IMSC : GOVERNMENT AND EXCHANGE CONTROL

GOVERNMENT GRANTS

The Dept of Trade & Industry (DTI)has recognized the importance of encouraging investment into South Africa. By introducing the incentive scheme, Small Medium Enterprises Development Program (SMEDP), the DTI supports businesses in their foundation or in an expansion phase. The following sectors have been identified as being of great importance for the growth of the national economy and are within the scope of application of SMEDP:

	•	Biotechnology
	•	Information and communication technology
	•	Production
	•	Tourism

Under SMEDP up to thirty percent of the initial investment can be reclaimed over a period of three years.

EXCHANGE CONTROL

As a relict from years of international isolation, South Africa is to date enforcing Exchange Control Regulations. Consequently, South African legal entities may invet a yearly amount of not exceeding 2 million Rand abroad, South African citizens or permanent residents may only invest a lifetime maximum of 750 000 Rand abroad. Foreign investors should consider having the South African Reserve Bank approve any foreign investments before transferring funds to South Africa to be able to circumvent Exchange Control regulations when intending to repatriate the funds at a later stage.

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