The South African government offers a range of incentives to encourage foreign investment and grow South African business. Foreign companiesmay qualify for various tax incentives, while local companies are able to makeuse of schemes which include export facilitation, development finance andinvestment incentives.

Name	Sector	Description	Objective	Administrator
Accelerated Depreciation Allowance	Manufacturing	Allowance to write off manufacturing asset over 4 years. +40% for cost in first year and + 20% for next 3. Assets acquiredafter 1 March 2002	Promote acquisition of new assets in manufacturing sector	callcentre@idc.co.za
Agro-Industries Development Finance	Agriculture, Food, Beverage and Marine	For business needing minimum of R1 million finance. Loans, equity and quasi-equity and suspensive sales. Competitive andrisk-related interest rate	To promote the expansion of the agriculture and related industries	callcentre@idc.co.za
Assistance by Individual Primary Steel Producers	Steel	Primary steel producers offer price rebate scheme used by exporters of secondary steel products.	Rebates determined between producer and exporter on an individual basis.	saisi@saisi.co.za
Bridging Finance for Contractors and Tenders	All	The finance for those who have firm contracts excluding construction	Promotion of entrepreneurship in South Africa	callcentre@idc.co.za
Business Linkage Challenge Fund	Finance	On bidding basis. Must have private sectorpartner. Projects compete on global basis for available funds. Grants rangefrom £50 000 to £ 1 million	To link businesses to ensure transfer of knowledge, technology, skills, information and market access required forglobal competitiveness of particular benefit to the poor	Deloitte and Touche
Business Loans for Retail Finance Intermediaries	Retail Lending	Loans between R1 and R10 million (less experienced) loans from R5 to R100 million for (more experienced)	To provide finance for RFI to finance	helpline@khula.org.za
Competitiveness Fund	All	50% reimbursive grant up to R600 000 per entity for provision of competitive enhancement services	To increase competitiveness of South African companies in all markets	Competitiveness Fund
Competitiveness Programme	Export	See Guide to Exporting from South Africa for Details
Critical Infrastructure Programme	Infrastructure development	For municipalities and companies constructinginfrastructure. Between 10 – 30% of costs covered.	Promote construction of key infrastructure for industrial development	contactus@thedti.gov.za
Danida Business to Business Programme	Financing	Financial support for the costs of transferring management skills and technology form Denmark to SA. Khula may provide up to100% guarantee for bank loaning money to firm	Create jobs for eligible entrepreneurs. Formation of business partnerships between South Africa and Denmark	helpline@khula.org.za
Depreciation Allowance	Manufacturing, Hotel, Farming	Depreciation rates on new or used assets	Promote investment in assets	callcentre@idc.co.za
Development Finance	Export	See Guide to Exporting from South Africa for Details
Development programme for the textile and clothing industry	Textile/ Clothing	Phase down of ad valorem rates by Sept 2002. Removal of minimum duties	To achieve international competitiveness within sector	contactus@thedti.gov.za
Employee Housing Allowance	All	Tax deduction equal to 50% of the cost of erecting houses available limited to R6000 per house	Promote the building of houses	callcentre@idc.co.za
Employment Promotion Scheme	Job creation	Provides capital up to R100 000 per opportunity	To promote job creation	contactus@thedti.gov.za
Empowerment Finance	Empowerment (All Sectors)	Medium-term finance (loans or equity) for buyouts or leveraged buyouts and strategic equity partnerships. For venturesworth R1 - 100 million	To promote emerging industrialists / entrepreneurs	callcentre@idc.co.za
Entrepreneurial Mining and Beneficiation Finance	Mining, Beneficiation and Jewellery	Finance for business with minimum requirement of R1 million	Expansion and promotion of small and medium mining and jewellery manufacturers	callcentre@idc.co.za
Export Credit Insurance	Export	See Guide to Exporting from South Africa for Details
Export Finance	Export	See Guide to Exporting from South Africa for Details
Export Marketing and Investment Assistance Scheme (EMIA)	Export	See Guide to Exporting from South Africa for Details
Finance for the Textiles, Clothing, Leather and Footwear Industries	Clothing and Textiles	Financial contribution of 35-50% of with minimum financing requirement of R500 000. In the form of loans, suspensive sales andequity.	Development and expansion of textile/clothing sector by providing necessary finance	callcentre@idc.co.za
