REGERINGSHULP

The South African Departments of Trade and Industry and of Small Business Development offer a wide range of support programmes, of which most are on the basis of non-repayable cash grants and a few are in the form of repayable finance schemes. The department of Finance, through the tax act, and in collaboration with other departments, also offers some additional tax allowances in respect of investment cost. Following below are short descriptions of these programs.

Note: The descriptions below are either freehand definitions or extracts from official guidelines, and are intended to help the reader form a basic understanding of what the programs are about. These descriptions are neither complete nor are they intended to be used for interpretation of the rules of the programs. If you are interested to know more, please consult with Dectra or enquire at the authorities for more complete information.

IMPORTANT

Changes to the programs listed below, can happen at any time and similarly, new programs can be announced when least expected. By subscribing to our newsletter, you will ensure that you are informed of any such important announcements. Have a look on the HOME or the CONTACT US tabs on this website for the subscribe facility where you can subscribe by a click of a button.

GRANT PROGRAMS (Updated February 2020)

  • Agro-Processing Support Scheme (APSS)

    The program offers a 30% cash grant to small projects and a 20% cash grant to medium/large projects, with an overall maximum grant per applicant of R20 million.

    The program has been running since 2017. There is a possibility that it will be revised during 2020 to make it more accessible.

    The program guideline contains some strenuous BEE requirements. Applicants have to be in possession of a Level 4 BEE certificate. Also, applicant companies must source no less than 30% of their raw materials from black producers. "Black" company in this context means a company owned more than 50% by previously disadvantaged persons.

    The following is an extract form the Scheme's guidelines.

    New and existing agro-processing/beneficiation projects. This can also involve a wide range of processing or beneficiation activities of post-harvest, that result in value addition and/or enhanced storage life, such as cleaning, sorting, grading, waxing, controlled ripening, labelling, packing & packaging, warehousing, canning, freezing, freeze drying, wood carving, extrusion, synthesizing, polymerisation, and various levels of processing that change agricultural product form. In the forestry value-chain may also include sawing, pulping, peeling and preservation.

    The APSS will be targeted at five (5) key identified sub-sectors (focus areas) as follows:

    (i) Food and beverage value addition and processing (including Black winemakers);

    (ii) Furniture manufacturing;

    (iii) Fibre processing;

    (iv) Feed production; and

    (v) Fertilizer production.

  • Aqua Culture Development Enhancement Program (ADEP)

    A new program was launched during 2019. This program offers a cash grant on investment cost in marine and fresh water activities. Qualifying activities include cultivation, processing and ancillary activities such as feed manufacturing, research and Development and veterinary services.

    The grant is calculated as a percentage of your investment in fixed assets, infrastructure and in competitiveness improvement activities, to a maximum amount of R20 million. The percentage varies between 30% and 50%, with smaller projects receiving the highest percentage. A special dispensation exists for small black producers, i.e. entities with 100% black shareholding and investment cost below R5 million.

    The program caters for new projects as well as for expansions and upgrading of existing projects.

    To qualify, applicants must have a BEE rating not lower than Level 4. In addition, applicants must score at least five on the Economic Benefit Criteria, or they will be disqualified.

    Apply at least 60 days before you start using the equipment commercially.

  • Automotive Investment Scheme (AIS)

    The AIS supports manufacturers of small passenger vehicles, medium and heave commercial vehicles as well as passenger carrying vehicles. The program includes original equipment component manufacturers.

    The AIS provides for a cash grant of twenty percent (20%) of the value of qualifying investment in productive assets in the case of vehicle manufacturers and twenty five percent (25%) of the value of qualifying investment in productive assets by component manufactures and tooling companies. These percentages are enhanced by up to 10% if certain requirements can be reached. There is no set upper limit to the grant value.

  • Black Industrialists Scheme (BIS)

    The DTI's Black Industrialist Policy aims to create opportunities for new and existing black industrialist champions. Champions would be persons who are able to lead as business- or technical experts, are involved and committed to the business and will take financial risk. The shareholding and board of directors must be be controlled by that person.

    A BIS grant of between 30% and 50% is offered on investment in equipment, vehicles and buildings, and the minimum required investment is R30 million. The larger the black shareholding, the larger the grant percentage.The policy not only provides a grant; it aims to satisfy the total financial needs of the proposed project. For this purpose, loan and equity finance is offered through one of the government's Development Finance Institutions.

