FOREIGN COMPANIES AND BBBEE

FOREIGN COMPANIES AND BBBEE

BEE Compliance

The general principle is that foreign companies doing business in South Africa either through a registered branch office or through a subsidiary would be subject to BEE legislative and regulatory requirements.

The BEE Act does not contain any specific exemptions for foreign companies doing business in South Africa. If the locally registered foreign company wishes to tender for public sector business or apply for any type of license, concession, or permit from the state, the foreign company’s South African operations would be measured on the same BEE criteria as any other South African company.

In doing business with the private sector, locally registered foreign companies will find themselves under increasing pressure to address BEE targets. Many private sector industries are parties to BEE charters and they need to show that they are procuring goods or services from BEE-compliant firms in order to meet their own targets set out in these charters.

The ownership and control BEE targets are generally the most contentious for foreign companies. Many multinational companies have global policies in place restricting the level of ownership and control that can be transferred to local parties. It is argued that foreign companies can still score highly in BEE by focusing on human resource development and employment equity, affirmative procurement, and social development. There is however increasing pressure on companies doing business in South Africa to focus on meeting BEE ownership and control targets.

Talk to us for more advice.

#matechafrica #BEE #BBBEE #foreigncompanies #foreigncompanysetup #crossborderbusiness #zimsabusiness

 

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