South Africa
A. Definitions and sources of data Foreign direct investment (FDI) in South Africa is defined as Investment by foreigners/South African residents in undertakings in South Africa/abroad in which they have individually or collectively in the case of affiliated organizations or persons at least 10% of the voting rights. In the compilation of South Africa's balance-of-payment, the principle followed is that an effective voice is only possible if the investment involves control in the organization. In all cases, the ownership of 25% or more of total issued voting stock or comparable ownership or voting rights is regarded as involving control. Data on the geographic location of the origin of inward stock, and inward and outward flows as well as on the sectoral distribution of FDI flows were calculated on the basis of foreign liabilities and assets values reported by the South African Reserve Bank. The International Monetary Fund also provides data on FDI in the country in its balance-of-payments statistics. The Government of South Africa is eager to attract foreign investment and has put policies in place to achieve this goal. The government does not require approval for investment and foreign investors in most cases are subject to the same laws as domestic investors. Non-residents may invest directly through a resident company, branch or partnership. The 1973 Companies Act permits the establishment of a private or public limited-liability company. Most foreign firms setting up South African subsidiaries have used the private form. The Close Corporation Act of 1984 (Act 69) created a third legal form for corporations, which is well suited to small businesses. The rights of foreign owners are not legally restricted, except in banking, and there is no overall limit on the amount of foreign ownership. Moreover, the government's privatization programme shows a clear move away from the past protectionist policies. Foreigners are free to acquire freehold title to land anywhere in the country. Certain industrial sites offer land for long-term lease only. In many parts of the country, land rights are separated from mineral rights. Firms interested in the latter should investigate title deeds, which are public documents in local registries, to check the ownership of mineral rights. These rights are the focus of a new policy that calls for transferring ownership of all domestic mineral rights to the state. The Department of Trade and Industry has recently completed a process of fundamental restructuring and initiated programs such as the skills support program for investors. The new investment-promotion agency, Trade and Investment of South Africa, is now operational. South Africa has been revising its competition laws in recent years. An important statute, which took effect in 1999, established new standards that reduce market dominance, curb restrictive practices and more closely regulate mergers. Foreign businesses can expect the businessoperating environment to become increasingly competitive. The legal system is an unusual mixture of English law, and the Dutch-Roman law on the other. The Roman-Dutch law tends to predominate in matters of property, succession and the law of sale and lease. To avoid unpleasant surprises, investors have to consult counsel on any matters regarding the establishment or expansion of business in South Africa. Acquisitions and takeovers are subject to the provisions of chapter 13 of the reconstituted 1973 Companies Act, whether the company making the take-over bid is foreign or local. The amended law contains strict provisions governing disclosure and take-over procedures. Under Competition Act 89 of 1998, parties must notify the Competition Commission within seven days of a proposed
UNCTAD WID Country Profile: SOUTH AFRICA
Page 2 of 29
merger that qualifies as an intermediate or as a larger merger, as defined by law. Antitrust rules empower the government to prohibit mergers deemed contrary to the public interest. The new competition law was implemented in the mid-1999. South Africa has double tax agreements with several foreign countries. These include Botswana, Denmark, Finland, France, Germany, Israel, the Republic of Korea, Lesotho, Malawi, Namibia, the Netherlands, Romania, Swaziland, Sweden, Switzerland, Tanzania, Uganda, the United Kingdom, Zambia and Zimbabwe. The treaty with the United Kingdom extends also to Grenada, Mauritius, the Seychelles and Sierra Leone. Limited sea and air transport agreements exist with Belgium, Brazil, Greece, Ireland, Italy, Japan, Norway, Portugal, the Republic of China and Spain. Comprehensive agreements have been ratified in South Africa with Belgium, Hungary and Poland. Comprehensive agreements have been signed but not ratified with Austria, Canada, Italy, Lesotho, Republic of China and the Russian Federation. Comprehensive agreements have been negotiated, or renegotiated but not signed, with Botswana, Croatia, the Czech Republic, Malaysia, Malta, Mauritius, Namibia, Norway, Singapore, Slovakia, Thailand, Turkey and Uganda. Comprehensive agreements are being negotiated or renegotiated but have not been finalized with Argentina, India, Japan, Luxembourg, Portugal, Tunisia, the United States of America and Zimbabwe. In terms of these agreements, the foreign resident undertaking will only be taxable in South Africa if it conducts business in South Africa through a permanent establishment. The government provides export subsidy that is payable under the General Export Incentive Scheme. South Africa is a member of most international conventions for protecting intellectual property. Patents, trademarks, copyrights and industrial designs, and models are all legally recognized in South Africa, which was one of the first signatories to the Trademarks Laws Treaty at the World Intellectual Property Organization in 1994. The current legal regime ensures compliance with the Trade-Related Aspects of Intellectual Property agreement (TRIPs) of the World Trade Organization to which South Africa is a member. Most Africa countries, particularly those on the southern tip of the region seek close relationship with South Africa as both an outlet and source of materials products. South Africa, on the other hand had intensified their effort to integrate into the global economy, starting with the region. The country now has warm relations with almost all the countries of the world. South Africa actively engages its African neighbours at both the political and commercial level, both bilaterally and is a big-time player in regional bodies such as the African Union, Southern African Customs Union and the Southern African Development Community. The government won the approval of the Organization of African Unity conference in Lusaka to present Millennium Africa Plan, now been renamed the New Partnership for Africa's Development. South Africa also has strong tie with the United States and is eligible for the United States' market access for African countries - African Growth and Opportunity Act.
B. Statistics on FDI and the operations of TNCs
UNCTAD WID Country Profile: SOUTH AFRICA
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Table 1. Summary of FDI
(Millions of dollars)
Variable 1. FDI flows, 2002-2005 (annual average) 2. FDI flows as a percentage of GFCF, 2002-2005 (annual average) 3. FDI stock, 2005 4. FDI stock as a percentage of GDP, 2005
Source: Based on tables 3a, 4a and UNCTAD, FDI/TNC database.