Financial Deepening Challenge Fund	Financial Services	Covers costs of expansion of financial serviceproducts and extension of services to poor. Cost sharing grant range from£50 000 to £ 1 million	Support financial sector capacity development	Deloitte and Touche
Financing for the Expansion of the Manufacturing Sector	Manufacturing	Minimum of R1 million. Medium-term finance (loans or equity) for buyouts or leveraged buyouts and strategic equitypartnerships.	Development of manufacturing sector through the expansion of manufacturing capacity	contactus@thedti.gov.za
Foreign Investment Grant	Manufacturing (SA company with foreign direct shareholding of minimum 50%)	Grant covering transport costs of machinery from abroad or 15% of value of new machinery. Conditional to SMEDP or SIP approval	Encourage foreign investment in manufacturing sector	smedp@thedti.gov.za
Fund for the Committee on Secondary Manufacture	Manufacturing	Financially supported by primary steel producers.	Aimed at encouraging the use of primary steel in the manufacture of secondary steel products for export.	saisi@saisi.co.za
Industrial Development Zones	Development / Manufacturing / Exports	Excellent infrastructure and streamlined, efficient customs in importation of goods/raw materials used formanufacturing	Promote manufacturing and encourage and improve South African exports	contactus@thedti.gov.za
Innovation Support Programmes	Export	See Guide to Exporting from South Africa for Details
International Tourism Marketing Assistance Scheme	Tourism	Partial compensation of businesses for predetermined costs incurred in promotion of products related to tourism	To promote the marketing of the South African tourism industry	callcentre@idc.co.za
Khula Credit Guarantee	Financing	Provides maximum guarantee of R600 000 over 3years for SMMEs. Firm must have net asset value of at least R2 million and mustmeet bank’s normal lending requirements.	Promote SMMEs and RFI through the provision of guarantees for the securing of bank loans.	helpline@khula.org.za
Khula Equity Fund	All	Available to SMMEs with min. value of R500 000. Proof of viability required	Promotion of SMMEs with potential for growth. Funding of joint ventures and buyouts	helpline@khula.org.za
Khula Start	Rural Community Development	NGOs and CBOs involved in training and varioussmall enterprise activities. Groups of 3 – 10 with loans of R300– R3500 per member	Increase access to micro credit to rural communities in South Africa	helpline@khula.org.za
MIDP –Productive Asset Allowance	Automotive and components	Available to motor vehicle assemblers and component manufacturers is a duty credit calculated to 20% of value ofexpenditure on productive assets. The credit is against import duties and isspread equally over 5 years	To encourage fixed capital investment and rationalisation of model ranges specifically light vehicles.	contactus@thedti.gov.za
Motor Industry Development Programme (MIDP)	Automotive and Components	Import Rebate Credit Certificates based on export performance	To encourage an increase in local content of exported vehicles and components	contactus@thedti.gov.za
Orchards Schemes	Agriculture	Low interest loans granted to those establishing orchards and thus creating jobs	Encourage job creation in the agricultural sector	contactus@thedti.gov.za
Partnership in Industrial Innovation	Manufacturing / Information Technology	Reimbursive grant for up to 50% of development cost of product. Amount based on commercial success of product.	Stimulate industrial research and innovation	spii@idc.co.za
Private Sector Assistance	Export	See Guide to Exporting from South Africa for Details
Research and Development	All	Tax deduction for operating costs related toR&D of 25% of the cost of capital expenditure approved by CSIR	Promote research and innovation	callcentre@idc.co.za
Sector Assistance Scheme (SSAS)	Export	See Guide to Exporting from South Africa for Details
Sector Partnership Fund	Manufacturing and Agro-processing	Grant (max R 1 million) covering up to 65% of preparation costs for technical and marketing programmes	To encourage economic growth and job creation	contactus@thedti.gov.za
Seed Loans for Retail Finance Intermediaries	Retail Lending	Loan of between R50 000 to R20 million. Turned into grant once performance criteria have been agreed upon	Provide finance for the initial establishment and expansion of RFI	helpline@khula.org.za
Skills Support Programme	Training	50% grant of training costs for SMEDP project for up to 30% of annual wage bill.	Assist new and growing companies with training costs	contactus@thedti.gov.za
