Features of using a tax-exempt company in South Africa
The Republic of South Africa is a multinational state combining African, European, Asian and other world cultures and nationalities. The country occupies a leading economic position in Africa and is the only representative of the continent in G20. Contrary to the widespread belief that all African countries are in economic decline, South Africa demonstrates a high level of economic and political stability and has successfully overcome global crises.

To build an effective business, it is necessary to choose a jurisdiction with minimum tax burden. The South African market is one of the most suitable options in this context.

In recent years, foreign entrepreneurs have been willing to open their own companies in South Africa, as the state provides foreign investors with favorable business conditions. The Republic signed 80 DTTs.

Establishing a company in South Africa is advantageous because the country offers low tax burden. For this reason, South African companies are used by foreign entrepreneurs for holding, exporting and importing goods, service and consulting businesses.
If you plan to open a company in South Africa to conduct business outside the country or a holding company, then such a company will not be subject to taxation. However, directors are required to provide a report that the company's activities are not carried out in the Republic.
In fact, South African companies that do not operate in the country, as well as holding companies, are inherently not subject to taxes within the country. If a company does not operate in South Africa, it is not required to pay profit taxes, although still must submit a non-operation report in the Republic.

The following organizational and legal forms can be registered in South Africa:
  • 1
    Sole Proprietorship
  • 2
  • 3
    Private Companies
  • 4
    Public Companies
  • 5
    Personal Liability Companies
  • 6
    State Owned Companies
  • 7
    Non-profit Companies
  • 8
    Foreign and External Companies
Private Companies are the most popular legal form in South Africa.
Private Companies mean public PTY (Proprietary Limited). The company name must contain “Proprietary Limited” or “PTY Limited”.

Typically, Proprietary Limited companies are involved in the export and import of goods and delivery of services. This form of company can be used to do business with EU countries, since when making transactions there are no problems with paying VAT.

PTY must have at least one shareholder and at least one director. Only an individual can be a director. The shareholder and director can be the same person, if the shareholder is an individual.
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