Inward 2 167.3 7.4 69 372.0 29.0
Outward 396.6 1.3 38 503.4 16.1
UNCTAD WID Country Profile: SOUTH AFRICA
Table 3a. FDI flows, by type of investment, 1980-2005
(Millions of dollars)
Source: International Monetary Fund, Balance of Payments CD ROM, August 2006.
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Table 6a. FDI flows in the host economy, by geographical origin, 1990-1994
(Millions of rand)
Region/Economy World Unspecified Developed economies Unspecified Developed economies Europe Unspecified Western Europe European Union Austria Belgium France Germany Italy Luxembourg Netherlands United Kingdom Unspecified European Union Other developed Europe a Liechtenstein Switzerland Unspecified Other Europe North America United States Unspecified North America b Other Developed economies Australia Japan Developing economies Unspecified developing economies Africa Botswana Swaziland Unspecified Africa Latin America and the Caribbean Asia and Oceania Asia Hong Kong, China Taiwan Province of China Unspecified Asia c
a
Source : South African Reserve Bank, Quarterly Bulletin , various issues. Includes Central and Eastern Europe. b Includes Latin American and Caribbean economies. c Includes Japan.
UNCTAD WID Country Profile: SOUTH AFRICA
Table 6b. FDI flows in the host economy, by geographical origin, 1990-2004
(Millions of dollars)
Table 9. FDI flows abroad, by geographical destination, 1990-2004
(Millions of dollars)
Economy
Australia Austria Belgium Belgium / Luxembourg Brazil Bulgaria Chile China Cyprus Czech Republic Denmark Finland France Germany Hungary Madagascar Malaysia Mauritius Morocco Namibia Portugal Saudi Arabia Spain Sweden United Kingdom Tanzania, United Rep. United States Venezuela
Source : UNCTAD, FDI/TNC database. Note: Data are based on information reported by the economies listed above.
UNCTAD WID Country Profile: SOUTH AFRICA
Table 11. FDI stock in the host economy, by industry, 1994-2004
(Millions of rand)
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Sector/Industry
Total Primary Agriculture, hunting, forestry and fishing Mining, quarrying and petroleum Secondary Tertiary Electricity, gas and water Construction Trade Transport, storage and communications Finance Community, social and personal services
Source: UNCTAD, FDI/TNC database. Note: Data are based on information reported by the economies listed above. a Majority-owned affiliates.
Table 23. The number of affiliates of foreign TNCs in the host economy, by geographical origin, 1990-2003 Economy Germany Italy United States 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 302 315 333 304 294 315 317 334 338 360 387 381 224 227 .. 3 .. 2 .. 3 .. 7 .. .. .. .. .. .. 106 104 104 108 129 140 151 160 169 191 197 200 204 206
Source: UNCTAD, FDI/TNC database. Note: Data are based on information reported by the economies listed above.
Table 28. Assets of foreign affiliates of home-based TNCs, by geographical location abroad, 1990-2001
(Millions of dollars) 268 330 248 232 194 279 4 585 3 937 3 391 3 167 4 371 7 040 Source: UNCTAD, FDI/TNC database. Note: Data are based on information reported by the economies listed above.
Economy Germany United States
1990
1991
1992
1993
1994
1995
1996
129 8 261
1997
112 8 157
1998
120 8 483
1999
301 3 692
2000
93 10 449
2001
1 234 6 160
Table 30. Assets of affiliates of foreign TNCs in the host economy, by geographical origin, 1990-2003
(Millions of dollars)
3 882 4 024 4 089 4 055 4 584 5 720 2 674 2 703 2 928 2 925 3 901 5 819 Source: UNCTAD, FDI/TNC database. Note: Data are based on information reported by the economies listed above. a Majority-owned affiliates.
Source: UNCTAD, FDI/TNC database. Note: Data are based on information reported by the economies listed above. a Majority-owned affiliates.
UNCTAD WID Country Profile: SOUTH AFRICA
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Tables 38 and 48. Wages and salaries and value added of foreign affiliates of South African TNCs in the United States, 1990-2002
(Millions of dollars)
Table no. Variable 38 Wages and salaries 48 Value added
1990
597 ..
1991
571 ..
1992
557 877
1993
597 897
1994
639 1 012
1995
924 1 867
1996
1 098 2 011
1997
1 182 2 218
1998
1 126 2 027
1999
575 874
2000
627 1 045
2001
727 971
2002
777 ..
Source: UNCTAD, FDI/TNC database. Note: Data are based on information reported by the United States.
Tables 40 and 50. Wages and salaries and value added of affiliates of United States TNCs in South Africa, 1990-2003
(Millions of dollars)
Table no. Variable 40 Wages and salaries a Value added 50
1990
492 ..
1991
521 ..
1992
645 ..
1993
588 ..
1994
674 908
1995
1 032 1 097
1996
1 014 1 322
1997
1 780 1 449
1998
1 911 1 638
1999
2 598 1 687
2000
2 798 2 311
2001
2 597 1 949
2002
2 174 2 187
2003
2 237 2 763
Source: UNCTAD, FDI/TNC database. Note: Data are based on information reported by the United States. a Majority-owned affiliates of United States TNCs.
Table 43. Sales of foreign affiliates of home-based TNCs, by geographical location abroad, 1990-2003
(Thousands of employees)
.. .. .. 186.1 .. 5 151 3 903 3 910 4 399 5 643 Source: UNCTAD, FDI/TNC database. Note: Data are based on information reported by the economies listed above. a Majority-owned affiliates.
Economy Austria a Germany Italy a United States
1990
.. 309
1991
.. 422
1992
.. ..
1993
.. 242
1994
.. 246
1995
7.9 209
1996
7.6 266
1997
.. 173
1998
.. 170
1999
.. 320 .. 3 475
2000
.. 184 .. 4 852
2001
.. 537 .. 5 152
2002
.. 1 223 .. 5 175
2003
.. 1 467 .. ..
185.5 .. 152.1 .. 9 400 10 016 10 243 11 560
Table 45. Sales of affiliates of foreign TNCs in the host economy, by geographical origin, 1990-2003
(Millions of dollars)
.. .. .. .. .. 4 159 4 269 4 290 4 216 5 050 Source: UNCTAD, FDI/TNC database. Note: Data are based on information reported by the economies listed above. a Majority-owned affiliates.
