Business Process Services (BPS)
The South African government implemented a Business Process Outsourcing & Off-shoring (BPO&0) incentive programme as from July 2007. Between July 2007 and March 2010, the incentive resulted in the creation of at least 6,000 new jobs and attracted R303 million in direct investment.
As part of a process of improving South Africa’s position as an investment destination, a systematic review of the BPO & O incentive programme was undertaken with the private sector resulting in a revised BPS incentive.
The BPS aims to attract investment and create employment in South Africa through off-shoring activities.
- A base incentive as a tax exempt grant paid over three years for each offshore job created and maintained.
- A graduated bonus incentive paid as follows:
- 20% bonus for more than 4000 but less than 8000 offshore jobs paid once off in a year in which the bonus is reached;
- 30% bonus for more than 800 offshore jobs paid once off in the year in the year in which the bonus level is reached.
the dti will determine whether an applicant is eligible to benefit from the BPS incentive, based on the requirements that an applicant (legal entity):
- must be performing BPS activities;
- may be involved in starting a new operation or expanding an existing operation in order to perform BPS activities, which may be operated from more than one physical location in South Africa;
- must, by the end of three years from the start of operation of the new project or the expansion, have created at least 50 new off-shore jobs in South Africa, as defined in the BPS Incentive Programme Guidelines;
- must commence its commercial operations no later than six months from the date on which the BPS incentive grant was approved. Failure to reach this target date will lead to the cancellation or disqualification of the application, thus requiring the applicant to submit a revised application to submit a revised application to reapply for the grant; and
- if in a joint venture arrangement, must have at least one of the parties registered in South Africa as a legal entity.
Automotive Investment Scheme (AIS)
The Automotive Investment Scheme (AIS) is an incentive designed to grow and develop the automotive sector through investment in new and/ or replacement models and components that will increase plant production volumes, sustain employment and/ or strengthen the automotive value chain.
Objectives of incentive scheme
- Strengthen and diversify the sector through investment in a new and/or replacement models and components.
- Increase plant production volumes.
- Sustain employment and/or strengthen the automotive value chain.
- The AIS provides for a taxable cash grant of (20%) of the value of qualifying investment in productive assets as approved by the dti.
- An additional taxable cash grant of 5 or 10% may be available to projects that are found to be strategic by the dti.
- An additional taxable cash grant of five to ten percent (5% – 10%) may be made available for projects that maintain their base year employment figure throughout the incentive period, and achieve at least two (2) of the following economic requirements:
- Research and development in South Africa;
- Employment creation;
- Strengthening of the automotive value chain; and
- Value addition.
- To qualify for an additional grant of five to ten percent (5% – 10%), the project must demonstrate the following:
- In respect of light motor vehicle manufacturer: a specified increase in unit production per plant ; and
- In respect of component manufacturers: a specified increase in turnover and manufacturing of components that are currently not being manufactured in South Africa.
- Light motor vehicle manufacturers that have achieved, or can demonstrate that they will achieve, a minimum of 50 000 annual units of production per plant, within a period of three (3) years; or
- Component or deemed component manufacturers that are part of the Original Equipment Manufacturer (OEM) supply chain; or
- Will achieve at least 25% of total entity turnover or R10 million by the end of the first full year of commercial production as part of a light motor vehicle manufacturer supply chain, locally and / or internationally.
Light Motor Vehicle Manufacturers
- Should have achieved or can demonstrate that it will achieve, within three years, a minimum of 50 000 annual units of production per plant.
- Should demonstrate that it will achieve within three years a minimum of 50 000 annual units of production per plant.
Component Manufacturers or Deemed Component Manufacturers
- A component manufacturer that can prove that a contract is in place and/or a contract has been awarded and/or a letter of intent has been received for the manufacture of components to supply into the light motor vehicle manufacturer supply chain locally and/or internationally;
- A component manufacturer that can prove that after this investment it will achieve at least 25% of total entity turnover or R10m annually by the end of the first full year of commercial production, as part of a light motor vehicle manufacturer supply chain locally and/or internationally.
Aquaculture Development and Enhancement Programme (ADEP)
The Aquaculture Development and Enhancement Programme (ADEP) is an incentive programme available to South African registered entities engaged in primary, secondary and ancillary aquaculture activities in both marine and freshwater classified under SIC 132 (fish hatcheries and fish farms) and SIC 301 and 3012 (production, processing and preserving of aquaculture fish). The grant is provided directly to approved applications for new, upgrading or expansion projects.
The programme offers a reimbursable cost-sharing grant of up to a maximum of R40 million qualifying costs in machinery and equipment; bulk infrastructure; owned land and/or buildings; leasehold improvements; and competitiveness improvement activities as outlined in section 8 of the ADEP guidelines.
The objective of the ADEP is to stimulate investment in the aquaculture sector with the intention to:
- Increase production;
- Sustain and create jobs;
- Encourage geographical spread; and
- Broaden participation.
The ADEP offers a reimbursable cost-sharing grant of up to a maximum of R40 million qualifying costs in:
- Machinery and equipment(owned or capitalised financial lease);
- Bulk infrastructure;
- Owned land and/or buildings;
- Leasehold improvements;
- Competitiveness improvement activities and
- Commercial vehicles and work boats (owned or capitalised financial lease).
- Primary Aquaculture Operations
- Brood stock operations;
- Seed production operations;
- Juvenile (spat, fry, fingerling) operations, including hatchery and nursery facilities;
- On-growing operations, including but not limited to rafts, net closures, net pens, cages, tanks raceways and ponds.
- Secondary Aquaculture Operations
- Primary processing for aquaculture (post-harvest handling, eviscerating, packing, quick freezing);
- Secondary processing for aquaculture (filleting, portioning, packaging);
- Tertiary processing for aquaculture (value adding: such as curing, brining, smoking, further value adding such as terrines, roulades, pates, paters);
- Waste stream handling for aquaculture (extraction of fish oils, protein beneficiation, organic fertilizers, pet feeds, animal feeds).
- Ancillary Aquaculture Operations
- Aquaculture feed manufacturing operations;
- Research and Development projects related to aquaculture;
- Privately-owned aquaculture veterinary services (farm inspections, disease surveillance and control, histopathological analysis, etc. specifically for the aquaculture industry).