Buying a business in South Africa as a foreigner: what the law asks of you

Can a foreigner buy a business in South Africa?

Generally, yes. South Africa still has exchange control, run by the Financial Surveillance Department of the South African Reserve Bank (SARB, the central bank). Its manual for banks says that non-residents "may freely invest in South Africa", provided the deal is at arm's length, at a fair, market-related price, and financed in an approved way.

A "non-resident" is a person or company whose normal residence, domicile or registration is outside the Common Monetary Area of South Africa, Lesotho, Namibia and eSwatini. South Africa's currency is the rand (ZAR). Auctions on our bidding platform run in rand: bids, deposits and fees. A business offered by private treaty states its own price, and its currency, on its page.

Where foreign buyers meet limits, they are mostly sector rules, covered below. What else is different for you is the exchange control paper trail, tax when you sell, and the visa if you run the business yourself. You will want a South African attorney, a tax adviser and your bank in South Africa. Banks and attorneys are "accountable institutions" under the Financial Intelligence Centre Act, so before they act for you they must establish and verify who you are and, if you act for a company or another person, who that is and your authority (section 21). Have a certified passport copy ready, and the documents of any company you buy through.

Buying from China, India, Namibia, Lesotho or eSwatini, the UAE, the UK or the United States? Each has a guide to what is specific to a buyer there: its tax treaty with South Africa, its own rules and tax at home, visas, and its currency into rand.

Share purchase or going concern purchase

A business changes hands in one of two ways, and the choice shapes everything after it.

• Share purchase. You buy the shares of the company that owns the business. The company stays the employer, the tenant, the licence holder and the taxpayer, so you take on its history, good and bad.
• Going concern (asset) purchase. You buy the business itself, for example through a South African company formed for it: the assets, goodwill, contracts and, by law, the staff. The seller's company keeps its own history.

In a going concern sale, a seller company disposing of all or the greater part of its assets needs a special resolution of its shareholders (Companies Act sections 112 and 115), and the zero rate of VAT needs both parties to be registered VAT vendors: a buyer company not yet registered must have applied before the agreement is concluded, and the registration must then be granted. Section 34 of the Insolvency Act protects the seller's creditors: a trader that transfers its business without publishing notice in the Government Gazette and newspapers 30 to 60 days beforehand makes the transfer void against those creditors for six months. The going concern guide sets out every condition.

The company you buy through

For a going concern purchase you can form a South African private company, a "(Pty) Ltd", registered with the Companies and Intellectual Property Commission (CIPC), the companies registry.

• Foreign directors. CIPC verifies a foreign national's identity through its "foreigner assurance" service, from a certified or notarised passport copy.
• An office in South Africa. Every company and external company must continuously maintain at least one office in South Africa and register its address (section 23(3)).
• Beneficial owners. Companies, including external companies, file their beneficial ownership with CIPC. Anyone with 5% or more must be declared, and a foreign beneficial owner uploads a certified passport copy (CIPC beneficial ownership guidelines).
• Buying in a foreign company's own name. A foreign company must register with CIPC as an "external company" within 20 business days after it first begins to conduct business in South Africa (Companies Act, section 23). It must be regarded as doing so if it is a party to an employment contract here, or if it is engaging in a course of conduct, or has engaged in a course or pattern of activities here over at least six months, that would lead a person reasonably to conclude it intends to keep doing business here. Board meetings, a bank account or an interest in property here do not, on their own, count towards the six-month test (section 23(2) and (2A)). A foreign company buying a going concern directly takes on its staff, and so their contracts.

Bringing the money in: exchange control

For a foreign buyer, exchange control is mostly a paper trail, handled by your bank: the SARB appoints commercial banks as "Authorised Dealers", which can process what its manual permits without referring it to the SARB.

1. Pay in an approved way. Foreign currency brought in, rand from a non-resident rand account in your name, or local borrowing within the limits below.
2. Have the shares endorsed. Shares bought with money received in foreign currency, or paid from a non-resident rand account, are endorsed "non-resident" by the bank. Keep the endorsed certificate and the bank's record of the money arriving.
3. Agree a fair price. The manual puts the onus on the South African buyer or seller of shares to prove the deal was at arm's length and at a fair, market-related price, so an independent valuation helps both sides: see how to value a business in South Africa. Selling to a buyer abroad? See selling your business to a foreign buyer.
4. Clear any loans first. Creating a loan account between a resident and a non-resident needs the Financial Surveillance Department's prior written approval. If you borrow in South Africa yourself, loans to buy shares (listed or unlisted) or property are limited to R1 for every R1 you bring in or own, must be secured by a rand deposit or rand asset, and may not exceed what you have brought in. Other borrowing for a genuine direct investment is not capped this way, and a South African company that is 75% or more foreign owned may borrow without that limit except to buy shares or residential property (SARB manual section I.1). If the seller is to lend you money or leave part of the price unpaid, ask your bank first.

The same records work in reverse: dividends can go abroad in proportion to your shareholding once the bank has proof of tax compliance from the South African Revenue Service (SARS, the tax authority), and sale proceeds are freely transferable. Draft Capital Flow Management Regulations published in April 2026 would replace the 1961 regulations; until they are final, the current rules apply. More in our exchange control guide.

