South Africa

Commentary

South Africa presents a series of unique challenges. The country possesses immense riches in terms of natural resources and agriculture, but it continues to go through a difficult adjustment following the end of the Apartheid era. It has recently been placed on the grey list, which means it is not viewed as being a place which has sufficiently strong measures to combat money laundering and international terrorism. No participant had yet experienced any consequences of this classification. Some of the major cities also experience security issues – one participant is accompanied by security personnel during visits.

The sentiment expressed by all participants was that business works, and it is possible to do most transactions MNCs need to execute. However, there is a relatively high degree of bureaucracy which needs to be complied with.

• Most participants fund their businesses with intercompany loans. These are allowed, but need to be approved by the central bank: this approval is typically granted, but this approval is easier to obtain if certain standard terms are followed.
• The country has affirmative action laws which require a certain percentage of business and employees to be with and from members of communities which have been historically disadvantaged. One participant talked of how their company makes great efforts to develop business partners who meet the requirements. Most participants experienced some degree of personnel churn due, in part, to these laws, but none found them to be a major issue.
• There are exchange controls – but these usually take the form of bureaucratic documentation requirements and prior approvals, and foreign currency is generally available. The rand (ZAR) can be

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