We assist Foreign Nationals / Companies wanting to set up their footprint in the South African market. Our aim is to craft your business with you from the start while maintaining optimal structure in every facet thereafter.
In terms of the Companies Act, 2008, one can register a South African company with or without a company name. When a company is registered without a reserved name, the registration number automatically becomes the company name. Setting up a company has some responsibilities that come with it. This includes filing annual returns and an annual fee, irrespective of whether the business is trading or not.
Our team can address your company needs holistically and advise on the best structure for you and your business. Whether it be setting up a new business, subsidiary or branch.
It is important to know the difference between foreign branch and subsidiary, as this informs the tax treatment of your foreign entity and allows you to mitigate tax risk and ensure full compliance thereof.
SOUTH AFRICAN SUBSIDIARY vs BRANCH COMPANY |
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| SUBSIDIARY OF FOREIGN COMPANY | BRANCH OF FOREIGN COMPANY | |
| ENTITY | Incorporated as a South African resident company. | Established as a branch of the foreign company and regarded as an external / non-resident company in South Africa. |
| RESPONSIBLE PERSON | Individual physically present in South Africa. | Individual physically present in South Africa. |
| STATUTORY REQUIREMENTS | Filing of Annual returns with the Companies and Intellectual Property Commission and South African Revenue Service. | Filing of Annual returns with the Companies and Intellectual Property Commission and South African Revenue Service. |
| INCOME TAX | 27% on worldwide income of tax years ending on or after 31 March 2023. | 27% on only South African sourced income. |
| DIVIDENDS WITHHOLDING TAX | 20% subject to the potential application of the double-taxation agreement between South Africa and the other contracting state. | Not applicable. |
| EXCHANGE CONTROL | Approval to be obtained from the SARB on foreign incoming loans, and any profit repatriation. | Approval to be obtained from the SARB on foreign incoming loans, and any profit repatriation. |