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About Business Environment of South Africa

Doing Business In South Africa

 
  1. South Africa is ranked 39th out of 185 economies in Doing Business 2013, increasing by two points compared to last year. This increase largely reflects a large 30 point improvement in the Trading Across Borders indicator. South Africa's ongoing customs modernization program reduced the time and documents required to export and import.
  2. Enterprise Surveys (2007) identified Crime, Theft & Disorder, Electricity and Access to Finance as the top 3 obstacles on firms in South Africa. 76.4% of firms reported paying for security, compared to 63.1% in the region, and 57.5% for all countries surveyed. Over thirty percent (30.1%) of firms surveyed have a line of credit or loans from financial institutions, compared to 22.7% for the region and 35.9% for all countries surveyed.
  3. Several industry sectors covered by the Investing Across Sectors indicators are subject to statutory foreign equity ownership restrictions in South Africa.
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  5. The Worldwide Governance indicators in the latest World Bank Worldwide Report (2011) rank South Africa around the 50th percentile for Government Effectivenss, Regulatory Quality, and Rule of Law. Voice and Accountability, and Political Stability/Absence of Violence rank around the 25th percentile.
  6. South Africa’s economic freedom score is 61.8, making its economy the 74th freest in the 2013 Index. Its score is 0.9 point lower than last year due to losses in half of the 10 economic freedoms including those measuring the control of government spending and freedom from corruption. South Africa is ranked 6th out of 46 countries in the Sub-Saharan Africa region, and its overall score is higher than the world and regional averages.

Source: World Bank

 

Visa Information

Visitors on holiday from most Commonwealth countries (including Australia and the UK), most Western European countries, Japan and the USA don’t require visas. Instead, you’ll be issued with a free entry permit on arrival. These are valid for up to 90 days, and your passport must be valid for at least 30 days after the end of your intended visit. Unless you request otherwise, the immigration officer may use the date of your flight out as the date of your permit expiry.
 
If you aren’t entitled to an entry permit, you’ll need to get a visa (R425 or US$47 or €43) before you arrive. These aren’t issued at the borders, and must be obtained at a South African embassy or consulate, found in most countries. Allow at least a month for processing; for more information, visit the Department of Home Affairs website (www.home-affairs.gov.za).
 
If you do need a visa (rather than an entry permit), get a multiple-entry visa if you plan to make a foray into Lesotho, Swaziland or any other neighbouring country. This avoids the hassle of applying for another South African visa.
 
For any entry – whether you require a visa or not – you need to have at least one completely blank page in your passport, excluding the final blank page.
 
Visa extensions
Applications for extensions to visas or entry permits should be made at the Department of Home Affairs, which has branches in Cape Town, Durban, Jo’burg and Pretoria.
 
Visas for onward travel
Visas for Namibia are not issued at the border, though many nationalities don’t require one. Visas for Zimbabwe and Mozambique are available at the borders. (South African nationals don’t need a visa for Mozambique.) For Mozambique it’s cheaper to arrange your visa in advance at the Mozambican High Commission in Mbabane, or in Nelspruit. Both issue express visas in 24 hours.
 
If you’ll be arranging your visa in advance: Zimbabwean visas take at least a week to issue in South Africa; those for Namibia take two to three days; and those for Botswana take between four and 14 days. Nonexpress Mozambique visas take one week.
 

Business Etiquette

Relationships & Communication
 

South Africans are transactional and do not need to establish long-standing personal relationships before conducting business. 

If your company is not known in South Africa, a more formal introduction may help you gain access to decision-makers and not be shunted off to gatekeepers.

Networking and relationship building are crucial for long-term business success.

Relationships are built in the office. 

Most businessmen are looking for long-term business relationships.

Although the country leans towards egalitarianism, businesspeople respect senior executives and those who have attained their position through hard work and perseverance. 

There are major differences in communication styles depending upon the individual's cultural heritage.

For the most part, South Africans want to maintain harmonious working relationships, so they avoid confrontations. 

They often use metaphors and sports analogies to demonstrate a point. 

Most South Africans, regardless of ethnicity, prefer face-to-face meetings to more impersonal communication mediums such as email, letter, or telephone.


Business Meeting Etiquette
 

Appointments are necessary and should be made as far in advance as possible. 

It may be difficult to arrange meetings with senior level managers on short notice, although you may be able to do so with lower-level managers.

It is often difficult to schedule meetings from mid December to mid January or the two weeks surrounding Easter, as these are prime vacation times.

Personal relationships are important. The initial meeting is often used to establish a personal rapport and to determine if you are trustworthy. 

After a meeting, send a letter summarizing what was decided and the next steps.


Business Negotiations

It is imperative to develop mutual trust before negotiating. 

Women have yet to attain senior level positions. If you send a woman, she must expect to encounter some condescending behaviour and to be tested in ways that a male colleague would not. 

Do not interrupt a South African while they are speaking. 

South Africans strive for consensus and win-win situations. 

Include delivery dates in contracts. Deadlines are often viewed as fluid rather than firm commitments. 

Start negotiating with a realistic figure. South Africans do not like haggling over price. 

Decision-making may be concentrated at the top of the company and decisions are often made after consultation with subordinates, so the process can be slow and protracted.


Dress Etiquette
 

Business attire is becoming more informal in many companies. However, for the first meeting, it is best to dress more conservatively. 

Men should wear dark coloured conservative business suits. 

Women should wear elegant business suits or dresses.

 

General Business Hours