Step Two: Setting Up Your Bank Account
After you have finished registering your company, the next step is to open a bank account to get your company active. To begin sorting out your business finances you need a business bank account in order to transact with the South African Revenue Service (SARS).
Opening your business’ bank account
When visiting the bank to open up your business bank account you will need the following documents:
- The company registration documents from step one
- A certified copy of the Identification Documents (ID) of every one of your directors
- Original proof of residence (utilities accounts, cellphone accounts, retail credit accounts, or Telkom accounts)
- Your business lease agreement
Registering your business for tax
The next process in the financial side of business registration in South Africa is registering for various taxes. Generally the rule of thumb for tax registration completion is 21 days.
As of 2014, since the Company Intellectual Property Commission and SARS are working in synergy again, when you register your business, your business will be registered for income tax automatically.
Registering your business for VAT
Registering for Value-Added Tax (VAT) is only absolutely necessary in a few isolated business environments. Our advice, when it comes to registering your business for VAT, is that if you do not need to be registered for VAT, don’t register your business for VAT. Where registering for VAT is not necessary, the process is, essentially, just an administrative burden.
Situations where you will want to register your business for VAT are: when you intend to do business with the South African government, and in the case where large companies insist that you must be registered for VAT to do business with them.
If you want to register your business for VAT you will need the following when you visit a SARS branch:
- Three months’ original bank statements (which need to be stamped by the bank)
- A certified copy of the Identity Documents (ID) of every one of the directors
- A certified copy of the representative vendor’s Identity Document (ID)
- A letter to appoint the representative vendor, signed by everyone one of the directors and accepted by the registered vendor. (This should be on your company’s letterhead).
- Proof of business address (lease agreement or municipal account in the name of your business)
- Proof of physical address of the representative vendor (municipal account)
- Proof of flow of income in the form of invoices or signed agreements (if the registration is compulsory, then you need proof of an income exceeding R 1 mil., whereas, if the registration is voluntary, you need proof of an income exceeding R 50 000).
- Company registration documents from CIPC
- A written motivation for registering your business for VAT
- A written explanation detailing how your business operations are financed
- Power of attorney signed by the representative vendor
- A written account detailing which accounting system is your company uses
- Confirmation on whether or not your company will conduct exports
- The tax reference number and cell phone number of the representative vendor
- A brief description of the main activity of your business
- The tax reference numbers of every one of your directors
- Original letter from the bank confirming the bank account number, account holder, date the account was opened, etc. (this needs to be on the bank’s letterhead and stamped by the bank to serve as certification)
Step 3: Registering for an Import/Export License