    The policy applies to manufacturing and related activities (which normally includes the processing and packaging of fresh fruit and vegetables). The blue ocean economy is also included.

    NOTE: It is hoped that a BIS lite program will soon be launched to cater for projects smaller than R30 million.

  • Black Business Supplier Development Program (BBSDP)

    This program was closed in 2018 and there appears to be no intention by the the Department of Small Business Development to revise or reopen it.

  • Capital Projects Feasibility Program (CPFP)

    The Capital Projects Feasibility Programme (CPFP) is a cost-sharing grant that contributes to the cost of feasibility studies likely to lead to projects that will increase local exports and stimulate the market for South African capital goods and services.
    The grant is offered to a maximum of 50% of the total costs of the feasibility study for projects outside Africa and 55% of the total costs of the feasibility study for projects in Africa and is capped at R8 million.

  • Critical Infrastructure Grant (CIP)

    The Critical Infrastructure Program (CIP) offers a grant at rates that vary between 15% and 50%.

    When you need to invest in infrastructure in order to make further productive investment possible, you are eligible for a grant in respect of that infrastructure cost. Infrastructure in this case refers to those installations without which the new project cannot be undertaken, such as paved roads and bulk water. Also, when you need to make an investment in order to sustain an existing operation, e.g. invest in Solar and Green Energy, you will be eligible for support in respect of such investment cost.
    Note that production equipment, vehicles and buildings do not qualify. It is a requirement that the public must benefit from the infrastructure in question. The BEE requirement is Level 8, but there are rumours that DTI wants to change it to Level 4.

  • The following industries are eligible for support

    • Manufacturers
    • IPAP priority sectors
    • Mineral beneficiation, agriculture and construction
    • Mining and other labour absorbing sectors
  • Clothing and Textile Competitiveness Improvement Program (CTCIP)

    This program ended in 2019, but the promise from the authorities is that it will reopen on 1 April 2020 in a revised form. The description below is now outdated, but still provides some information on how the old program was structured and what can be expected form the new program.

    The CIP is based on the belief that competitiveness improvement is best achieved through value chain networking and partnerships. The CIP is thus based on cluster formation of either similar manufacturing entities or a value chain cluster, comprising e.g. manufacturers, suppliers and retailers in order to engage in collective improvement activities which are more cost effective and could include benchmarking, supply chain interventions and value chain integration where competitive advantages are identified. Two types of clusters are proposed, ordinary and national clusters. Qualifying expenditure are categorised into, people; product; process; market development and technological innovation. Grants for Ordinary clusters are offered at 75%, with a maximum cumulative amount of R25 million. Grants for national clusters start at 100% in year one, then taper down to 70% in year 5, with no set maximum amount.

  • Export Marketing and Investment Assistance (EMIA)

    The program aims to improve export performance by subsidising the export promotion efforts of entrepreneurs dealing in goods. Services are generally, excluded. A cash grant based on the cost of travelling, accommodation and participation is paid into the bank account of the applicant. Applications have to be submitted well in advance.

  • The program consists of the following components:

    • Exhibition assistance. Participation as a private exhibitor or as part of a national pavilion is supported.
    • Primary Market Research. Travels abroad as well as international product registration, e.g. patents and trademarks, are subsidised.
    • Trade Missions. Private missions as well as missions by organised industry are subsidised, both outward and inward.
  • Film and Television Production Incentives (FTP)

    This program aims to develop the film industry and attract filmmakers to the country. The grant is calculated as a percentage of the local production expenses and varies between 25% and 35%. Applications have to be submitted before the start of primary shooting. The following programmes are offered:
    Locational Film Production - This is aimed at foreign film producers making films in South Africa.
    SA film production and co-production - This is aimed at South African film producers.
    SA Emerging Black Filmmakers - A grant of up to 50%

  • Global Business Services (GBS)

    This program is effective from 1 January 2019. It replaces the previous program, Business Process Services. According to a briefing by the Minister of Trade and Industry, the program's objectives are to attract foreign investment and create employment, especially for the youth.

    Companies offering business process services internationally, such as international call centres, may qualify.