Small and Medium Enterprise Development Programme (SMEDP)	SMMEs (Manufacturing and Tourism)	Two year cash incentive on qualifying assets and 3rd year if labour requirement is met.	To encourage investment of up to R100 million in small and medium SA companies	contactus@thedti.gov.za
Strategic Industrial Projects	Industry, Technology and Agrotourism	R3 billion available for investors in strategic industrial projects until 2001. Entails tax allowances of between 50 to 100% ofan approved investment	Encourage investment in Maputo Corridor, Gauteng special economic zone and Wild Coast and Fish River.	callcentre@idc.co.za
Strategic Investment Projects (SIP)	Investment	A capital allowance of 50% or 100% of the cost of productive assets to be used within 3 years. Applicable to enterprisesinvesting in projects that exceed R50 million	Encourage investment in important industrial sectors	contactus@thedti.gov.za
Structural Adjustment Programmes for Industry	Export	See Guide to Exporting from South Africa for Details
Support Programme for Industrial Innovation	All Private Sector Entities	Grant of 50% max R.1.5 million/project) of actual direct cost of product development	To encourage development of local innovation	callcentre@idc.co.za
Tax Threshold for Small Businesses	All	SMMEs with annual turnover of less than R3 million eligible for 15% graduated tax rate with taxable income of R150000	Encourage development of SMMEs	callcentre@idc.co.za
Techno-Industry Development Finance	Computers and Communications	Equity or loan finance for companies with minimum financing requirement of R1 million for expansion or new ventures	Development and expansion of IT intensive businesses	callcentre@idc.co.za
Technology and Human Resources for Industry Programme (THRIP)	Organisations involved in Research and Training of Students	Contribution of R1 for every R2 spent on research project of which project and project leader is in higher educationfacility	To increase South African industry’s competitiveness	contactus@thedti.gov.za
Technology for Women in Business (TWIB)	Science / Technology and Engineering and Empowerment	Identification of specific technological needs of women in business	Enhancing accessibility of technology to women in business (esp SMMEs)	contactus@thedti.gov.za
Technology Transfer Guarantee Fund	Technology	90% of the technology transfer transaction costs over five years. Maximum is R1 million	Allowing SMMEs access to loans for acquisition of manufacturing technology	helpline@khula.org.za
The Innovation Fund	Science Biotechnology and Engineering	Grant of R1 – 5 million over three years	Encourage research community towards technical innovation	contactus@thedti.gov.za
The Land Reform Credit Facility	Agriculture	Loans with deferred payments. Available to investors/banks financing land or shares for emerging farmers or farmworkers	Promoting increased access to commercial land. Empowerment and job creation	helpline@khula.org.za
The National Industrial Participation Programme	All	Available to government suppliers with imported content equal to or over $10 million with commitment to further involvement incommunity	Promote the development of South African industry	contactus@thedti.gov.za
Tourism Development Finance	Tourism	Minimum finance requirement of R1 million. Provision of medium-term finance (loan, equity) for upgrading or renovation oftourist facilities	Development and expansion of tourism	callcentre@idc.co.za
Tourism schemes	Tourism	Capital for development of new or existing tourism facilities	Development of tourism especially eco-tourism	contactus@thedti.gov.za
Venture Capital Scheme	All	Capital for products with good growth potential. Package structured in terms of risk and growth potential	To promote product innovation	contactus@thedti.gov.za
Wage Incentive	Education and Training	Available to employers offering approved (National Qualification Framework) learnerships. A tax deduction allowed onconclusion of learnership agreement and further R25000 on successful coursecompletion	To promote employee training	callcentre@idc.co.za
Wholesale Finance	Franchising	Medium term loans (mx 6 yrs) to intermediates who provide strong business record.	Cheap finance to intermediates for loan to individuals	callcentre@idc.co.za
Work Place Challenge	Manpower and Employment	Enhancement of cooperation between workers and management	Aims to improve country’s competitiveness and employment creation	contactus@thedti.gov.za

Resources

Deloitte and Touche

Department of Trade and Industry

Guide to Exporting from South Africa

IDC

Khula

Thrip

Twib

Notes

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