(Last updated: 31 Mar 2011)

Business etiquette

Business tips

Business meetings tend to be relaxed and informal with South Africans. They are straightforward and their approach to business is similar to Australians.

It is not common practice for business cards to be exchanged at the start of a meeting.

Many South Africans will not offer their business cards or will only do so at the end of a meeting, which can be a sign that they are encouraging further discussions. You will also find that many do not have business cards.

It can be difficult to secure appointments in South Africa and contacts may take some time to respond to requests. It can be more productive to send an explanatory facsimile in advance to establish the context for your request before calling them. It is essential to confirm all appointments.

With many companies and all government departments, visitors must sign in and out to gain access to buildings and pass through a metal detector. Time should be allowed for these security procedures. Visitors should check arrangements for visiting buildings and parking, as many areas can be unsafe and the company being visited may ask the registration number of your car to aid identification and facilitate entry. Transport arrangements should be organised in advance.

It is acceptable and commonplace to refer to the different groups as ‘blacks’, ‘whites’ and ‘coloureds’.

You will often hear South Africans use the phrase ‘just now’ or ‘now’ when commenting on when a task or request will be completed. This does not necessarily translate to mean ‘straight away’ and visitors should try and determine a more exact time.

Please also note: Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. For more information, go to the Attorney General's Department on foreign bribery.

Tariffs and non-tariff barriers

Tariff

Three-column tariff based on the Harmonised System:

• First column - General Rates
• Second column - EU preferential
• Third column - SADC preferential

Most duties are ad valorem, based on the GATT Valuation Code (approximately FOB value (Incoterms 1990). MFN rates apply to GATT signatories (includes Australia). Specific duties based on weight are assessed on legal weight, unless otherwise provided. Legal weight includes the weight of containers or other wrapping usually sold with such goods in retail trade.

Many goods, especially industrial inputs, are duty free. Where duties apply, the rates generally fall between five per cent and 25 per cent, although protection can be quite high, with automobile tariffs at 50 per cent. Goods not less than R400 are not liable for customs duty and do not have to be entered on a bill of entry.

The South African Government is now in the process of simplifying the tariff system by consolidating categories of similar goods and reducing many tariff levels. The move to simplify the tariff system by reducing the number of separate tariff items has met with limited success. In reducing tariff barriers, some have been reduced, while others, due to the combining of previous separate lists, have actually risen.

Non-tariff barriers

Import control is the responsibility of the Ministry of Trade and Industry. Import permits are valid from the date of issue until 31 December of that particular year. Import control will be removed on some of these goods in the future. Notice of changes will be published in the Government Gazette.

Importers must be registered with the Director, Import and Export Control and with the Commissioner, South African Revenue Services.

Foreign exchange allocation is subject to the prior approval of the Reserve Bank.

Documentary evidence of the transaction must be presented to authorised foreign exchange dealers.

Import permit application forms are available from:

The Director, Import and Export Control
Private Bag X192
Pretoria, 0001

Permits are required for the following:

• consumer goods (foodstuffs, clothing, fabrics, footwear and books)
• wood
• paper products
• motor and aviation fuels
• refined petroleum products
• specified chemicals
• raw wool
• specified rubber
• minerals
• firearms
• gambling machines

Importation of all second-hand goods is subject to import control and an import permit is required.

The importation of used vehicles is strictly controlled and import permits are issued only in very specific and defined circumstances. An original certificate issued by the South African Bureau of Standards also needs to accompany clearance for home consumption.

The prevailing import control policy with regard to the different categories of vehicles/parts thereof, covers:

• used motor vehicles for personal use
• specially designed vehicles
• used buses, trucks, taxis and coaches
• used engines
• used gearboxes
• used differentials

Import quotas apply to a range of products, including:

• meat and unprocessed primary products, including fresh produce
• petroleum products
• pesticides
• selected plastic raw materials and resins
• selected rubber items, including tyres and conveyor belts
• paper board
• certain apparel items
• selected machinery items, including transformers, lathes, mechanical shovels and some agricultural equipment items
• gold, silver and certain metal alloys

Product certification, labelling and packaging

Labelling

All goods sold by measure must have the actual liquid content marked on the container. Denominations must be in millilitres (ml) or litres (l).

Packaging patterns (sizes), based on metric units, are prescribed for a wide range of products.

Quantity statements on labels and packages are strictly controlled:

• They are not to be marked on any surface intended as a base
• They must be clearly marked
• They must be less than 1.5 millimetres or greater than 15 millimetres in height
• Figures of fractions shall be written on above the other as in the case of 1/2

The only permissible abbreviation for gram is the lower case letter 'g' without a full stop.