    A 5yr base incentive on a reducing sliding scale is offered in respect of new jobs created, plus a bonus payment at the end. The support offered by the GBS differs from that offered by the previous Business Process Services in that it differentiates between the various levels of skills employed in global services.

  • Green Tourism Incentive Program (GTIP)

    The GTIP is in its third year and due to end on 31 March 2020. However, we have been informally informed that the guidelines are being re-evaluated with a view to revise and extend the program.

    The aim is to improve resource efficiency in the tourism sector. A grant is offered in respect of the cost of conversions such as Renewable energy, Energy and water efficient equipment, lighting, Energy and water efficient appliances, water sourcing systems, Resource management systems, other efficiency solutions, e.g. gas stoves, solar cookers, pool pumps, etc.

    Businesses who provide a service to tourists as their direct clients, are eligible for the grant.

    The grant percentage varies from 30% to 90% and the percentage awarded to an applicant is determined by a merit score. The factors considered are, size of the undertaking, BEE level; Impact of the proposed resource efficiency improvements.

  • Isivande Women's Fund

    The Fund is managed by the Industrial Development Corporation (IDC) on behalf of the DTI through a development fund manager. IDF Managers is an SME financier aimed at supporting the creation of self-sustaining black and women owned businesses in South Africa by providing primarily financial and non-financial support to investee companies.

  • The women enterprises have to meet the following criteria:

    • At least 6 months in operation;
    • Requires early stage, expansions and growth capital;
    • 50% plus one share owned and managed by women;
    • Have potential for growth and commercial sustainability; and
    • Improved social impact in the form of job creation.

    Eligible business plans requiring funding of R30,000 to R2 million are invited to submit their applications for review by the IDF Managers.

  • JOBS Fund (Offered by Department of Finance)

    The program aims to create jobs by supporting innovative projects with the potential to create many jobs at low cost. A grant of 50% is usually offered. The fund works in rounds that run for about 3 to 6 months at a time. Applicants can only apply for projects that fall within the definition of a specific round. Although the program officially closed in 2019, rumour has it that it has funds left and there will be another round.

  • MCEP Low Interest loans (MCEP loans)

    Although the MCEP grant program is closed, loans at 4% p.a. interest rate are offered to those manufacturing entities who are compliant with the MCEP guidelines. These loans are offered only in respect of proven additional production orders and cannot replace existing finance. Furthermore these loans are only for pre- and postproduction working capital requirements, except in the case of companies with majority black shareholding. Repayment period is 48 months. Loans are offered through IDC against their normal criteria.

  • Production incentive (PI)

    The PI was closed early in 2019, with the promise that it will be restarted in a revised form by 1 April 2020. The rules below are those of the closed program, but give some indication of what can be expected from a new program.

    The program aims to assist the Textiles, Clothing and Leather Goods industries in their efforts to become more competitive. A cash grant is offered, calculated as a percentage of the applicant's Manufactured Value Addition in the previous financial year. The grant may be used in a variety of ways, e.g. upgrading of production equipment; developing people; improving processes, optimising materials usage and developing new products. Retrospective applications are allowed.

  • Strategic Partnership Program (SPP)

    The objective of the Strategic Partnership Programme (SPP), is to encourage large private sector enterprises in partnership with government to support, nurture and develop SMEs within the partner's supply chain or sector in order to be manufacturers of goods and suppliers of services in a sustainable manner. The programme is intended to support Broad-Based Black Economic Empowerment (BBBEE) policy through encouraging businesses to strengthen the element of Enterprise and Supplier Development (ESD) of the Codes of Good Practice.
    The supported strategic-partners are expected to develop and support programmes/interventions aimed at enhancing the manufacturing and services supply capacity of suppliers with linkages to strategic partner's supply chains, industries or sectors.
    The programme offers a cost-sharing grant to a maximum of R15 million towards the total qualifying costs, based on the number of suppliers to be supported. The grant support is available for machinery and equipment, infrastructure, commercial vehicles and business development services necessary to grow enterprises to ensure that within a period of three (3) years, the SME's will have developed to be self-sustainable by providing locally manufactured products and/or services relevant to the sector.

  • Sector Specific Assistance Scheme (SSAS)

    Organisations supported under SSAS include Export Councils, Joint Action Groups, Industry Associations and those involved in the development of emerging exporters.

