Doing business in South Africa
South Africa is internationally recognised as one of the foremost emerging global markets, and the World Bank ranked the nation 34th (out of 183 economies polled) in terms of "Ease of Doing Business", a position on par with an assortment of familiar European faces (including the Netherlands and Austria).
Expats will likely find such a high ranking is well founded in a place where the local populace has learned that the most direct path to success is the one you carve yourself. It follows that starting and operating a firm on South African soil can be done without great difficulty.
Business culture in South Africa
South African business culture is marked by striking differences in ethnicity, language, and even geographic space.
The working world of an urban centre may contrast glaringly, not only with a rural counterpart, but also with other urban centres. South Africans and expats alike can't help but notice the difference between hard-working Johannesburg and hedonistic Cape Town.
The most important thing for an expat doing business in South Africa will be to attempt to understand this cultural complexity as far as possible. As time passes, a few common practices and bits and pieces of normal protocol will start to materialise.
Though South Africans tend to prefer to do business with those they've met before, in general, they're a warm and inviting bunch and expats should anticipate that a little relationship building will go a long way. This friendly nature also tempers what could be a potentially stiff business world. Work environments tend to be more relaxed and personable than you may be used to, with the possible exception of some of the larger corporations and more established financial institutions.
That said, a clear management hierarchy still exists, and showing respect for senior executives and colleagues is important. In exchange, it happens that decisions are often made in a somewhat egalitarian manner.
Punctuality is important, but depending on the client's culture, it may be necessary to wait patiently. Government figures are often late.
Dress is conservative, but not formal. Suits are the exception to the rule, not the norm; though looking smart and stylish will be a point in your favour.
While South Africans certainly value hard work and applaud those who've succeeded, they tend to prioritise other aspects of day-to-day life like family, healthy living and nurturing relationships.
Starting a business in South Africa
South Africans take great pride in their spirit of innovation and their can-do attitude. Small businesses and successful entrepreneurs are many, and those expats interested in starting up their own little something in the country will find the process relatively simple.
Only six procedures are required to start a business in South Africa (three of which can be done simultaneously), and it normally takes a mere 22 days to complete registration.
Steps to staring a business
- Reserve a company name with the Registrar of Companies and pay fees
- Lodge formation documentation with CIPRO in Pretoria, Gauteng Province, South Africa for registration
- Open a bank account
- Register with the office of the local receiver of revenue (SARS) for income tax, VAT, and employee withholding tax (PAYE and SITE)
- Register with the Department of Labour for Unemployment Insurance
- Register with the Commissioner according to the Compensation for Occupational Injuries and Diseases Act
Doing Business in South Africa: Fast Facts
Business language: English, spoken throughout; beneficial, but not necessary, to know Afrikaans or Xhosa.
Hours of Business: Generally, Monday to Friday, 8:30am or 9am to 5pm. South Africans very rarely work on Saturdays and Sundays.
Dress: conservative but casual; suits will only be present in the most serious corporate environments.
Gifts: not expected, but always welcomed.
Gender equality: while women in South Africa are equally entitled to the same opportunities as their male colleagues, female representation at the senior management level remains low.
Racial equality: Black Economic Empowerment (BEE) is an affirmative action policy that aims to redress the oppression of past by helping to bring the black majority into the economic mainstream.
Dos and don'ts of business in South Africa
- Do - schedule appointments a fair amount of time in advance and confirm the day before meeting.
- Do - be punctual, even if you expect to wait.
- Don't - be taken aback if your South African colleagues ask about your personal life or discuss their personal life after even a short amount of time. South Africans are friendly by nature and this is common.
- Don't - be afraid to join your colleagues for an after-work event. This will never be seen as an obligation, but instead, as a fun method of team-building.
- Do - dress conservatively (even if your office embraces a more casual air) when initially joining an office, cementing relationships with new clients or associates, or attending an interview.