Seek Business Incentives through Investment Support Programmes funded by the Department of Trade and Industry
The South African government provides a number of fiscal and non-fiscal incentives for business enterprises that are both domestically and foreign-owned, as part of its drive to attract more investment into targeted areas of the economy.
Production Incentives (PI) government grants are provided by the Clothing and Textile Competitiveness Programme (CTCP), implemented by the Department of Trade and Industry (DTI), for the facilitation of customized sector programmes (CSPs) for the clothing, textiles, leather, leather goods and footwear industries.
Known as the Automotive Investment Scheme (AIS), these business incentives are targeted towards growing and developing the automotive sector through investment in technologically-advanced automotive production and investment. AIS business incentives provide for a taxable cash grant of 20% of the value of qualifying investment in productive assets, as approved by the Department of Trade and Industry (the DTI). An additional taxable cash grant of 10% of the value of qualifying investment in productive assets may be available to ‘strategic projects’, which must achieve two economic benefit requirements, as outlined in the AIS Guidelines.
Small Medium Manufacturing Enterprise Development Programme
Tax-free business incentives are available to small and medium enterprises under the SMEDP (Small and Medium Enterprise Development Programme). Targeted towards entities that are planning to undertake new projects or expanded ongoing projects in the following sectors; tourism, manufacturing, communication technology, agro-processing, recycling, high-value agricultural projects, aqua-cultural, bio-technology industries and cultural industries.
Foreign Direct Investment business incentives are geared towards attracting foreign investors to start up manufacturing businesses in South Africa. Also known as the Foreign Investment Grant (FIG), qualifying entrepreneurs are compensated under the conditions of the scheme for costs related to the relocation of equipment and machinery (not including vehicles) essential to the operations of their business. The FDI will compensate foreign investors for up to 15% of costs incurred during the transportation of essential equipment from abroad, up to a maximum amount of R3 million per business entity.