Economy Austria a Belgium a Germany Finland a Italy Portugal a United States
UNCTAD WID Country Profile: SOUTH AFRICA
Table 86. Largest home-based TNCs, 2004
(Millions of dollars and number)
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Company A. Industrial Sasol Chemiese Nywerhede Barloworld Imperial Holdings De Beers Consolidated Mines Sappi Iscor Steinhoff International Holdings Nampak Allied Electronics Corporation Impala Platinium Gold Fields Limited Harmony Gold Mining Company Illovo Sugar Rustenburg Platinum Holdings Omnia Holdings Bell Equipment Haggie Rand Unihold Group James Howden Dynamic Fluid Control Rhomberg Trading Spanjaard GAP Communications Technologies Seardel Investment Corporation AECI Explosives The South African Breweries Sans Fibres Macsteel The Petroleum Oil and Gas Corporation Welfit Oddy Polo Manufacturing Atio Corporation Powertech Batteries International Alfa International Atlas Copco Holdings Conhage Foodcorp Operations Ressano Garcia Railway company B. Tertiary Eskom The Bidvest Group MTN Group Safair Pick n Pay Retailers Datatec Networking & Communication Systems Naspers Aveng Murray & Roberts Reunert Pepkor Network Healtcare Holding Sun International Group Five Holdings Rebserve Holdings South African Marine Corporation Comparex Dimension Data
Industry
Sales
Employees
Chemicals and chemical products Diversified Motor vehicles and trailers Mining and quarrying Wood and wood products Metal and metal products Other manufacturing Wood and wood products Electrical and electronic equipments Mining and quarrying Metal and metal products Mining and quarrying Agriculture Other manufacturing Diversified Machinery and equipment Other manufacturing Machinery and equipment Machinery and equipment Machinery and equipment Electrical and electronic equipment Petroleum Electrical and electronic equipments Textiles and clothing Chemicals and chemical products Food products, beverages and tabacco Textiles and clothing Metal and metal products Manufacture of petroleum Motor vehicles and trailers Textiles and clothing Electrical and electronic equipments Electrical and electronic equipments Machinery and equipment Other manufacturing Rubber and plastic products Food products, beverages and tabacco Other manufacturing
Electricity, gas and water Transport and storage Telecommunications Transport Distributive trade Computer and related activities Communications Construction Construction Computer and related activities Transport and storage Other services Hotel and restaurant Construction Other business services Transport and storage Computer and related activities Computer and related activities
UNCTAD WID Country Profile: SOUTH AFRICA
Table 86. Largest home-based TNCs, 2004 (continued)
(Millions of dollars and number)
Page 17 of 29
Company Tiger Wheels Leisurenet B. Tertiary (continued) Trencor Services Hans Merensky Holdings Metropolitan Health Corporate Wings Corporate Travel Paradigm Systems Technology Mgx Software Idion Technology Holdings Vaal Mac Investments Tourvest Holdings Business Connexion Technology Holdings Multichoice Berzack Brothers CJ Petrow and Company Mobile Telephone Networks Comazar That Record Company C. Finance and insurance The Standard Bank of South Africa FirstRand Bank Investec Bank Tradehold WACO International Unifruco Munich Reinsurance Company of Africa Clickatell Nedbank MIH Holdings Ltd. Liberty Group
Industry Wholesale trade Other services
Sales Employees 321 1 465 159 ..
c c
Transport Wholesale trade Health and social services Transport and storage Computer and related activities Computer and related activities Computer and related activities Research and development Transport and storage Computer and related activities Telecommunications Wholesale trade Wholesale trade Telecommunications Transport Other services
Sources: The Banker's Almanac , 2003 (London, Reed Information Services, 2003); Thomson Analytics (http://analytics.thomsonib.com/); Who Owns Whom database (https://solutions.dnb.com/wow); L'intelligent Jeune Afrique, "The Africa Report: Top 500 companies" (March 2006); The Banker, Top 1000 World Banks, (July, 2005); Annual Report. a b c 2003. 2002. Estimate.
UNCTAD WID Country Profile: SOUTH AFRICA
Table 87. Largest affiliates of home-based TNCs, 2004
(Millions of dollars and number)
Page 18 of 29
Company Name A. Industrial Northern Breweries Barloworld Plascon Zambia Sasol Germany Gmbh Sasol Italy Sasol North America SD Warren Company Sappi Lanaken Press Paper Nampak Plastics Europe Barloworld Equipment UK Stahlschmidt & Maiworm Dometic Sappi Lanaken NV Stahlschmidt & Maiworm Sasol Servo Sappi (U.K.) Barloworld Scientific Illovo Sugar Malawi Melles Griot Delta Emd Australia Satelcom Sasol China The Jacobs Manufacturing Sasol Slovakia International Trimmings & Labels Comstor Networking Hukla Matratzen Nampak Gent Abelle Limited Glenryck Foods Trenstar Dometic Seitz California Steel and Tube Afora ATS Leichtmetallräder Barloworld Vacuum Technology Dynamic Battery Services Techne Alpine Systems Corporation B. Tertiary Bidvest BFS Group Sappi Europe Westcon Group GHG Intermediate General Healthcare Group Dometic International Finanzauto BMI Healthcare Westcon Group European Operations Fitness First Holdings Sasol International Services Poundstretcher HM Group Barloworld USA Sasol Olefins & Surfactants Westcon (UK) Macsteel Service Centers Barloworld Truck Center
Host Economy
Industry
Sales
Employees
Zambia Zambia Germany Italy United states United States Belgium United Kingdom United Kingdom Germany Sweden Belgium Poland Netherlands United Kingdom United Kingdom Malawi United States Australia United Kingdom China United Kingdom Slovakia United Kingdom Spain Germany Belgium Australia United Kingdom United Kingdom Sweden United States Spain Germany United Kingdom United Kingdom United Kingdom Canada
Food products and beverages Chemicals and chemical products Chemicals and chemical products Chemicals and chemical products Chemicals and chemical products Wood and wood products Wood and wood products Rubber and plastic products Machinery and equipment Motor vehicles and trailers Electrical and electronic equipment Wood and wood products Metal and metal products Chemicals and chemical products Wood and wood products Non-metallic mineral products Agriculture Precision instruments Chemicals and chemical products Machinery and equipment Chemicals and chemical products Other manufacturing Chemicals and chemical products Textiles and clothing Electrical and electronic equipment Wood and wood products Chemicals and chemical products Mining and quarrying Food products and beverages Machinery and equipment Rubber and plastic products Metal and metal products Precision instruments Motor vehicles and trailers Machinery and equipment Electrical and electronic equipment Precision instruments Machinery and equipment
