COMPANY SET-UP

Government Grants

General

Most of the African governments and government departments are offering grants for those companies, who invest in their country in certain industries and create employment opportunities. These grants may come in the form of subsidised access to loan capital, as a cash grant, which is not repayable or as tax rebates and tax reductions. 

Sector Grants

The sectors for which grants are available are vast and reach from manufacturing via export to automobile. INTO SA maintains strong bonds to the various authorities and facilitates the access to any grant currently available.

Grant Programmes / Incentives

The following programmes offered in South Africa are just a few, which are currently offering also foreign investors the possibility to reach viability – if not appreciation – by the host country:

Department of Trade and Industry (DTI)

  • Agriculture Development and Enhancement Programme (ADEP)
  • Automotive Investment Scheme (AIS)
  • Manufacturing Investment Programme (MIP) – suspended since 20 September 2013
  • Foreign Investment Grant for Import of Production Facilities and Plants (FIG) – suspended since 20 September 2013
  • Installation of Solar Energy Generation on Manufacturing Plants (MCEP) – funding exhausted since 14 December 2015
  • Clothing and Textile Competitiveness Programme (CTCP)
  • Export Marketing and Investment Assistance (EMIA)

South African Revenue Services (SARS)

  • Youth Employment Tax Incentive (ETI)
  • s12i – Greenfield and Brownfield Investment Tax Rebates
  • s12l – Energy Efficiency Tax Incentives

As far as the suspended incentives or the incentives out of funding above are concerned, most of them were originally meant to resume as early as 2016, but the deteriorating economy and now the Coronavirus Pandemic have shifted priorities as well as diminished available funds to the point that no renewal may be expected in the short term

COVID-19 Support

In order to alleviate the financial strain that the lockdown regulations have put on many sectors of business and industry, there are a variety of grant- and loan-based support programs available and – subject to sufficient funding – also accessible for foreign-owned or managed businesses:


UIF TERS – the Minister of the Department of Employment and Labour (“DEL”) announced that applications for the Temporary Employee/Employer Relief Scheme (“TERS”), operated by the Unemployment Insurance Fund (“UIF”), will be extended until 15 August 2020.

SARB GUARANTEED LOAN SCHEME – The Covid-19 loan guarantee scheme announced by President Cyril Ramaphosa in April is in operation since 12 May 2020. The participating banks (Absa, First National Bank, Investec, Mercantile Bank, Nedbank and Standard Bank) are still able to accept loan applications from distressed businesses which bank with them. The scheme has been extended from 3 months to 6 months with eased qualifying conditions.

SMME FUNDING RELIEF – It contains a long-term relief option for entities that produce/supply health care and related products that will be utilised to combat the spread of COVID-19, as well as the local production/supply of essential goods that will be required by the country from a shortage due to the COVID-19 pandemic. A working capital facility will be provided based on the needs of the business at an interest rate of prime less 5%. (Business Growth Strategy) And it also contains a funding option to assist small and medium businesses continue with its operations and retain jobs by providing working capital and other assistance. Businesses may apply for financial or non-financial assistance in order to meet employee, supplier and overhead obligations. This is a soft loan package over a 6-month term from April 2020. The facility is for working capital only provided at an interest rate of prime less 5%, however limited to R 500 000 per SMME subject to certain requirements. (SMME Relief Finance)

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