B-BBEE: what changes when the owner is foreign

Broad-Based Black Economic Empowerment (B-BBEE) is South Africa's policy for widening black participation in the economy. A business's B-BBEE level partly reflects its black ownership, so a sale can change it.

The Act works mainly through the state: every organ of state and public entity must apply the B-BBEE codes when it issues licences and other authorisations, in its procurement, and when it awards incentives and grants, among other things (section 10(1)). Before you buy, ask how much of the income depends on the business's level, and whether its black shareholders are part of what is being sold.

• Small businesses. Under the generic codes, a business with annual revenue of R10 million or less is an Exempted Micro Enterprise. It proves its status with a sworn affidavit and is deemed a Level 4 contributor (100% recognition), or Level 2 (125%) if at least 51% black owned and Level 1 (135%, the highest) if wholly black owned (B-BBEE Commission on EMEs). Sector codes set their own limits: under the tourism code as gazetted in 2015, which covers lodges and guest houses, the limit is revenue under R5 million (tourism code, Government Gazette 39430).
• Large empowerment deals. A major B-BBEE transaction, meaning an empowerment ownership transaction, worth R25 million or more must be registered with the B-BBEE Commission within 15 days of being concluded (B-BBEE Commission on registering major transactions (regulation 18)). The Commission says registration is not a pre-approval.
• Fronting is a crime. Knowingly misrepresenting B-BBEE status, or fronting, carries a fine or up to 10 years' imprisonment (for a company, a fine of up to 10% of annual turnover), and a conviction bars business with the state for 10 years (B-BBEE Act, sections 13O and 13P).

More on the tourism code in buying a lodge or guest house.

Sectors with their own ownership rules

Rules to check, depending on the business:

• Commercial broadcasting. A foreigner may not, directly or indirectly, control a commercial broadcasting licensee or hold more than 20% of its financial interest, voting shares or paid-up capital, and no more than 20% of its directors may be foreigners (Electronic Communications Act, section 64).
• Telecoms licences. An individual licence under the same Act may not be let, sub-let, assigned, ceded or transferred, and control of it may not be transferred, without the prior written permission of ICASA, the communications regulator (section 13(1), as amended in 2014). So a share purchase that changes who controls a licensee needs that permission too. The Act also lets ICASA limit the ownership or control of individual licences by regulation, to promote ownership by historically disadvantaged groups (section 13(3)): ask your attorney what its current ownership rules require.
• Mining. A prospecting or mining right, an interest in one, or a controlling interest in a company or close corporation, may not be transferred or disposed of without the Minister's written consent, except a change of controlling interest in a listed company (Mineral and Petroleum Resources Development Act, section 11(1)).
• Private security. A security business can be registered with PSIRA, the industry regulator, only if every director and everyone performing executive or managing functions is registered too, and a person can register only as a South African citizen or permanent resident (Private Security Industry Regulation Act 56 of 2001, sections 20(2) and 23(1)(a) and (2)(a)). A foreign owner without permanent residence cannot be a director or manager.
• Businesses that cannot support a business visa. No business visa may be issued or renewed for the security industry, the exotic entertainment industry, or businesses importing second-hand vehicles for export (Immigration Act section 15(1A); the Minister of Home Affairs' list in GN 561 of 2014).
• Other licences. Liquor licences, permits and registrations in the seller's name: check each with whoever issued it.

Does the Competition Commission need to approve it?

Acquiring control of a business is a "merger" under section 12 of the Competition Act, whatever its size. Only intermediate and large mergers must be notified and approved before they are implemented. From 1 May 2026 (GN 7458, Government Gazette 54640):

Below either lower figure it is a small merger: there is no mandatory notification, but the Commission may require one within six months after implementation (small merger guidelines) if it believes the deal may substantially prevent or lessen competition, or cannot be justified on public interest grounds.

The Commission's small merger guidelines still ask to be told in writing before some small mergers are implemented: where any party, or a firm in its group, is under a Commission investigation or is a respondent in proceedings the Commission has referred to the Competition Tribunal, and where the buyer alone exceeds the large-merger combined threshold and the price exceeds the large-merger threshold for the business being bought. A large foreign group buying a smaller South African business can fall into the second case. Your attorney confirms which applies.

Tax: when you buy, own and sell

When you buy

A share purchase attracts securities transfer tax of 0.25% (SARS: securities transfer tax); for unlisted shares the company is liable to SARS but may recover the tax from you, the buyer, and you must tell the company of the transfer within 30 days. If more than half the company's assets, by value, are residential property, the shares also count as property for transfer duty; your conveyancer will check. A going concern purchase carries VAT at 0% or the standard 15% (SARS: VAT) as above, and transfer duty on any land only where the sale is not subject to VAT.