United Kingdom United Kingdom Belgium United States United Kingdom United Kingdom Sweden Spain United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United States Germany United Kingdom United States United States
Wholesale trade Wholesale trade Wholesale trade Wholesale trade Other business activities Health and social services Research and development Wholesale trade Health and social services Computer and related activities Other business activities Other services Distributive trade Wholesale trade Wholesale trade Other business services Wholesale trade Wholesale trade Wholesale trade
UNCTAD WID Country Profile: SOUTH AFRICA
Table 87. Largest affiliates of home-based TNCs, 2004 (continued)
(Millions of dollars and number)
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Company Name B. Tertiary (continued) Comstor Logicalis Group Tiger Wheel & Tyre Lanes Motors Barloworld Industrial Distribution America Barloworld Handling Logicalis Inc Fitness First Clubs Barloworld Industrial Distribution Frontrange Solutions Neska Schiffahrts- und Speditionskontor Hukla Gengenbacher Polstermöbel Comstor Networks Ontime Automotive Lan Systems Dorbyl U.K. Brouwer Shipping & Chartering S.T.E.T Crean Foodservice Limited Sappi U.K. AAF Industries C. Finance and insurance Standard Bank London Standard Bank Asia Ansbacher & Co Bankhaus Wölbern & Co Standard Bank Namibia First National Bank of Namibia NBC Bank Windhoek Ansbacher Stanbic Bank Zimbabwe Commercial Bank of Malawi Stanbic Bank Tanzania Lesotho Bank Stanbic Bank Botswana Stanbic Bank Uganda Standard Bank Swaziland Ltd Stanbic Bank Kenya Ltd Stanbic Bank Zambia Ltd First National Bank of Swaziland Ltd Stanbic Bank Nigeria Limited Standard Merchant Bank
Host Economy
Industry
Sales
Employees
United Kingdom United Kingdom United Kingdom Australia United States United States United States United Kingdom United States United States Germany Germany Germany United Kingdom Australia United Kingdom Germany Portugal New Zealand Netherlands United Kingdom
Computer and related activities Computer and related activities Wholesale trade Distributive trade Wholesale trade Wholesale trade Wholesale trade Other services Wholesale trade Computer and related activities Transport Other services Computer and related activities Other business activities Wholesale trade Other business activities Transport Wholesale trade Wholesale trade Wholesale trade Other business activities
Assets Employees United Kingdom Hong Kong, China United Kingdom Germany Namibia Namibia Tanzania Namibia Cayman Islands Zimbabwe Malawi Tanzania Lesotho Botswana Uganda Swaziland Kenya Zambia Swaziland Nigeria Singapore Finance Finance Finance Finance Finance Finance Finance Finance Finance Finance Finance Finance Finance Finance Finance Finance Finance Finance Finance Finance Finance 7 624 1 560 1 141 571 411 395 383 309 216 192 161 154 143 141 134 96 84 75 57 52 12 635 200 185 117 968 963 784 770 59 670 763 159 .. 184 99 448 125 257 230 110 362
a f a f d a f f a d f f d d d a a a a a a
Sources: The Banker's Almanac, 2003 (London, Reed Information Services, 2003); Thomson Analytics (http://analytics.thomsonib.com/); Who Owns Whom database (https://solutions.dnb.com/wow); Annual Report. a 2002. b 2005. c Estimate. d 2000. e 2003. f 2001.
UNCTAD WID Country Profile: SOUTH AFRICA
Table 88. Largest affiliates of foreign TNCs in the host economy, 2004
(Millions of dollars and number)
Page 20 of 29
Company A. Industrial Anglo American Platinum Anglo American Farms Sabmiller Mondi Toyota South Africa Gabriel SA Highveld Steel and Vanadium Corporation Agrihold Pirelli Tyre Southern Associated Maltsters Glaxosmithkline Cadbury Gillette Group South Africa Smithkline Beecham Pharmaceuticals Otis Grs Medical Weir Envirotech Aventis Pharma Behr Engine Cooling Mondipak Namibia Baltimore Aircoil Company Maskew Miller Longman Gunnebo Security South Africa Automotive Power Refurbishers African Gabions Flowtite Vectus Uap Crop Care BHP Billiton Fiat Auto South Africa ISS International Ambrand Springer Schokoladen Fabrik Ringsdorff Carbon Corporation Shell and BP South African Petroleum Refineries Kalvet Engineering Senmin B. Tertiary Johnson Controls Potgietersrust Platinums Anglogold Health Service Kumba Resources Federal-Mogul Aftermarket Dimension Data Interactive African Oxygen Lattice Technologies Internet Solutions Bayer Interleisure Management Company Intersport Tsumeb Corporation Tyco Healthcare Lexmark International Paperlink Honeywell Southern Africa Behr Climate Control Alliance Distribution
Home Economy Industry
Sales
Employees
United Kingdom United Kingdom United Kingdom United Kingdom Japan United States United Kingdom United States Italy United Kingdom United Kingdom United Kingdom United States United Kingdom United States United Kingdom Scotland France Germany United Kingdom United States United Kingdom Sweden Japan Italy United States United States United Kingdom Italy United Kingdom Australia United Kingdom United Kingdom United Kingdom United Kingdom United States
Mining and quarrying Agriculture Food products and beverages Wood and wood products Motor vehicles and trailers Motor vehicles and trailers Metals and metals products Chemicals and chemical products Rubber and plastic products Food products and beverages Chemicals and chemical products Food products, beverages and tabacco Electrical and electronic equipments Chemicals and chemical products Machinery and equipment Chemicals and chemical products Machinery and equipment Chemicals and chemical products Motor vehicles and trailers Wood and wood products Machinery and equipment Publishing, printing Machinery and equipment Motor vehicles and trailers Metal and metal products Non-metallic mineral products Chemicals and chemical products Mining and quarrying Motor vehicles and trailers Precision instruments Chemicals and chemical products Food products, beverages and tabacco Electrical and electronic equipments Petroleum Precision instruments Chemicals and chemical products
