South Africa FDI control
South Africa FDI control

The following Competition practice note provides comprehensive and up to date legal information covering:

  • South Africa FDI control
  • 1. What is the applicable legislation?
  • 2. Which government or other body (or bodies) reviews foreign investments?
  • 3. What is the scope of the foreign investment regime? Does it only apply to specific sectors or types of investors (eg foreign or non-EU / non-WTO)? Are there specific rules for certain types of investors (eg state-owned enterprises)?
  • 4. What are the triggers or thresholds for the regime to apply? What types of transactions are caught? Is there a minimum level of shareholding or a control test that applies?  Are there any other thresholds that need to be met (eg based on turnover or market shares)?
  • 5. Are there any exceptions that may apply?
  • 6. Is there any discretion to review transactions that do not meet any thresholds for review?
  • 7. What are the grounds for review, eg public or national security or other grounds?
  • 8. What level of discretion do the relevant authorities have to approve or reject transactions? Is there scope for any other body to intervene?
  • 9. Where a transaction is caught by the regime, is notification mandatory and must closing be suspended pending clearance?
  • More...

A conversation with Deepa Vallabh, partner, Yushanta Rungasammy, partner, Maud Pia-Hill, senior associate, and Mawande Kanyo Benedict Ntontela, trainee in the Johannesburg office of international law firm CMS on key issues on foreign direct investment (FDI) control in South Africa.

1. What is the applicable legislation?

The following is a (non-exhaustive) list of the main legislation applicable to foreign direct investment (FDI) in South Africa:

  1. Protection of Investment Act 22 of 2015 (Investment Act)

  2. Competition Act 89 of 1998 (Competition Act)

  3. Companies Act 71 of 2008 (Companies Act)

  4. Companies Regulations, 2011 issued under the Companies Act (Companies Regulations), and

  5. Currency and Exchanges Act: Regulations: Exchange Control (exchange control regulations).

2. Which government or other body (or bodies) reviews foreign investments?

The South African Reserve Bank (SARB) is the main body tasked with protecting the value of the South African currency and is the regulator in terms of the exchange control regulations, which deals with the outward and inward flow of, amongst others, currency in South Africa. The SARB enforces compliance with South Africa’s exchange control regulations through authorised dealers (usually banks) to ensure compliance with exchange control when sending and receiving funds across South African borders.

The Take Over Regulation Panel (TRP) is a regulator mandated under the Companies Act to regulate the transactions of regulated companies (amongst others). A regulated company is:

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