While you own it

A South African company pays income tax at 27% for years of assessment ending on or after 31 March 2023 (SARS: company tax rates). Its dividends carry dividends tax of 20%, in force since 22 February 2017, withheld when paid (SARS: dividends tax). A foreign shareholder may qualify for a lower treaty rate by completing SARS's declaration and undertaking for the paying company, which SARS says may be valid for only five years.

When you sell

According to SARS's capital gains tax guide, while you remain non-resident you pay South African capital gains tax only on immovable property here, or an interest in it, and on assets of a permanent establishment here. Shares count as an interest in immovable property if 80% or more of their value comes from South African immovable property and you, with connected persons, hold at least 20%. When a non-resident sells such property for more than R2 million, the buyer must withhold 7.5% (individual), 10% (company) or 15% (trust) as an advance payment of the seller's tax, unless SARS issues a directive for less (SARS: section 35A withholding; rates as at 30 September 2026 in SARS, Taxation in South Africa 2026, section 2.15). Tax treaties can change the result, so take advice in both countries.

Your staff: section 197

In a going concern purchase, section 197 of the Labour Relations Act makes the buyer the employer automatically, unless otherwise agreed in writing with the employees' representatives. Contracts continue on the same terms, or terms on the whole not less favourable, and a dismissal because of the transfer is automatically unfair. Seller and buyer must agree the value of accrued leave and severance pay, and who pays it. In a share purchase the company stays the employer. The going concern guide covers section 197 in full.

Visas if you want to live here and run it

To move here and run the business, the visa designed for it is the business visa (Immigration Act section 15), for a foreigner who intends to establish or invest in a business here in which they may be employed.

• The investment. The Minister of Home Affairs has set it at R5 million in cash originating from outside South Africa; any capital contribution must be new machinery or equipment. The Act also requires the contribution to form part of the intended book value of the business (section 15(1)(b)). Money you pay a seller for existing shares goes to the seller, not into the business, so agree with an immigration attorney how your investment will be made before you sign. The Director-General may reduce or waive the amount for businesses in the national interest, or when the Department of Trade, Industry and Competition (the dtic) asks.
• The application. An accountant's certificate that the money is available or invested, proof that at least 60% of the staff are permanently employed South African citizens or permanent residents, registration with SARS and the other bodies listed, and a dtic letter of recommendation (business visa requirements).
• Afterwards. The visa is issued for up to three years at a time; you must prove the investment within 24 months and every two years after that, and may not do other work (business visa requirements).

Living here changes your position in two ways. For tax, you become a South African resident once you are ordinarily resident here or meet the physical presence test (more than 91 days in the current tax year and in each of the five before it, and more than 915 days in those five years), and a resident is subject to capital gains tax on the disposal of any asset, in or outside South Africa, including the business when you sell it (SARS capital gains tax guide, sections 4.2 and 6.3.9). For exchange control, a foreign national living here other than on a temporary visit must declare any foreign assets to a bank on arrival, and may then bank as a resident, although your interests in South African companies still count as non-resident for local borrowing (SARB manual section B.5). Take tax advice in both countries before you move.

Cabinet approved a revised immigration White Paper in April 2026; Home Affairs will now draft amending legislation, and until the law changes these rules apply. See our business visa guide.

Step by step: buying through Dynamic Business Sales

1. Find the business. Businesses for sale lists what we are offering; confidential listings do not name the business. Tell us what you are looking for by email or WhatsApp; our office works in South African Standard Time (UTC+2): see international buyers.
2. Sign the non-disclosure agreement (NDA). You sign it before you receive the information pack and, in a private sale, before you learn the business's name. A business sold on public auction may be named in the catalogue; the NDA then protects the information pack and the books.
3. Show you can fund it. Buyers show proof of funds before they see the books; settle with your bank by then how the money will come in.
4. Due diligence. Your attorney, tax adviser and bank work through this guide's points; our due diligence checklist lists the documents to ask for.
5. Offer or bid. By private treaty (a negotiated sale to one buyer), or on auction with a reserve (the seller's minimum price: see the reserve price explained). If you are buying through a South African company, form it first and register to bid in its name, with its registration documents and a board resolution authorising you; if you want the VAT zero rate, the company must be registered for VAT, or have applied, before you bid. Online and webcast auctions can be bid on from wherever you are, and a non-citizen opens an account in our online auction room with a passport number. Like every bidder, you then upload your FICA documents and register for that auction, and you can bid only once that registration is approved, so start early and ask us well before the registration deadline whether the documents you hold will do: see how to register and bid online.
6. Sign, pay and take over. The agreement or the conditions of sale set the deposit, any buyer's commission and when the balance is due: read them before you bid (see the buyer's premium explained). On our auctions these are in rand, so settle with your bank before auction day how you will pay them on time. Your bank receives the money and endorses any shares, and the business is handed over trading.

Businesses reach the auction room too: in September 2026 we auctioned the CMVAS Group both as separate businesses and as a whole, the whole group as one lot through a sale of all its shares, with bidding on site, online and by webcast (the CMVAS auctions). See also the confidential business sale process and international buyers.

Selling a South African business? Dynamic Business Sales, the Dynamic Auctioneers division that sells trading businesses as going concerns, offers it to buyers in South Africa and abroad.