United States United Kingdom Australia United Kingdom United States United Kingdom United Kingdom United Kingdom United Kingdom Germany Bahamas Bahamas Namibia Bermuda United States United Kingdom United States Germany United Kingdom
Construction Other services Other services Other services Wholesale trade Telecommunications Other services Wholesale trade Computer and related activities Wholesale trade Other services Other business activities Other services Other services Wholesale trade Wholesale trade Wholesale trade Wholesale trade Wholesale trade
UNCTAD WID Country Profile: SOUTH AFRICA
Table 88. Largest affiliates of foreign TNCs in the host economy, 2004 (continued)
(Millions of dollars and number)
Page 21 of 29
Company B. Tertiary (continued) R Moores Spares DHL International Fugro Airborne Surveys Laminated Technologies 2000 Rio Tinto Management Services Halliburton Industries Metso ND Engineering Deutsche Lufthansa Aktiengesellschaft Lubrizol Adibis Alfa Laval Uniqema Oracle Corporation Carl Zeiss New Zealand Milk Products Hunting Aviation ABB Plexicor (Exports) Crompton Chemical C. Finance and insurance ABSA Bank Mercantile Bank Ltd Albaraka Bank Ltd The South African Bank of Athens Ltd HBZ Bank Ltd Habib Overseas Bank Limited Old Mutual Rennies Bank Aon Consulting South Africa JP Morgan Equities ABN Amro Securities Crawford and Company Morgan Guaranty Trust Company of New York Mitsui and Company ABN Amro Bank Marubeni Corporation Clarinbridge Investments Louis Dreyfus Africa Pioneer International South Africa Swiss Re Life and Health Africa HSBC Investment Services Bayerische Landesbank Girozentrade BMW Financial Services Metcorp Trading Old Mutual Unit Trust Managers
Home Economy Industry
Sales
Employees
United States Germany Netherlands United Kingdom United Kingdom United States Finland Germany United Kingdom Netherlands United Kingdom United States Germany New Zealand United Kingdom Switzerland United Kingdom United States
Other services Transport Research and development Other services Other services Other services Construction Transport Wholesale trade Wholesale trade Wholesale trade Computer and related activities Other services Wholesale trade Automotive trade and repair Other services Wholesale trade Other services
Assets Employees United Kingdom Portugal Saudi Arabia Greece Switzerland Luxembourg United Kingdom United Kingdom United States United States Netherlands United States United States Japan France Japan United Kingdom France United Kingdom Switzerland United Kingdom Germany Germany Germany United Kingdom Finance Finance Finance Finance Finance Finance Insurance Finance Insurance Finance Finance Insurance Finance Finance Finance Finance Finance Finance Insurance Insurance Finance Finance Finance Finance Insurance 56 543 201 43 35 31 17 .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 33 166 1 214 88 195 57 54 41 466 1 600 250 150 110 90 66 50 50 40 30 22 10 .. .. .. .. .. ..
d e e e e a
b b
b e b b b b b
Sources: The Banker's Almanac, 2003 (London, Reed Information Services, 2003); Thomson Analytics (http://analytics.thomsonib.com/); Who Owns Whom database (https://solutions.dnb.com/wow); L'intelligent Jeune Afrique, "The Africa Report: Top 500 companies" (March 2006); Annual Report. a 2003.b Estimate. c 2002. d 2000. e 2001.
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C.
Legal framework for transnational corporations
In South Africa, a large number of national, bilateral and multilateral legal instruments exist to regulate the activities of transnational corporations and foreign direct investors. The key instruments applicable in the country include:
I.
National framework
Export Credit and Foreign Investments Re-Insurance Act No. 78 of 24 June 1957; effective 12 July 1957. Source: "Trade and Industry", Statutes of the Republic of South Africa (classified and annotated looseleaf edition 1910 to present) p. 351. Amendment: Export Credit and Foreign Investment Re-Insurance Amendment Act No. 34 of 2002, effective October 2002 Source: Government Communication Information Services Industrial Development Act No. 22 of 15 May 1940; effective 20 May 1940. Source: "Trade and Industry", Statutes of the Republic of South Africa (classified and annotated looseleaf edition 1910 to present) p. 151. Amendment: Industrial Development Amendment Act No. 49 of 2001; effective December 2001 Source: Government Communication Information Services Financial Institution (Investment Funds) Act No. 39 of 20 March 1984; effective 1 I April 1984. Source: "Trade and Industry", Statutes of the Republic of South Africa (classified and annotated looseleaf edition, 1910 to present), "Banking and Currency", p. 621. Financial Institution (Investment Funds) Amendment Act No. 22 of 1997; effective July 1997. Source: Government Communication Information Services Diamonds Act No. 56 of 11 June 1986; effective I October 1986. Source: "Trade and Industry", Statutes of the Republic of South Africa (classified and annotated looseleaf edition, 1910 to present), "Mining and Minerals", p. 155. Amendment: Amendment of regulation under section 95 of the Diamonds Act 1986 Source: Government Communication Information Services Maintenance and Promotion of Competition Act No. 96 of 21 June 1979; effective 1 January 1980. Source: "Trade and Industry", Statutes of the Republic of South Africa (classified and annotated looseleaf edition, 1910 to present), "Trade and Industry", p. 695. Amendment: Maintenance and Promotion of Competition Amendment Act No. 35 of 1999; effective on April 1999. Source: Government Communication Information Services
Temporary Removal of Restriction on Economic Activities Act No. 87 of 3 September 1986; effective 10 September 1986. Source: "Trade and Industry", Statutes of the Republic of 'South Africa (classified an,4 annotated looseleaf edition, 1910 to present), p. 913. Amendment: Temporary Removal of Restriction on Economic Activities Amendment ActNo. 67 of 29 June 1988; effective on 29 June 1988. Source: "Trade and Industry", Statutes of the Republic ofSouth Africa (classified and annotated looseleaf edition, 1910 to present), p. 922. Companies Act No. 61 of 19 June 1973; effective I January 1975. "Companies", p. 489. Source: "Trade and Industry", Statutes of the Republic of South Africa (classified and annotated looseleaf edition, 1910 to present), Amendment Companies Amendment Act No. 35 of 2001; effective December 2001.
