Southern African partners will normally offer valuable assistance to an American vendor selling into the market for the first time. Even small companies in the region are very savvy about dealing internationally. South Africa’s import authority, the South African Revenue Service (SARS) conducts a transparent and secure transit for legal goods entering South Africa. Dealing with importation into Southern Africa is generally less complex than dealing with the same administrative processes with US Customs within the USA.

Import Entry Ports

South Africa acts as the road, rail and air nexus for Southern Africa. Mauritius is the logistics nexus for the SW Indian Ocean. Both of these locations together allow for comprehensive coverage of southern as well as eastern African ports. Mauritius serves as a conduit for entry into countries of the Indian sub-continent.

Important ports for the region are Durban and Richards Bay which are the largest in Africa in terms of value and volume respectively. Cape Town, East London and Port Elizabeth are also common sea entry ports. Johannesburg serves as both an air and ground inland port. The Johannesburg International Airport is the largest air cargo port in Africa while City Deep, situated just south of downtown, is a large inland port with direct road and rail connections to major containerized shipping ports. Goods can be sent CIF (or with another INCO term as required) Johannesburg from the USA as City Deep is considered the first point of entry if registered as such. Walfish Bay, Namibia and Maputo, Mozambique are taking some of the strain off South African port facilities through the establishment of world class port facilities. Goods sent through Walfish Bay en route to Johannesburg may take four days less than if they went through Durban. Goods are commonly then shipped to Johannesburg by road from Namibia or Mozambique.

International Payment

South Africa has an advanced banking system. Indeed, many electronic banking systems – particularly in the software and security areas were initially created in South Africa before being transferred overseas. One may expect a monetary transfer through the SWIFT system to take between one and, at the most, three banking days.

South Africa still maintains foreign currency regulations for companies wishing to send payments overseas. Only registered importers may make payments for goods to be imported. This may add about one day to the transaction. Software imports are further regulated and require South African Reserve Bank clearance – which may take more than two weeks with additional documentation to be provided by both sides in the transaction. Currency movement restrictions may be further liberalized in the near future.

South African banks are familiar with all major types of international payment. Letters of Credit are accepted as normal in terms of international transfers.

Tariffs and Duties

South Africa is generally a low tariff country. During the 1980s, South Africa was one of the most protected countries in the world with very high tariff levels. At the onset of democracy in 1994 the present government committed to opening South Africa to world trade and dropped most of the higher tariff barriers, creating free trade pacts with other partners and joining the World Trade Organisation where it enjoys status as a leading developing nation.

The average trade weighted tariff level of South Africa now approximates that of the USA. Most manufactured goods entering South Africa will have as low as no tariffs to about 37% for a finished vehicle. As a rule of thumb, manufacturing equipment and inputs into industry have low tariffs or none at all. Finished goods such as apparel, footwear, toys and other consumer articles will have higher tariffs, generally between 15 – 25%.

Tariffs are normally paid upon entry by the South African registered entity. South African companies must be registered with the South African Revenue Services as an importer (with a special importer registration number) to allow the import to pass freely into the country. At that time, they are liable for entry tariffs, duties and VAT (see below).

Value Added Tax

Valued Added Tax (VAT) of 14% is charged on all goods entering South Africa. This is not applicable to in-transit goods headed for countries beyond South Africa. In many cases a bonded warehouse will be used for goods en route to destinations beyond the borders of South Africa.

VAT is paid by the importer upon entry of the goods into the country. VAT is also applicable to sales of goods or services made inside the borders of South Africa. Whether a buyer from a domestic source inside or an international source outside the country, VAT is payable. Therefore, VAT is not an obstacle to the American exporter.

VAT is reclaimable from the South African Revenue Services by the purchaser upon proof that the goods are meant for resale inside South Africa. The purchaser who resells the goods then charges the VAT amount to his buyer. The amount of VAT calculated in that transaction is not reclaimable.