Having all visa/permit options and associated facts on which to base your decision for your move to South Africa is one of the most important things for any migrant to get right from the onset, as it not only saves you money but your time as well. It is not always the most obvious solution that is the best solution.
For the financially independent person, questions have arisen as to why it would be more advantageous to have the Financially Independent Permit over the Business Visa, because clearly a person of high net worth would meet the financial threshold for a Business Visa as well.
It is important to note that apart from the minimum investment amount of R5 million required for a Business Visa, there are other requirements that need to be met, and depending on the nature of your move to South Africa, the timeframe for the move as well as your long-term plans, the Business Visa might not necessarily be the best option for you. A holistic approach needs to be adopted to ensure that you choose the correct visa/permit that meets your immediate as well as long-term plans for your migration to South Africa.
VISA OPTIONS FOR PROSPECTIVE FOREIGN BUSINESS OWNERS/INVESTORS
BUSINESS VISA
This is a temporary residence visa issued for a specified period allowing one to invest in an existing business or start up a new business in South Africa.
As it is a temporary visa, it means that it needs to be renewed for your continued stay and operation of your business in South Africa, thereby adding pressure on you to comply with all the requirements each time you apply for the renewal of the visa. You also cannot easily access long-term loans buy property for example and there is no security for long term investment in South Africa until such time you have obtained permanent residency.
FINANCIALLY INDEPENDENT PERMIT
This is a permanent residence permit which allows the holder to commence a business, invest in an existing business and/or invest in South Africa, plus a host of other benefits not necessarily requiring you to invest in a business activity.
The table below best describes the distinct difference between these two visa types and in the same vein, why it would be more advantageous to have the Financially Independent Permit over the Business Visa.
| Requirement | Financially Independent Permit | Business Visa |
|---|---|---|
| Net-worth amount | R12 million No requirement for this to be brought into or originate in South Africa | Nil. Minimum of R5 million needed for investment into a new/existing business in South Africa. The money must be invested in a business to be established or in an existing business in South Africa, therefore cannot be a simple savings account. If not cash, an equivalent capital contribution that comprises of new machinery and or equipment and or cash. |
| Investment amount | Nil No investment required in South Africa | R5 million Minimum investment is required to be made into the business within a 2-year period of obtaining the visa. Source of these funds must be from outside of South Africa. |
| Fees | R120 000 to the Department of Home Affairs once permit is approved | Normal Home Affairs (R1 520) and VFS Fees(R1 350) * *Or equivalent in the currency of the country of submission |
| Permanent residency | Yes Direct residence status | Yes, but need to obtain the temporary residence business visa initially |
| Employee obligations | None | At least 60% South African citizens/permanent residents to be employed |
| Business plan | Not required | Must be submitted with applications for both temporary and permanent residence |
| Other requirements | None | Business must be prescribed as a desirable business activity Department of Trade and Industry recommendation required Undertakings to the South African Revenue Service (SARS), Unemployment Insurance Fund (UIF), Compensation Fund for Occupational Injuries and Diseases (COID), Companies and Intellectual Properties Commissioner (CIPC) and a relevant professional body, board or council where this is a requirement. An ongoing requirement to prove that the business is still viable and adhering to the conditions of its granting |
Despite the above requirements which portray the Financially Independent Permit as being less complex and therefore more advantageous, other applicants still opt for the Business Visa because:
- A Financially Independent Permit is for permanent residency, and in most cases the process takes longer (minimum processing time of 12 months) than a Business Visa which initially requires a temporary residence visa application as well (approximately 6 to 12 months for the temporary visa). Therefore, if time is a huge factor, then a Financially Independent Permit may not be appropriate. One could possibly also consider other visa options that could relieve the time pressure.
- Costs – A business visa does work out cheaper than a Financially Independent permit, in that the investment amount of R5 million is way less than the minimum net worth of R12 million required for the Financially Independent Permit. The additional R120 000 required for the Financially Independent is not a requirement for the Business Visa.
