Links
Industrial Development Finance and Incentives
DEPARTMENT OF TRADE AND INDUSTRY
Business Process Outsourcing (BPO) & Off-shoring
The BPO incentive programme is one of the elements of a holistic value
proposition to position South Africa as a preferred location for BPO&O
operations, alongside the sector skills development initiatives, a dedicated
investor-friendly set up process, and a programme to improve industry service
standards.
Objectives
The objective of the incentive is to attract
BPO&O investments that create employment opportunities.
What the Scheme Offers
The BPO&O Investment Incentive
comprises an Investment Grant ranging between R37 000 and R60 000 per seat and
a Training Support Grant towards costs of company specific training up to a
maximum of R12 000 per agent.
Who Benefits/is Eligible
The incentive is offered to local and
foreign investors establishing projects that aim primarily to serve offshore
clients.
The dti determines whether an applying project is eligible to benefit
from the incentive on the basis that:
- A project may involve starting a new operation or expanding an
existing one to perform business process outsourcing and off-shoring
activities; and can include more than one physical location.
- The investment project must, by the end of its second year in
operation be adding to the South African productive capacity for BPO&O to
an extent that it will establish an operation of at least 100 seats, and be
creating at least 200 additional jobs, defined as full-time equivalents of
'agents' directly working on the project.
- The investment project must commence its commercial operations within
one year from envisaged date of BPO Incentive grant approval.
- The investment project can be a cost center of an existing operation,
a branch of an existing entity, a joint venture between entities. In a joint
venture arrangement at least one of the parties must be registered in South
Africa as a legal entity.
- The investment project must operate activities classifiable as that
of business process outsourcing and off-shoring and must generate at least 90%
of its revenue from activities that service offshore clients.
- Projects locating in a Designated Area will be excluded from the 90%
off-shoring requirements mentioned above.
Contact for Applications
Programme manager:
Ms Karin Liebenberg
Tel: 012 394 1057 or
e-mail: kliebenberg@thedti.gov.za
Capital Projects Feasibility Programme (CPFP)
The incentive is a cost-sharing programme providing a contribution to
the cost of feasibility studies that are likely to lead to projects outside
South Africa that will increase local exports and stimulate the market for
South African capital goods and services.
Objectives:
The primary objective is:
- to facilitate feasibility studies that are likely to lead to projects
that will increase SA exports and stimulate the growth of the local capital
goods and services sector and allied industries.
The secondary objectives include:
- attracting higher levels of domestic and foreign investment
- strengthening the international competitiveness of South African
businesses
- the creation of jobs in South Africa
- the stimulation of project development in Africa and in particular
the Southern Africa Development Community (SADC) countries
- support for the objectives of the new Partnership for Africa's
Development.
- promoting linkages with and development of small, medium and micro
enterprises and black economic empowerment business
What the Scheme Offers:
- the programme's contribution is in the form of a cost sharing grant
up to a maximum of 50% of study costs for feasibility studies outside Africa
and 55% in Africa
- the size of the grant falls within the range of R100 000 to R5
million.
Who Benefits/is Eligible:
Feasibility Study and Feasibility
Study Promoter Criteria: Studies that fulfil the following criteria will be
eligible to apply for a grant through the programme;
- Studies must be undertaken by South African companies
- Although it should be aimed at achieving local content of 50% in the
feasibility study and project in terms of goods and professional services, this
percentage will remain at the discretion of the Adjudication Committee.
Project Criteria: The project must fulfil the following non-financial
criteria:
- New projects, expansion of existing projects and rehabilitation of
existing projects
- All capital goods sectors are eligible for programme funding
- The project that is anticipated to lead from the study must fulfill
the objectives of the programme
- The minimum local content of the project should be 50%, but in cases
where this is not achieved, the application will be evaluated as described in
the programme guidelines
- Projects can be situated anywhere in the world (excluding South
Africa), while projects in Africa will be encouraged
- The project must have an adequate chance of being declared a success.
Contact for Applications:
BDU officials:
Ms Rosina Mothiba or Ms. Grace Nchabeleng
Tel: 012 394 3648 or 012 394 1115
e-mail: rmothiba@thedti.gov.za or gnchabeleng@thedti.gov.za
Programme Manager:
Mr. Donald Mabusela
Tel: 012 394 1716 or
email: dmabusela@thedti.gov.za
Critical Infrastructure Programme (CIP)
The Critical Infrastructure Programme (CIP) is a non-refundable, cash
grant that is available to the approved beneficiary upon the completion of the
infrastructure project. The scheme covers between 10% and 30% of the total
development costs of the qualifying infrastructure.
