Foreigners and business permits: What the law says

According to Peter Tshisevhe, director of TGR Attorneys, legislation has made it possible for foreign nationals to obtain permits to operate businesses in South Africa in a number of ways.

However, in some cases, millions of rands are required from those wishing to join or establish local businesses.

“The Immigration Act entitles the director-general [of home affairs] to issue a business visa to a foreign national intending to establish or invest in, or who has established or invested in, a business in South Africa in which he/she may be employed, and an appropriate visa for the duration of the business visa to the members of such foreign national’s immediate family.

"This is provided that, inter alia, such foreign national invests the prescribed minimum financial or capital contribution in such business, currently set at R5 million; that the investment complies with any relevant registration requirements set out in any law administered by the SA Revenue Service; and that the foreign national does not conduct work other than that related to the business in respect of which the visa has been issued,” said Tshisevhe.

He said the law also makes provision for other labour visas for foreign nationals, including work visas and visas for individuals possessing critical skills and qualifications.

However, “if a foreign national who is not an asylum seeker or refugee is in the country without the correct visa then he is not allowed to undertake any sort of work in South Africa, including trading in the informal sector”.

Tshisevhe pointed out that courts decided in a case involving the Somali Association of SA in 2015 that asylum seekers and refugees were entitled to apply for new business or trading licences in terms of the Businesses Act and that closure of businesses operated by refugees and asylum seekers in possession of valid permits was unlawful.

“South Africans who are of the view that they are adversely affected by the trading of foreign nationals in the informal sector are strictly prohibited from engaging in illegal practices such as looting or attempting to remove foreign nationals who are trading in that sector,” he said, adding that the obligation to regulate the participation of foreigners in the informal sector still rested with the immigration office and the police.

Tshisevhe points out that our tax system is structured in such a way that if the income of a foreign national is derived from local earnings, that person is taxed in South Africa, which is in line with South African citizens working and earning income abroad who are also taxed in the countries in which they reside.

“There are double tax treaties in place between countries that could be applied to avoid double taxation of the persons concerned,” he added.

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