How to Set Up an Entity in South Africa

South Africa is the continent’s most industrialized economy and a strategic gateway to broader African markets, with well-developed infrastructure and established legal frameworks that appeal to international investors and businesses alike. The country’s diverse economy, strong commercial ecosystem, and trade links make it an attractive destination for entities looking to expand into Africa.

While setting up a legal entity in South Africa is generally manageable, businesses should expect to navigate several administrative and regulatory requirements. These include formal registration steps, tax onboarding, payroll setup, and ongoing compliance obligations, all of which can affect timelines if documentation or approvals are delayed. Despite these challenges, establishing a local entity offers significant advantages: limited liability protection, greater operational autonomy, direct access to the South African market, and increased credibility with customers, employees, and financial institutions.

Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or financial advice. Always consult official sources before acting.

What does “opening an entity” mean in South Africa?

“Opening an entity” in South Africa involves forming a legally recognized business structure that has its own legal personality, distinct from its owners. This process enables the business to operate commercially, enter into contracts, hire employees, and meet tax and regulatory obligations.

Entity overview in South Africa

Here is a summary of the key features of company formation in South Africa:

Step-by-step guide: How to open an entity in South Africa

Step 1: Choose the right structure

In South Africa, the most common entity for foreign and local investors is a Private Company (Pty) Ltd, which shields owners from personal liability and supports scalable operations. Other structures include Public Companies (Ltd) for larger ventures that may access public investment, and Non-Profit Companies (NPCs) for mission-driven organisations. Sole proprietorships and partnerships also exist, but do not separate personal and business liability.

Step 2: Verify business name availability

Use the official CIPC BizPortal platform to check and reserve a unique company name before incorporation. BizPortal supports digital name reservation and registration. Choose a name that complies with naming rules (e.g., must not infringe trademarks or be misleading).

Step 3: Prepare incorporation documents

You must compile the following:

• Notice of Incorporation (CoR14.1) — basic company details and information
• Memorandum of Incorporation (MOI) — outlines governance rules
• Certified ID or passport copies for directors
• Proof of registered office address in South Africa

Many forms and templates are available via the CIPC e-services portal on BizPortal.

Step 4: Register with CIPC

Submit your incorporation documents and the reserved name request through BizPortal, or engage a professional agent. Once approved, CIPC issues a Certificate of Incorporation and company registration number, confirming the company’s legal existence.

Step 5: Register for tax and social security

After CIPC registration, the South African Revenue Service (SARS) issues an Income Tax reference number automatically. Register for VAT if turnover exceeds R1 million, and for employer taxes such as PAYE, UIF, and SDL through SARS eFiling.

Step 6: Open a corporate bank account

With your Certificate of Incorporation, MOI, and tax number, open a corporate account at a local bank. Banks will also require proof of the directors’ identities and business addresses. South African banking is not mandatory for all entities, but it is standard for operational needs; remote setup can be more complex.

Step 7: Set up payroll and employment compliance

To hire, register the company as an employer with SARS for PAYE, UIF, and SDL. Draft compliant contracts aligned with South African labour law, and ensure payroll systems capture statutory contributions and reporting.

Discover how Elemental Enzymes accelerated regulatory approvals and market entry with Deel.

Post-registration obligations

Once registered, companies in South Africa must stay compliant with governance, tax, and employment laws. Typical requirements include:

• Tax and financial reporting: File annual returns and tax submissions with SARS via eFiling, including provisional tax and VAT returns as applicable
• Corporate registers: Maintain updated records of directors, shareholders, and beneficial owners. Report changes to CIPC within the required timeframes
• Compliance tracking: Monitor deadlines for CIPC annual returns and tax filings with a compliance calendar or service provider
• Licenses and renewals: Renew industry-specific licenses with relevant ministries or municipal bodies
• Recordkeeping: Retain accounting, payroll, and transaction records for the legally mandated period, generally several years
• Employment law compliance: Uphold labour, benefits, and data protection requirements in employment practices.

Taxes and financial considerations

You are responsible for:

• Corporate income tax: The standard corporate tax rate is approximately 28% on taxable profits
• VAT: Standard rate is 15%, mandatory if annual turnover exceeds R1 million
• Payroll/social contributions: Employers must register for and remit PAYE, UIF, and SDL contributions
• Accounting standards: South African companies typically report under IFRS or the national GAAP framework aligned with IFRS for SMEs

Discover how Climate-KIC navigated complex restructuring with Deel.

Expand internationally with Deel

Whether you’re hiring through an EOR or establishing your own local entity, Deel’s all-in-one platform gives you everything you need to expand into the United Kingdom—quickly, compliantly, and with confidence. From market entry to ongoing operations, Deel helps you hire, onboard, and manage teams seamlessly from day one.

With Deel, you can:

• Test new regions using Deel’s local entities through our Employer of Record service—hire employees compliantly, delegate payroll and taxes, and access localized employment contracts.
• Open entities with Deel Entity Setup, where our team manages everything—from incorporation and tax registration to coordination with local experts.
• Centralize your compliance and records with Deel Entity Management, including automated filings, calendar reminders, and visibility across all entities.
• Integrate with Deel Payroll and Deel HR for compliant payments, benefits, and workforce oversight—all in one platform.

For companies transitioning from the EOR model to owned entities, Deel ensures a smooth handover and consistent compliance every step of the way. Enter new markets, onboard talent, and manage your global workforce—all through one unified platform.

FAQs

How long does it take to open an entity in South Africa?
Typically 2–4 weeks, depending on documentation and processing speeds. Find out how long setup takes with our Entity Setup Calculator.

What is the minimum capital required?
There is no statutory minimum capital requirement for most companies.

Can foreign companies own 100% of an entity in South Africa?
Yes, 100% foreign ownership is permitted for most entity types.

Do I need a local director or representative?
No local director is required, but a public officer resident in South Africa must be appointed.

How much does it cost to register an entity?
Registration fees typically start from around R125–R475+ (plus additional service and professional fees). Find out the setup cost with our Entity Setup Calculator.

Can I hire employees before the entity is fully registered?
Typically, no. However, Deel’s Employer of Record (EOR) lets you hire and pay talent immediately while your entity setup is in progress.

Can Deel help me open an entity in South Africa?
Yes. Deel Entity Setup manages the end-to-end process — from registration to payroll compliance—in over 100 countries. Deel’s local experts handle documentation, filings, and legal requirements on your behalf.

Does Deel offer ongoing compliance and payroll support?
Yes. Deel offers both managed services and self-service tools to help you stay compliant.

If you’re using Deel Entity Management, Maintenance, EOR, or Payroll, our team handles payroll, benefits, filings, and compliance obligations on your behalf.

For teams managing their own entities, Deel Compliance Hub makes staying compliant simple by providing real-time regulatory updates, risk alerts, and workforce insights across 150+ countries. Proactively manage compliance with our Compliance Monitor, Workforce Insights, and an AI-powered Worker Classifier, staying ahead of changing employment laws.

Can I switch from Deel EOR to my own entity later?
Yes. Deel supports seamless transitions when you’re ready.