UNCTAD WID Country Profile: SOUTH AFRICA
Source: Government Communication Information Services
Page 23 of 29
Close Corporations Act No. 69 of 19 June 1984; effective 1 January 1985. Source: "Trade and Industry", Statutes o1 the Republic of South Africa (classified and annotated looseleaf edition, 1910 to present), p. 1,201. Amendment: Close Corporations Amendment Act No. 26 of 1997; effective July 1997. Source: Government Communication Information Services
Income Tax Act No. 58 of 25 May 1962: effective I July 1962. Source: "Trade and Industry", Statutes of the Republic of South Africa (;classified and annotated looseleaf edition, 1910 to present), "Income Tax". p. 101. Amendment: Exchange Control Amnesty and Amendment of Taxation Laws Act of 2003 Source: Government Communication Information Services Patents: Patents Act No. 57 of 1978, as amended by the Patents Amendment Act No. 14 of 1979, the Amendment: Patents Amendment Act No. 58 of 2002, effective December 2002. Source: Government Communication Information Services Atomic Energy Act No. 90 of 1967 (as amended) (Sections 21 and 21A: Patents). Patents Regulations of 1978, effective January 1979. Amendments, Nos R.1110 and R.1613 of the Regulations published by virtue of the Patents Act No. 57of 1978, August 1984. Source: WIPO (http://www.wipo.org). Trade Marks: Trade Marks Act No. 194 of 1993, assented to December 1993. Merchandise Marks Act No. 17 of 1941 as amended by the Merchandise Marks Amendment Act No. 55 of 1967. Amendment: Merchandise Marks Amendment Act no 50 of 2001 Source: Government Communication Information Services
Unauthorized Use of Emblems Act No. 37 of 1961. Trade Marks Act of 1963, Regulations, No. R. 2313, December 1971. Amendment, No. R.1615, of Schedule 1 of the Regulations proclaimed in terms of the Trade Marks Act No. 62 of 1963, August 1984. Business Names Act No. 27 of 1960, as amended by the Business Names Amendment Act No. 84 of 1972, and the Business Names Amendment Act No. 31 of 1979. Source: WIPO (http://www.wipo.org). Industrial Designs: Designs Act No. 195 of 1993, assented to December 1993. Proclamation by the Acting State President of the Republic of South Africa No. R. 360 of 1967 (commencement of the Designs Act). Designs Regulations No. R. 361 of 1968, as amended by Designs Amending Regulations No. R. 3755 of 1969. Source: WIPO (http://www.wipo.org). Copyright Act No. 98 of 1978, as amended by the respective Copyright Amendments Acts, No. 56 of 1980, No. 66 of 1983, No. 52 of 1984, No. 39 of 1986, No. 13 of 1988, No. 61 of 1989 and No. 1125 of 1992. Performers’ Protection Act No. 11 of 1967. Intellectual Property Laws Amendments Act of 1997. Source: WIPO (http://www.wipo.org). Business Names Act No. 27 of 1960, as above, under Trademarks.
UNCTAD WID Country Profile: SOUTH AFRICA
Source: WIPO (http://www.wipo.org). Banks Amendment Act [No. 19 of 2003] Source: South Africa Government Web-site: Legislation (http://www.gov.za/acts/index.html). Insurance Amendment Act [No. 17 of 2003] Source: South Africa Government Web-site: Legislation (http://www.gov.za/acts/index.html). Exchange Control Amnesty and Amendment of Taxation Laws Act [No. 12 of 2003] Source: South Africa Government: Legislation (http://www.gov.za/acts/index.html).
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Exchange Control Regulations: Appointment of authorised dealer in foreign exchange (Gazette 25527, Regulation Gazette 7784), 10 October 2003 Source: South Africa Government: Regulations (http://www.gov.za/regulations/index.html). Exchange Control Regulations: Appointment of authorised dealer in foreign exchange (Gazette 25527, Regulation Gazette 7784), 10 October 2003 Source: South Africa Government: Regulations (http://www.gov.za/regulations/index.html). Telecommunications Act: Regulations (Gazette 25519, Regulation Gazette 7783), 1 October 2003 Source: South Africa Government: Regulations (http://www.gov.za/regulations/index.html). Telecommunications Act: Regulations: Applications for Value Added Network Service (VANS) licences (Gazette 25519, Regulation Gazette 7783), 1 October 2003 Source: South Africa Government: Regulations (http://www.gov.za/regulations/index.html). Telecommunications Act: Regulations: Applications for Private Telecommunication Network (PTN) licences (Gazette 25519, Regulation Gazette 7783), 1 October 2003 Source: South Africa Government: Regulations (http://www.gov.za/regulations/index.html). Exchange Control Amnesty and Amendment of Taxation Laws Act: Regulations Source: South Africa Government: Regulations (http://www.gov.za/regulations/index.html). Income Tax Act: Strategic Industrial Project (Gazette 25137, Regulation Gazette 7701), 4 July 2003 Source: South Africa Government: Regulations (http://www.gov.za/regulations/index.html). Exchange control regulations: Cancellation of appointment of authorised dealers in foreign exchange (Gazette 24697, Regulation Gazette 7627), 11 April 2003 Source: South Africa Government: Regulations (http://www.gov.za/regulations/index.html). Exchange control regulations: Cancellation and appointment of an authorised dealer in foreign exchange (Gazette 24697, Regulation Gazette 7627), 11 April 2003 Source: South Africa Government: Regulations (http://www.gov.za/regulations/index.html). Exchange control regulations: Appointment of an authorised dealer in foreign exchange (Gazette 24967, Regulation Gazette 7590), 7 March 2003 Source: South Africa Government: Regulations (http://www.gov.za/regulations/index.html). Exchange control regulations: Cancellation of appointment of authorised dealers in foreign exchange (Gazette 24967, Regulation Gazette 7590), 7 March 2003 Source: South Africa Government: Regulations (http://www.gov.za/regulations/index.html). Regulations relating to representative offices of foreign banking institutions, (Gazette 22939, Regulation Gazette 7227), 13 December 2001 Source: South Africa Government: Regulations (http://www.gov.za/regulations/index.html).
