Business Grants offered by The South African Departments of Trade and Industry and of Small Business Development provide a wide range of support programmes. The department of Finance, through the tax act, and in collaboration with other departments, also offers some additional tax allowances in respect of investment cost.
Below are descriptions of current programmes:
Aqua Culture Development Enhancement Program (ADEP) business grants Revised during June 2016, this program offers a cash grant on investment cost in marine and fresh water activities. Qualifying activities include cultivation, processing and ancillary activities such as feed manufacturing, Research and Development and veterinary services. The grant is calculated as a percentage of your investment in fixed assets, infrastructure and in competitiveness improvement activities, to a maximum amount of R30 million. The percentage varies between 20% and 45%, with smaller projects receiving the highest percentage. In addition, in the case of emerging black farmers (more than 51%), the incentive is enhanced and varies between 40% and 80%.The program caters for new projects as well as for expansions and upgrading of existing projects.
Automotive Investment Scheme (AIS) business grants Launched during 2014, the AIS has been extended during 2015 and 2016 and now also covers people carriers and medium to heavy duty commercial vehicles. The programs include original equipment component manufacturers.
The AIS provides for a cash grant of twenty percent (20%) of the value of qualifying investment in productive assets in the case of vehicle manufacturers and twenty five percent (25%) of the value of qualifying investment in productive assets by component manufactures and tooling companies. These percentages are enhanced by up to 10% if certain requirements can be reached. The program has no maximum grant level.
Business Process Services (BPS) business grants Launched during 2011, the program was revised during 2015 and now runs until 2023. The primary objective is to create jobs and secondary, to enhance the country’s export earnings through offshoring services.
Companies offering business process services internationally may qualify.
A 5yr base incentive on a reducing sliding scale is offered in respect of new jobs created, plus a bonus payment at the end.
Black Industrialists Policy (BIP) business grants The DTI’s Black Industrialist Policy aims to create opportunities for new and existing black industrialist champions. Champions are defined as persons who are able to lead as business- or technical experts, are involved and committed to the business and will take financial risk. Applicant companies must therefore be more than 50% owned and/or controlled by black shareholders.
A BIS (“Black Industrialist Scheme”) grant of between 30% and 50% is offered on investment in equipment, vehicles and buildings, and the minimum required investment is R30 million. The policy aims to ensure that the project’s total financial needs are satisfied, not only to provide a matching grant. For this purpose, loan and equity finance is offered through one of the government’s Development Finance Institutions.
The policy applies to manufacturing and related activities (which normally includes the processing and packaging of fresh fruit and vegetables).
Black Business Supplier Development Program (BBSDP) business grants now under the administration of the Department of Small Business Development, this program offers grants to any commercial business, existing for more than one year, that is more than 50% owned by persons from previously disadvantaged communities. Grants can be used to acquire assets or professional services and training, and vary from 50% to 80%, with a life time maximum amount per business of R1 million.
Capital Projects Feasibility Program (CPFP) business grants The Capital Projects Feasibility Programme (CPFP) is a cost-sharing grant that contributes to the cost of feasibility studies likely to lead to projects that will increase local exports and stimulate the market for South African capital goods and services.
The grant is offered to a maximum of 50% of the total costs of the feasibility study for projects outside Africa and 55% of the total costs of the feasibility study for projects in Africa and is capped at R8 million
Cluster Development Program (CDP) business grants The Cluster Development Programme aims to promote industrialisation, sustainable economic growth and job creation needs of South Africa through cluster development and industrial parks. Its objective is to enhance competitiveness of enterprises within a cluster or Industrial Parks. Assistance will also be prioritised for Industrial Parks in former homeland areas and/or townships. Grants of up to 80% are offered.The first component, the shared infrastructure grant is towards investment in assets such as buildings, machinery, equipment, tools, jigs, dies and commercial vehicles. The grant is up to 80% of the qualifying investment to a maximum grant of R10 million per cluster. The second component, Business Development Services, supports business development services initiatives of the cluster such as conformity assessments (standards accreditation), financial management, Information Technology services, logistics management, professional services, Human Resource Management, benchmarking exercises, market research, feasibility studies, etc. A grant of up to 80% of the investment is offered, to a maximum grant of R5 million per cluster. The third component, Cluster Management Organisation Funding, is aimed at supporting strong dynamics amongst enterprises and other stakeholders in the cluster. The CMO purpose is to manage core operation and delivery by the cluster. A grant of up to 80% of the costs payable at the establishment of the CMO is offered, to a maximum grant of R5 million per Cluster.