While a regulatory framework for cryptocurrency companies in South Africa is not in place at the moment, investors who open a cryptocurrency company in South Africa are required to follow the general company formation steps.
Similarly, there is no requirement for a crypto license in South Africa, however, these types of activities are subject to a certain level of regulation.
Presently, virtual currencies are not considered legal tender in South Africa.
While the development of the applicable laws and regulations is underway, the South African Revenue Service treats cryptocurrencies as intangible assets, rather than currency.
In this article, our lawyers in South Africa answer a number of key questions related to the crypto license in South Africa as well as the steps needed to open a company in this business field.
Investors who wish to know more about the incorporation process, as well as those who require assistance when opening a company, can reach out to our attorneys for details.
We also assist those interested in immigration to South Africa. We can answer questions about visas and residence permits for investors, when and where one should apply for these, as well as issues related to their validity and renewal. For foreign investors who have been in the country lawfully for a number of years, we can also answer questions concerning their permanent residency.
Foreign investors who decide to set up their cryptocurrency company in South Africa will need to apply for a business visa if they will also intend to remain employed in their business. Our team can give you more information about the minimum investment amount, the application for the visa and, for those interested in remaining in the country, the conditions for South Africa permanent residence.
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What are the steps for investors who open a cryptocurrency company in South Africa?
Company formation in South Africa is subject to a number of mandatory steps.
Our team of lawyers in South Africa summarizes the main stages for opening a private company below:
- Reserve the company name: the initial application can include a name reservation; otherwise, the enterprise name is used for registration;
- Deposit the funds: R425 for company registration without name reservation and R75 for company registration with a name reservation;
- Provide the documents: copies of the identity documents of the applicants and the incorporators and directors, the company’s Memorandum of Incorporation (customized or standardized);
- Register the company: the registration is processed once the documents are submitted to the Companies and Intellectual Property Commission.
If company formation in South Africa is your focus, our team can help you incorporate irrespective of the industry in which your business will activate. The duration of this process can vary according to several factors, and our local team is able to represent your interests during most of these stages when acting as your appointed representative. You can reach out to us for more information.
Investors who also wish to relocate to the country will need to follow additional steps for obtaining temporary residence. Our immigration lawyers in South Africa can detail these steps.
The following estimated turnaround times are to be expected:
- 2 days for the company name reservation;
- 3 working days for the name change;
- 5 days from the registration of a private company with a customized Memorandum of Incorporation.
Investors who require specialized assistance to open a cryptocurrency company in South Africa can reach out to our team of attorneys who specialize in incorporations.
We assist entrepreneurs who wish to open a business, irrespective of the business field or industry.
We also assist those interested in immigration to South Africa.
Is there a need to apply for a crypto license in South Africa?
At the present moment, these types of activities are not subject to specific licensing.
However, the South African Reserve Bank (SARB) may issue subsequent positions and clarifications as to the treatment of these activities.
What are the general principles for regulating crypto assets in South Africa?
The Crypto Assets Regulatory Working Group has published a position on crypto assets that stipulates that the treatment thereof will be brought to the attention of the local regulators in a phased manner.
The principles that will be followed are the following:
- Crypto assets are to be regulated in an appropriate manner, as to promote responsible innovation;
- A risk-based approach and an activities-based perspective is to be maintained;
- A proactive monitorization and a collaborative joint approach from the regulators will be maintained;
- Consumers will benefit from increasing their level of digital financial literacy in order to fully understand the products and services.
In this context, our team of lawyers can provide interested investors with any relevant recent developments in terms of laws and regulations that would as for a crypto license in South Africa.
What is the tax status of cryptocurrencies in South Africa?
Cryptocurrencies are regarded by the South Africa authorities as intangible assets.
This means that individuals who derive income from such a source are required to declare their profits. Penalties apply for failure thereof.
Locally registered companies that provide services related to cryptocurrencies are subject to corporate income tax in South Africa, as per the applicable rules.
Our tax lawyers in South Africa can provide more details upon request about the tax treatment of companies.
Reach out to our lawyers for information about relevant amendments to the tax and financial laws that can concern the use of a crypto license in South Africa.
Our team can help you open a cryptocurrency company in South Africa and we can put you in touch with our partners, if you need to incorporate a company in Malaysia.
We can also help investors who are interested immigration to South Africa.