  • The Objectives of the Sector Specific Assistance Scheme

    • Developing an industry sector as a whole
    • Developing new export markets
    • Stimulate job creation
    • Broadening the export base
    • Proposing solutions to factors inhibiting export growth
    • Promote broader participation of black owned and SMME's to the economy.

    Grants are divided into three categories: General funding; Project funding and Project funding for emerging exporters. Grants offered go as high as 80%

  • Support Programme for Industrial Innovation (SPII)

    The Support Programme for Industrial Innovation is designed to promote technology development in South Africa's industry, through the provision of financial assistance for the development of innovative products and/or processes. SPII is focussed specifically on the development phase, which begins at the conclusion of basic research and ends at the point when a pre-production prototype has been produced.

  • The SPII offers two schemes namely,

    • Product Process Development (PPD) Scheme. Grants of 50% are offered to a maximum of R2 million. However, black ownership can enhance the grant to as high as 85%, but still limited to R2 million.
    • SPII Matching Scheme. Grants of 50% are offered, but this can be enhanced through black shareholding to as high as 75%. Grant limit is R5 million.
  • Seda Technology Program (STP)

    Seda Technology Programme (STP) is a division of seda (Small Enterprise Development Agency) focusing on technology business incubation, quality & standards and technology transfer services & support to small enterprises.
    STP provides a range of services that assist small enterprises, particularly enterprises in the 2nd economy, to access and acquire technology.

  • The Technology Transfer Unit (TTU) of STP has two main objectives, namely:

    • To provide technology transfer services to small enterprises; and
    • To provide specific technology support to women-owned enterprises.

    A maximum grant of R600 000 is offered.

  • Technology and Human Resources for Industry Programme (THRIP)

    This program closed during the course of 2019, but it is hoped it will be reopened during 2020. The detail below refers to the now closed program. The program, is intended to leverage collaborative partnerships between government and industry (working with academia) for research and development in science, engineering and technology on a cost-sharing basis, to produce highly skilled human resources and technology solutions, for improved industry competitiveness.

  • The programme is awarded for the following:

    • Applied research and innovation projects as defined.
    • Registration and litigation cost of patents of strategic importance to the South African economy by entities in the IPAP Sectors.

    Grants are offered per project, and project requirements include inter alia,

    • The project must be applied research in the fields of science, engineering and/or technology whose outputs could make a significant contribution towards improving the industry partner's competitive edge;
    • The project intention should be to innovate, i.e. should lead to the creation and transfer of new knowledge into a process or product (prototype), or the transfer of existing knowledge into a new process or product to benefit the industry partner.

TAX ALLOWANCES (Updated February 2020)

  • Section 12 (i) of the income tax act, generally referred to as Industrial Policy Projects (IPP), offers an income tax allowance for investment in manufacturing projects is offered, based on the cost of the project. The maximum available allowance is R600 million per project. Although the program is officially closed, applicants can still try their luck to see if there is any funds available.
  • Section 11(d) offers a 150% deduction in respect of research and development cost.
  • Section 12 l offers a tax allowance of 95c per Kwh saved to industries who invest in initiatives to save energy.
JONGSTE NUUS

5 April 2019: APSS heropen vir aansoeke April 2019

Die Agro-Processing Support Scheme ("APSS") het op 1 April heropen vir aansoeke.
Lees verder...

 
Level 4 BEE Certified 100% Recognition  

Dectra word een keer per jaar geevalueer en ‘n kopie van ons sertifikaat is op aanvraag beskikbaar.

ICA - Icentive Consultants Association Member  

Die ICA is 'n vrywillige vereniging wat hulle beywer vir goeie etiese- en kwaliteitstandaarde van hul lede, asook vir die bevordering van kommunikasie en goeie werksverhoudings met die Departement van Handel en Nywerheid. Dectra is 'n stigterslid van die ICA.

www.incentiveconsultants.co.za

ISO 9001

 

Ons kliënte vertrou ons met waardevolle transaksies en het die versekering nodig dat ons oor die beste kundigheid asook goeie interne beheerstelsels beskik. Ons ISO 9001: 2015 kwaliteitsbestuurstelsel verskaf daardie versekering.