The infrastructure for which funds are required is deemed to be
'critical' if the investment would not take place:
- Without the CIP funding contribution;
- If the infrastructure projects would be executed without the CIP
contribution;
- It can be proven that it would be of a smaller scale or lower
quality;
- Or would be established at a later stage than the period than when it
was intended.
Objectives:
The CIP is an incentive for projects that support
infrastructure necessary for the establishment of investment projects. The key
objectives of the programme are to:
- Support the competitiveness of South African industries by lowering
business costs and risks.
- Provide targeted financial support for physical infrastructure that
will leverage strategic investment with positive impact on the economy.
- Stimulate upstream and downstream linkages, taking into account
government priorities such as growth and employment, BEE, Integrated Rural
Development, Urban Renewal Strategies and Spatial Development.
The CIP supports only the construction of the infrastructure that
enables the investment project or the expansion of existing fixed investment.
Under no circumstances will the CIP fund the investment itself unless the
infrastructure is itself the investment.
What the Scheme Offers:
The approved beneficiary will be
reimbursed in two phases upon receipt of such claims from the entity. The
approved amount to be claimed in each of the phases will be determined by the
beneficiary.
Contact for Applications:
BDU officials:
Ms Rosina Mothiba or Ms. Grace Nchabeleng
Tel: 012 394 3648 or 012 394 1115
e-mail: rmothiba@thedti.gov.za or gnchabeleng@thedti.gov.za
Programme Manager:
Mr. Justice Ngwenya
Tel: 012 394 1271 or
email: jnwgenya@thedti.gov.za
Co-operative Incentive Scheme (CIS)
The Co-operative Incentive Scheme is a 90:10 matching cash grant for
registered co-operatives. The maximum grant that can be offered to one
co-operative entity under the scheme is R300 000. This is an incentive for
cooperative enterprises in the emerging economy to acquire competitive business
development services.
Objectives:
Promote co-operatives through the provision of a
matching grant.
Improve the viability and competitiveness of co-operative
enterprises by lowering the cost of doing business.
Assist co-operatives to
acquire their start up requirements.
Build an initial asset base for
emerging co-operatives to enable them to leverage other support.
Provide an
incentive that supports broad-based black economic empowerment.
What the Scheme Offers:
Business development services
Business profile development
Feasibility studies / market research
Production efficiency
Technological improvement projects
Plants and
machinery
Start-up requirements
Working capital requirements
Who Benefits/is Eligible:
Eligible entities should:
- Be incorporated and registered in South Africa in terms of the
Co-operatives Act of 1991;
- Be operating or will operate in the emerging sector;
- Adhere to co-operative principles;
- Be an emerging co-operative owned by historically disadvantaged
individuals;
- Be rural and semi-urban biased;
- Be biased towards women, youth and people with disabilities.
Contact for Applications:
BDU officials:
Ms Rosina Mothiba or Ms. Grace Nchabeleng
Tel: 012 394 3648 or 012 394 1115
e-mail: rmothiba@thedti.gov.za or gnchabeleng@thedti.gov.za
Programme Manager:
Mr. Donald Mabusela
Tel: 012 394 1716 or
e-mail : dmabusela@thedti.gov.za
Enterprise Investment Programme (EIP)
Manufacturing Investment Programme [MIP]
The MIP is an
investment incentive designed to stimulate investment growth in line with the
South African government's National Industrial Policy Framework.
Objectives:
- To stimulate investment within the manufacturing industry. Qualifying
investment costs would comprise machinery, equipment, land and buildings, and
commercial vehicles.
- To enhance the sustainability of manufacturing investment projects by
small enterprises and to support large-to medium-sized investment projects in
manufacturing that would otherwise not be established without the grant.
- What the Scheme Offers:
The MIP provides investment support
to both local and foreign owned enterprises.
- The MIP offers an investment grant of up to 30% of the value of
qualifying investment costs in machinery, equipment, commercial vehicles, land
and buildings, required for establishing a new production facility; expanding
an existing production facility; or upgrading production capability in an
existing clothing and textile production facility.
- Investment projects of R5 million and below may qualify for an
investment grant equal to 30% of their total qualifying investment cost,
payable over a three year period.
- Investment projects of above R5m may qualify for an investment grant
of between 15% and 30% of their qualifying investment costs, and payable over a
two year period
- The investment grant cannot exceed R30 million.
