective periods of office. Its name must end with the expression ‘Incorporated’ or ‘Inc’. • Public company A public company is a profit company that is not a state- owned company, a private company or a personal liability company. A public company may offer shares to the general public for the purpose of raising capital. Its name must end with the expression ‘Limited’ or ‘Ltd’. • State owned company State owned company is an enterprise registered as a company and is either listed as a public entity in the Public Finance Management Act, 1999 or a company owned by a municipality. Its name must end with the expression ‘SOC Limited’. • Non-profit company This is a company that is incorporated for a public benefit or other object. Its income and property are not
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