Foreign Direct Investment

Foreign investment in  KZN is welcomed - all business sectors are open to investors, no government approval is required, and there are almost no restrictions on the form or extent of foreign investment.

Exchange Control

1996 was the start of a gradual liberation of exchange control limits on foreign investment by institutional investors, which enabled foreign investment diversification. Instead of a pre-application process for foreign investment there will now be a system of quarterly reporting and monitoring of foreign exposures by the Reserve Bank. It is stated that during 2008 there will be additional work embarked upon in respect of final prudential foreign exposure limits.

This allows for more asset swap type investments. The Reserve Bank’s Exchange control division will be renamed the Financial Surveillance Department giving rise to a change in their function and responsibilities ensuring proper surveillance and supervision by the Reserve Bank.

A discretionary allowance amounting to R500 000 per annum, which is additional to the R2 million individual investment allowance, is introduced for travel, gifts, donations and maintenance.

Investment Treaties

South Africa has signed a number of Bilateral Investment Treaties (BITS) with other countries for Foreign Direct Investment (FDI). These treaties are most commonly used to facilitate transparency regarding investment-related requirements and rights between foreign investors and host countries.

Typical rights for investors include:

Safeguards against expropriation (property rights protection)

Access to information

Non-discrimination between local and foreign investors

Most-favoured nation treatment

Investors’ obligations include issues such as

Environmental impact assessments

Adherence to environmental standards,

Corporate accountability and

Labour standards.



KZN Foreign Direct Investment

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