Foreign investment projects may qualify for an additional grant for the
cost of transporting their qualifying machinery and equipment to South Africa.
The additional grant is the lower of 15% of the value of qualifying imported
machinery and equipment or the actual transport costs of relocating qualifying
new machinery and equipment from abroad to a maximum of R10 million.
Who Benefits/is Eligible:
- The applicant must be a registered legal entity in South Africa in
terms of the Company Act, 173 (as amended); Close Corporation Act, 1984 (as
amended) and the Co-operatives Act, 205 (as amended)
- Projects must be classified as manufacturing (SIC code 3) in terms of
the Standard Industrial Classification of all economic activities
- Small Projects (investment projects of R5m and below)
- Medium-to-Large Projects (investment projects of above R5m). The cost
of the qualifying investment in machinery, land and buildings, and commercial
vehicles will be capped at R200 million
Contact for Applications:
BDU officials:
Ms Rosina Mothiba or Ms. Grace Nchabeleng
Tel: 012 394 3648 or 012 394 1115
e-mail: rmothiba@thedti.gov.za or gnchabeleng@thedti.gov.za
Programme Manager:
Ms Magdeline Thwala
012 394 1089
mthwala@thedti.gov.za
Export Marketing and Investment Assistance (EMIA)
The EMIA scheme develops export markets for South African products &
services and to recruit new foreign direct investment into the country
Objectives:
The purpose of assistance under the EMIA scheme is
to partially compensate exporters for costs incurred in respect of activities
aimed at developing export markets for South African products & services
and to recruit new foreign direct investment into South Africa.
What the Scheme Offers:
- Individual Participation Incentive Schemes
- Individual Exhibition Participation: exhibition costs, including
rental of exhibition space, construction of stand, interpretation fees,
internet connection, telephone installation and registration fees up to a
maximum of R45 000
- Primary Market Research & Foreign Direct Investment:
exporters will be compensated for costs incurred recruiting new Foreign Direct
Investment into South Africa through personal contact by visiting potential
investors in foreign countries
- Individual Inward Missions: assistance under this scheme is
extended towards capacity building and skills transfer.
- Group Participation Incentive Schemes (Group Inward Buying &
Group Inward Investment Missions, National Pavilions, Outward Selling Mission
Assistance & Outward Investment Mission Assistance)
Who Benefits/is Eligible:
The following enterprises qualify
for assistance on condition that have been operating and trading for more than
one financial year:
- South African product manufacturers;
- South African export trading houses representing at least three SMMEs
or HDI owned businesses;
- South African commission agents representing at least three SMMEs or
HDI owned businesses;
- South African Export Councils, Industry Associations and Joint Action
Groups representing at least five South African entities.
Entities in the following service sectors:
- Capital equipment services;
- Consulting engineering services;
- Civil engineering contractors;
- Film production;
- Pre-qualified Tourism services, only for Investment purposes
excluding real estate agents;
- Pre-qualified ICT services; Business Process Outsourcing services.
Contact for Applications:
BDU officials:
Ms Rosina Mothiba or Ms. Grace Nchabeleng
Tel: 012 394 3648 or 012 394 1115
e-mail: rmothiba@thedti.gov.za or gnchabeleng@thedti.gov.za
Programme Manager:
Mr. Donald Mabusela
Tel: 012 394 1716 or
e-mail : dmabusela@thedti.gov.za
Sector Specific Assistance Scheme (SSAS)
The Sector Specific Assistance is a reimbursable 80:20 cost-sharing
grant scheme whereby financial support is granted to Export Councils, Joint
Action Groups and Industry Associations. The Sector Specific Assistance Scheme
comprises Project Funding and Generic Funding.
Objectives:
The aims of the SSAS are to achieve the dti's
overall objective to:
- Develop an industry sector as a whole
- Develop new export markets
- Stimulate job creation
- Broaden the export base
- Propose solutions to factors inhibiting export growth
- Promote broader participation of black owned SMMEs to the economy
What the Scheme Offers:
- Export development costs such as market research, consultancy fees
and other expenses
- Export promotion costs such as consultancy fees and other
expenses
- Product development costs such as consultancy fees and other
expenses
- Company development costs such as consultancy fees and expenses
towards installing or improving Quality Management Systems
- Service development such as consultancy fees and other expenses
- Advertising and publicity (international).
Who Benefits/is Eligible:
Qualifying sectors include:
Chemical and allied industries
- An applicant who receives funding from the dti cannot apply for this
financial.