The words when packed may not be used after a statement of net weight on packages, except for those containing:

• washing soda
• Glauber's or Epsom salts
• seed potatoes
• ropes and cordage other than metal ropes
• twines
• ferrous sulphate (except exsicated variety)
• zinc sulphate
• copper sulphate
• sodium sulphite
• sodium thiosulphate and lead nitrate
• fresh mushrooms
• yeast
• dried fruits
• sausage skins when prepacked in wrappers or containers, which is not moisture retaining

Goods in prepacked form imported for sale other than by quantity may not carry any direct or indirect reference to either weight or measure (including numbers, which might be construed as such). This does not prohibit the indications of weight on outer containers or weighbills for freight purposes.

Descriptive names which imply size or quantity, such are giant, jumbo, large or small, may not be used to describe the size of a prepacked article unless:

• It is legally recognised in South Africa as indicating a grade or size.
• It is part of a trade or brand name which is used in its entirely in a statement of quantity.
• It is an established term used in a particular trade for indicating the size of certain fabricated articles.

Drugs must have packages clearly labelled with name or trade name of article, name and business address of manufacturer or producer and of importer or person by whom or on whose behalf the drug was packaged. If drugs are mixed or compounded, this fact must be stated, together with the names of the ingredients and, if specially required, the respective proportions of the ingredients and the name and nature of any foreign substance included.

Textiles and silver-plated articles are subject to special marking regulations.

Packaging

Packing of hay, straw, flax combings, palm packing fibre or brown coconut fibre is permitted only under stringent conditions. Packing cases or crates must be free of insect or fungus infestation (otherwise consignee may be required to have the wood treated at own expense in a manner indicated by the authorities).

Goods to be transported by South African Railways will be carried at owner's risk unless packed and protected in accordance with specified requirements. South African transport authorities accept goods only if name and address of consignee, destination and the port of entry are clearly marked.

Weight and measurements on cases must be shown in metric amounts. All prepacked goods imported for sale must carry an indication of the metric weight or measures.

Cases weighing over 1.3 tonnes must have actual weight legibly painted on the cases close to the shipping mark.

Special certificates

Specified plant and animal products require sanitary certificates issued by the approved authority in the country of origin. In Australia this is usually the Australian Quarantine and Inspection Service, Commonwealth Department of Agriculture, Fisheries and Forestry-Australia or the relevant state department of agriculture.

Specified products include:

• manufactured grain
• hay and straw (including that used as packing)
• hog casings
• bovine or ovine casings
• potatoes
• tomato seeds

Certain foodstuffs and food preparations require special certificates from the relevant Australian authorities.

Documentary requirements

Commercial invoice

Invoices must be in English at all times.

Terms of sale to be indicated on invoices.

Full description of items in accordance with the HS requires, for example, make, model, serial number and style number.

Certificates of origin

DA 59s to be endorsed by a chamber of commerce or other government body authorised to do so in the country of origin.

Bill of lading

One negotiable and two non-negotiable copies are required. To Order bills are acceptable. The importer must specify the actual number of copies required. The bill of lading must always indicate the shipping on-board date. The B/L must also indicate:

• The name and address of consignee and, if applicable, clearing agent applicable dates.
• A complete description of the goods, including marks and numbers.
• Weights and measures in metric systems.
• Ports of loading and discharge.

Packing list

Three copies required. Details should agree with those in the other documents.

Public health requirements

All goods for human/animal consumption or application, as well as plants and animals, and their products, are at all times subject to inspection by 'Port Health' before release for home consumption.

The import of foodstuffs and food preparations is strictly controlled and, in many cases, special import permits must be obtained from the South African Department of Health.

Nearly all drugs are subject to the standard of composition, strengths, potency and purity prescribed by the British Pharmacopoeia and the British Pharmaceutical Codex. Some drugs, vaccine and sera for the treatment of human diseases, cultures or drug preparations, and poisons require a special import permit from the Department of Health.

Electrical appliances must conform to specialised safety standards.

Please contact the Department of Trade and Industry for more details.

Insurance

One copy required by the importer (the original, if claims are to be paid in South Africa).

Weights and measures

The metric system.

Taxation

South Africa has a double taxation agreement with Australia. A Value Added Tax is applied at a rate of 14 per cent on all goods and services, except for a limited number of exempt items such as essential basic goods.

South Africa has just switched from a source-based to a resident-based income tax system. Specific excise duties of various percentages are levied on certain imported and domestically produced foodstuffs, tobacco products, alcoholic beverages and on petrol and diesel fuels.

Ad valorem excise duties are levied on luxury items, according to the following formula - customs value + 15% + calculated customs duty (if applicable):

• mineral water and alcoholic beverages
• tobacco products
• perfumes
• photographic and audio-visual products
• watches and clocks
• firearms
• motor vehicles

The corporate tax rate is 30 per cent with Secondary Tax on Companies (STC) at a rate of 12.5 per cent giving an effective 38.75 per cent tax on distribution. Local branches of foreign companies pay 35 per cent but are exempt for STC. There is no withholding tax or interest on dividends for non-residents. Capital allowances on manufacturing plant and machinery is generally at a rate of 20 per cent write-off per annum.