This dissertation evaluates the South African headquarter company provisions and their suitability as a gateway for investment into Africa, when compared with the UK, Netherlands and Botswana. When considering how the South African headquarter company provisions have developed since their re-introduction in 2011, it is evident that the regime is beneficial; specifically through the absence of the controlled foreign company (‘CFC’) rules, transfer pricing concessions, and the conclusion of double tax agreements (‘DTAs’).
When compared with a similar taxing jurisdiction such as the UK, South Africa appears equally competitive. The UK has also identified its tax regime as an ideal holding or headquarter location for business activities into the rest of the world (including Africa). The UK has affirmed its commitment as a holding company jurisdiction through the reduction of its corporate income tax rate, the overhaul of its CFC provisions, and the absence of exchange control and dividends withholding tax.
As a result of the UK’s historical presence in Africa, it too has an extensive DTA network in Africa. Upon closer inspection, it appears that concessions available to a UK resident company are similar to a South African headquarter company.
When compared with other African jurisdictions, the Botswana IFSC regime appears less competitive than the South African regime. Similarly, the ‘traditional’ use of a Netherlands holding company appears to be better suited as a holding company regime for business activity in Europe.
Accordingly, the South African headquarter company provisions provide efficient, practical and commercial concessions for multinationals as a gateway into Africa.
Mini Dissertation (LLM)--University of Pretoria, 2015.