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Industrial development zone programme (Gazette 21803, Regulation Gazette 6936), 1 December 2000 Source: South Africa Government: Regulations (http://www.gov.za/regulations/index.html). Private Security Industry Regulation Act: Exemption: De Beers Consolidated Mines Limited (Gazette 25565, Regulation Gazette 7791), 17 October 2003 Source: South Africa Government: Regulations (http://www.gov.za/regulations/index.html). Gas Regulator Levies Act [No. 75 of 2002] Source: South Africa Government: Legislation (http://www.gov.za/acts/02index.html). Revenue Laws Amendment Act [No. 74 of 2002] Source: South Africa Government: Legislation (http://www.gov.za/acts/02index.html). Patents Amendment Act [No. 58 of 2002] Source: South Africa Government: Legislation (http://www.gov.za/acts/02index.html). Finance Act [No. 48 of 2002] Source: South Africa Government: Legislation (http://www.gov.za/acts/02index.html). Corporate Laws Amendment Act [No. 39 of 2002] Source: South Africa Government: Legislation (http://www.gov.za/acts/02index.html). Taxation Laws Amendment Act [No. 30 of 2000] Source: South Africa Government: Legislation (http://www.gov.za/acts/02index.html). Mineral and Petroleum Resources Development Act [No. 28 of 2002] Source: South Africa Government: Legislation (http://www.gov.za/acts/02index.html). Copyright Amendment Act [No. 9 of 2002] Source: South Africa Government: Legislation (http://www.gov.za/acts/02index.html). Performers' Protection Amendment Act [No. 8 of 2002] Source: South Africa Government: Legislation (http://www.gov.za/acts/02index.html). Tourism Second Amendment Act [No. 70 of 2000] Source: South Africa Government: Legislation (http://www.gov.za/acts/00index.html). Banks Amendment Act [No. 36 of 2000] Source: South Africa Government: Legislation (http://www.gov.za/acts/00index.html). Finance Act [No. 48 of 2002] Source: South Africa Government: Legislation (http://www.gov.za/acts/00index.html). Taxation Laws Amendment Act [No. 30 of 2000] Source: South Africa Government: Legislation (http://www.gov.za/acts/00index.html). Tourism Amendment Act [No. 8 of 2000] Source: South Africa Government: Legislation (http://www.gov.za/acts/00index.html). Companies Third Amendment Act [No. 125 of 1998] Source: South Africa Government: Legislation (http://www.gov.za/acts/98index.html). Taxation Laws Amendment Act [No. 30 of 1998] Source: South Africa Government: Legislation (http://www.gov.za/acts/98index.html).
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Intellectual Property Laws Amendment Act [No.38 of 1997] - 1 October Source: South Africa Government: Legislation (http://www.gov.za/acts/97index.html). Insurance Amendment Act [No. 31 of 1997] - 5 September 1997 Source: South Africa Government: Legislation (http://www.gov.za/acts/97index.html). Taxation Laws Amendment Act [No. 30 of 2000] - 4 July Source: South Africa Government: Legislation (http://www.gov.za/acts/97index.html). Close Corporations Amendment Act [No. 26 of 1997] - 18 July Source: South Africa Government: Legislation (http://www.gov.za/acts/97index.html). Finance Act [No. 48 of 2002] - 11 April Source: South Africa Government: Legislation (http://www.gov.za/acts/97index.html). Intellectual Property Laws Rationalisation Act [No. 107 of 1996] Source: South Africa Government: Legislation (http://www.gov.za/acts/96index.html). Tourism Amendment Act [No. 105 of 1996] Source: South Africa Government: Legislation (http://www.gov.za/acts/96index.html). Telecommunications Act [No. 103 of 1996] Source: South Africa Government: Legislation (http://www.gov.za/acts/96index.html). Insurance Amendment Act [No. 54 of 1996] Source: South Africa Government: Legislation (http://www.gov.za/acts/96index.html). Industrial Development Amendment Act [No. 49 of 2001] Source: South Africa Government: Legislation (http://www.gov.za/acts/95index.html). Mineral and Energy Laws Amendment Act [No. 47 of 1994] Source: South Africa Government: Legislation (http://www.gov.za/acts/94index.html). Electricity Amendment Act [No. 46 of 1994] Source: South Africa Government: Legislation (http://www.gov.za/acts/94index.html). Banks Amendment Act [No. 26 of 1994] Source: South Africa Government: Legislation (http://www.gov.za/acts/94index.html). Mutual Banks Amendment Act [No. 25 of 1994] Source: South Africa Government: Legislation (http://www.gov.za/acts/94index.html). Income Tax Act [No. 21 of 1994] Source: South Africa Government: Legislation (http://www.gov.za/acts/94index.html). Taxation Laws Amendment Act [No. 20 of 1994] Source: South Africa Government: Legislation (http://www.gov.za/acts/94index.html).
Maritime Zones Act [No. 15 of 1994] Source: South Africa Government: Legislation (http://www.gov.za/acts/94index.html). Designs Act [No. 195 of 1993] Source: South Africa Government: Legislation (http://www.gov.za/acts/95index.html).
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II.
