South Africa: Investment Strategy

Since minister Mandisi Mphalwa's embargoed briefing on the revised Codes of Good Practice under the Broad Based Black economic Empowerment Act (BEE ACT) on 24 June 2005, much has been made in the media of the purported exclusion of so-called "indirect ownership" in those Codes.

The Minister of Finance has had the banking sector in his sights for some time, not only because he believes that banks are enjoying excessive tax benefits, but because, both for themselves and for their clients, they are devising tax-driven investment schemes that erode the tax base. Recent additions to the Income Tax Act give effect to the legislature’s intention of reining in these practices.

Africa is a diverse and dynamic continent that offers investors a wealth of opportunities, a fact reflected in increasing levels of international and cross-border investment activity. In common with all emerging markets, however, Africa can be a complex and risky environment in which to operate, being subject to a wide variety of laws, regulations and business practices.