- An eligible industry must be a registered tax-paying entity or
non-profit organisation.
- Activities of entities seeking SSAS incentive should fall within the
South African industry sectors or sub-sectors prioritised for development and
promotion by the dti.
- Industries applying for the incentive should be distinct and
independent with regard to their operations and ownership.
Contact for Applications:
BDU officials:
Ms Rosina Mothiba or Ms. Grace Nchabeleng
Tel: 012 394 3648 or 012 394 1115
e-mail: rmothiba@thedti.gov.za or gnchabeleng@thedti.gov.za
Programme Manager:
Mr. Donald Mabusela
Tel: 012 394 1716 or
e-mail : dmabusela@thedti.gov.za
TECHNOLOGICAL INNOVATION
Seda Technology Programme - Technology Transfer
To provide technology transfer services to small enterprises, and
provide specific technology support for women-owned enterprises.
Objectives:
Provides funding for small enterprises to acquire
the necessary technology and technical support for effective technology
transfer transactions.
What the Scheme Offers:
Offers financial assistance in the
form of a non-repayable grant up to a maximum of R 600 000 per project.
Who Benefits/is Eligible:
- Design, formulation, materials and methods transfer, including design
improvement and optimization.
- Know-how, knowledge, skills and expertise transfer, including
training and mentoring related to the technology being transferred.
- Designs, equipment, systems, machinery and tooling directly related
to the product and process technology being transferred.
- The Know-how, knowledge, skills and expertise required to operate and
maintain the equipment, systems and machinery, including training and mentoring
related to the technology being transferred.
- Expert resource expenses regarding the technology, where such costs
do not exceed 20% of the total approved TTF funding provided by stp
Contact for Applications:
Technology Transfer Division (TTD):
Ravini Moodley
Tel: (012) 441 1113
Fax: (012) 441 2113
e-mail:
rmoodley@seda.org.za
For more information visit www.stp.org.za
Support Programme for Industrial Innovation (SPII)
SPII is designed to promote technology development in industry in South
Africa through provision of financial assistance for the development of
innovative products and /or processes. SPII specifically focuses on the
development phase that begins at the conclusion of basic research and ends at a
point when a pre-production prototype has been produced.
What the Scheme Offers:
Product Process Development (PPD)
Scheme:
- Only for small, very small and micro enterprises (SMME's), (<50
employees; <R13 million turnover; <R5 million assets)
- Non-repayable grant of 50% to 85% of direct development costs up to a
maximum of R500 000 per project
Matching Scheme:
- Only for small medium enterprises (SME's), (<200 employees;
<R51 million turnover; <R19 million assets)
- Non-repayable grant of 50% to 75% of direct development costs up to
R1,5 million per project
Who Benefits/is Eligible:
- Development should represent a significant advance in technology
- Development and subsequent production must take place in South
Africa
- Intellectual property (IP) to reside in South African registered
companies
- Financial ability to successfully complete the proposed development
and commercialisation; and
- Ability to manufacture and market products, or to have them
manufactured and marketed, or to implement a process
- Managerial ability, specifically in the field of the management of
product development
Contact for Applications:
Fund Manager:
Sithembile Bagopi
Tel: +27 11 269 3450
Fax: +27 11 269 3126
e-mail:
sithembileb@idc.co.za
SPII BEE Manager
Dr. Ntokozo Mthembu
Tel: +27 11 269 3552
Fax: +27 11 269 3126
e-mail: Ntokozom@idc.co.za
Technology and Human Resources for Industry Programme (THRIP)
On a cost-sharing basis with industry, THRIP supports science,
engineering and technology research collaborations focused on addressing the
technology needs of participating firms and encouraging the development and
mobility of research personnel and students among participating organisations.
Objectives:
- To contribute to the increase in the number and quality of people
with appropriate skills in the development and management of technology for
industry.
- To promote increased interaction among researchers and technology
managers in industry, higher education and SETIs, with the aim of developing
skills for the commercial exploitation of science and technology. This should
involve, in particular, to promote the mobility of trained people among these
sectors.
- To stimulate industry and government to increase their investment in
research, technology development, technology diffusion, and the promotion of
innovation.
- To promote increased collaboration between large and small
enterprises, Higher Education Institutions and Science, Engineering and
Technology Institutions by conducting research and development activities
leading to technology transfer and product or process development.
- To promote large (thematic) collaborative research and development
projects in the dti priority areas.
Who Benefits/is Eligible:
- To support an increase in the number of black and female students who
intend to pursue technological and engineering careers.