International Framework
A. South Africa is a party to the following bi-lateral, multilateral, unilateral and regional instruments: Paris Convention for the Protection of Industrial Property of 1883 (Revised at Brussels in 1900, Washington in 1911, The Hague in 1925, London in 1934, Lisbon in 1958 and Stockholm in 1967, and as amended in 1979). Signed in 1994. Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958, which entered into force on 7th June 1959. Convention Establishing the Multilateral Investment Guarantee Agency of 1985, entered into force on 12 April 1988. Marrakesh Agreement Establishing the World Trade Organisation of 15 April 1994. Entered into force on 1 January 1995. Agreement on Trade-Related Investment Measures. General Agreement on Trade in Services. Agreement on Trade Related Aspects of Intellectual Property Rights. Southern Africa Development Community (SADC). Partnership Agreement between the Members of The African, Caribbean and Pacific Group of States, of the one part and the European Community and its member states, of the other part signed in Cotonou, Benin on 23 June 2000. Trade, Development & Cooperation Agreement between South Africa and the European Union, that became effective 1 January 2000. African Growth and Opportunity Act (AGOA) that was signed on 18 May 2000 between the United States and sub-Sahara African countries B. Bilateral treaties
1. Bilateral investment treaties for the protection and promotion of investments: United Kingdom 1994, Canada 1995, Cuba 1995, France 1995, Germany 1995, Korea, Republic of 1995, Netherlands 1995, Switzerland 1995, Austria 1996, Denmark 1996, China 1997, Iran, Islamic Republic of 1997, Italy 1997, Mozambique 1997, Argentina 1998, Belgium / Luxembourg 1998, Chile 1998, Czech Republic 1998, Egypt 1998, Finland 1998, Ghana 1998, Mauritius 1998, Senegal 1998, Spain 1998, Sweden 1998, Turkey 2000, Uganda 2000, Yemen 2002, Tunisia 2002, Libya 2002. 2. Bilateral treaties for the avoidance of double taxation: United States 1947, Sweden 1955, Zambia 1956, Ireland 1958, Lesotho 1959, Namibia 1959, Tanzania, United Republic of 1959, Uganda 1959, Sweden 1961, Zimbabwe 1965, Switzerland 1967, United Kingdom 1968, Malawi 1971, Netherlands 1971, Swaziland 1972, Germany 1973, Botswana 1977, Israel 1978, United Kingdom 1978, China 1980, Taiwan Province of China 1980, France 1993, Poland 1993, Romania 1993, Hungary 1994, Mauritius 1994, Taiwan Province of China 1994, Belgium 1995, Canada 1995, Denmark 1995, Finland 1995, Italy 1995, Korea, Republic of 1995, Lesotho 1995, Sweden 1995, Austria 1996, Croatia 1996, Czech Republic 1996, Mauritius 1996, Norway 1996, Thailand 1996, Ireland 1997, Japan 1997, Malta 1997, United States 1997, Germany 1998, Netherlands 1998, Seychelles 1998, Slovakia 1998, Australia 1999, Tunisia 1999, China 2000, New Zealand 2002, Rwanda 2002, Belarus 2002, Oman 2002, Botswana 2003, Ukraine 2003.
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D.
Official
Sources of information
Reserve Bank of South Africa (www.resbank.co.za). Secondary African Development Bank (1998). African Development Report 1998 (London: Oxford University Press). Biekpe, N. (2000). The 21st century is Africa's century. Creating investor interest in the continent: Eye on Africa. Bennell, Paul (1997a). "Foreign direct investment in Africa: rhetoric and reality" (Washington D.C.: SAIS Review) (Summer/Fall), pp. 127-139. _____________________(1997b). "Privatization in sub-saharan Africa: progress and prospects during the 1990s", World Development, vol. 25, no. 11, pp. 1785-1803. Business Map (1998). South African Investment Report 1998 (Johannesburg: Business Map SA). ____________________(2000). "South Africa – an anchor under strain", in SADC investor survey: complex terrain (Johannesburg: Businessmap). Dunne, N. (1999). "US in S. Africa trade and investment pact", Financial Times, 19 February. Economist Intelligence Unit (EIU) (2002a). Country Profiles: South Africa (London: EIU Ltd.). ____________________(2002b). Country Report: South Africa (London: EIU Ltd.), April. ____________________(2005a). Country Profiles: South Africa (London: EIU Ltd.). ____________________(2005b). Country Report: South Africa (London: EIU Ltd.), April. International Monetary Fund (IMF) (2006). IMF's Sub-Saharan Africa Regional Economic Outlook, March 10, 2006. (Washington D.C.: IMF). Hein Marais (1998). South Africa: Limits to Change? (Toronto). International Finance Corporation (IFC) (1997). "Foreign direct investment", IFC: lessons of experience series No. 5. (Washington, D.C.: World Bank). Peter Fallon and Luis Pereira da Silva (1994). South Africa: Economic Performance and Policies (Washington D.C.: World Bank), April. United Nations Conference on Trade and Development (UNCTAD) (1995). Foreign Direct Investment in Africa (Geneva: United Nations (United Nations publication, Sales No. E.95.II.A.6). ____________________(2005a). Investor-Disputes Arising from Investment Treaties: A Review. UNCTAD Series of International Investment Policies for Development (UNCTAD/ITE/IIT/2005/4). ____________________(2005b). A Survey of Support by Investment Promotion Agencies to Linkages. Advisory Studies No. 18 (UNCTAD/ITE/IPC/2005/12). ____________________(2005c). FDI in least developed countries at a glance: 2005/2006 (UNCTAD/ITE/IIA/2005/17).
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United States Commercial Service (2006). Doing Business in South Africa: A country Commercial Guide for US Companies. (Washington D.C.: US Government). United States Trade Representative (2006). 2006 Comprehensive Report on U.S. Trade and Investment Policy Toward Sub-Saharan Africa and Implementation of the Africa Growth and Opportunity Act: The Sixth of Eight Annual Reports, May 2006. (Washington D.C.: US Government). World Bank (2001). Global development finance (Washington D.C.: World Bank). ______________________(2000). Business in Africa: missed opportunities? Edited version of World Bank chapter in Can Africa claim the 21st century? (Washington D.C.: World Bank). _______________________(2005). South Africa: an assessment of the investment climate. June, 2005.