- To promote technological know-how within the Small, Medium and Micro
Enterprise (SMME) sector; through the deployment of skills vested in Higher
Education Institutions (HEIs) and Science Engineering and Technology
Institutions (SETIs).
- Facilitate and support multi-firm projects in which firms (including
at least one BEE) collaborate and share in the project outcomes.
- To facilitate and support the enhancement of the competitiveness of
black owned enterprises through technology and human resources development.
Contact for Applications:
THRIP Manager:
Dr. Mphekgo Maila
Tel: +27 12 481 4131
Fax: +27 12 481 4197
e-mail: mphekgo@nrf.ac.za
For more information visit www.nrf.ac.za/thrip
SCIENCE & TECHNOLOGY
Scientific and Technological Research And Development Tax
Incentives
The R&D Tax Incentive Programme was designed to encourage
private-sector investment in scientific and technological research and
development (R&D) activities. The R&D tax incentives are an indirect
increase national R&D expenditure and complement government expenditure on
R&D activities. In the medium term, south Africa has set an interim target
for R&D Expenditure of 1% of GDP by 2008
What the Scheme Offers:
A deduction of 150% of expenditure on
eligible R&D activities in the year of assessment is allowed. The new
amendment includes an accelerated depreciation of assets used for purposes of
R&D. capital expenditure on R&D assets will be deductible over three
years at 50% in the year in which the asset is brought into use, and R&D
and 30% and 20% in the next two years of assessment.
Who Benefits/is Eligible:
In order to be eligible for the
R&D tax incentives, several requirements must be met- "
- The taxpayer must carry on trade
- The taxpayer must incur the expenditure
- The expenditure must be incurred directly in respect of activities
undertaken in the Republic of South Africa
- The activities must be undertaken directly for purposes of the
discovery of novel, practical and non-obvious information; or the devising,
developing or creation of any invention, design computer program or
knowledge
- The information, invention, design, computer or knowledge must be of
a scientific or technological nature and must be intended to be used by the tax
payer in the production of his or her income
- Taxpayers can claim for the eligible R&D expenditure on salaries
and wages, materials, etc..
For scientific R&D activity meets the requirements of the Income Tax
Act, we say it is eligible it must be undertaken for the advancement of
scientific knowledge in natural scientific fields of practice, which are listed
in the South African Council for Natural Scientific Professions Act, 2004 (Act
No. 16 of 2004) (See annexure 2). This may be amended to include emerging
scientific fields such as nanoscience. Scientific R&D is normally carried
out in a laboratory setting and the building in which it is undertaken. The
research does not have to be successful to be eligible. For technological
R&D work to be eligible, it must be undertaken to achieve technological
advancement, and includes creating, devising or developing any invention
(material, device, product or process). Technological R&D is normally
undertaken in an industrial setting and the building in which it is done is
expected to be equipped for the purpose. The research does not have to be
successful to be eligible. Research carried out to solve technical problems
encountered after a new product or process has been turned over to production
units, is also eligible.
Industrial Development Corporation (IDC)
Support for chemical and allied industries
Objectives:
Grow the chemical and allied industries with
specific focus on the following industry sectors and subsections
- Upstream and basic chemicals
- Ceramics, concrete and stone products
- Cosmetics and detergents
- Fine and speciality chemicals
- Glass products " Recycling
- Rubber products; and
- Plastic products
What the Scheme Offers:
- Loan and equity-based financial assistance to new and existing
businesses;
- Project initiation;
- The attraction of foreign direct investment; and
- The search for strategic, technical and marketing alliances, both
locally and internationally
Who Benefits/is Eligible:
Bridging Finance and Guarantee
Scheme
- Available to small and medium enterprises (SME) entrepreneurs who
have been awarded fixed contract by government, blue-chip companies or
parastatals.
- Propositions should have some of the following attributes
- Bridging finance or guarantee requirements of at least R1
million;
- The entire contract should be a of a short term nature;
- The applicant should be able to demonstrate delivery of the
contract/tender;
- Loan and repayment term of 18 months maximum; and
- Asset base of company should reflect that of an SME.
Minimum Investment Requirements
- For chemicals and allied industries a minimum loan size of R1 million
at a prime linked interest rate; and
- Minimum equity amount is R5 million at a minimum of 8% real after-tax
IRR.
Contact for Applications:
Senior Account Manager
Mohamed
Shaik Amod
Tel: 011 269 3397
e-mail: mohameds@idc.co.za
|
