South Africa is known as the Republic of South Africa (RSA), and it is an important African country. For foreign exporters as well as for importers, South Africa offers a wide range of opportunities. Since it is a large country with a population of around 55 million people, there are many goods in demand. As a foreign exporter, you can break into the South African market with a variety of goods such as oil, vehicles, plastic, pharmaceutics, or different types of chemicals and food. African customs might be tricky especially for beginner exporters and even delay the import-export process if you don’t get familiar with them.
The value of imports in South Africa reached $83.2 billion only in 2017, and the perspectives keep improving! However, when you want to trade in South Africa, there are certain regulations that you need to consider. To ease your job here is step by step guide to importing into South Africa and you can be successful with it!
1. The basics and the necessary research
The first step to import into South Africa is paying attention to the basics of such a process. You need to decide the type of goods that you want to import into the country and what are your means for it. Study the market and observe the demands that are present on it! You can research on forums and talk to locals or even take a trip to South Africa if you afford it. However, if you are a local importer, it will be a lot easier to research the market and act according to its needs.
After you identified the best opportunities of the market, try to look into your possibilities to meet the demand. When it comes to trading into South Africa, you might find more than one type of goods that are worth to import. And the more goods you import, the more profit you will make and the more recognition you will obtain on the local market.
The demand of the South African market tends to be in constant change which is why it’s important to stay informed. Adapting to the local market is an essential aspect of your business, and it can open new opportunities for you as an importer for the long run. Be active and never stop your research when you are planning to supply as many goods as you can on different categories of the market!
2. Pay attention to details
The main details that you need to pay attention to are the details regarding the type of goods you import. Be as descriptive as possible and don’t get generic when it comes to your products. For instance, if you are importing certain types of clothes don’t just describe your product as “clothes.” Instead, specify the material, the type of cloths that you are importing such as dresses, suits or workout clothes and the colors that they come into. Such specifications will make the difference when it comes to duty rates and the more accurate you are, the best your import process will be. Being detailed in your descriptions will provide all the needed information which will speed up your import process.
Make sure to say if your goods are samples or mass imports that come in large quantities. The South African Revenue Service (SARS) will check your declarations and evaluate your goods which is why is important to include as much information as possible. Pay attention to the commercial value that you declare as well because a mistake in this aspect can cost you a significant fee.
And no one wants to lose funds during the import process! Such values can be different from one import to another, and you can be easily lured into declaring a different value than the real one by your exporter partner. Think that the exporter will always want to pay less for shipping and this can tempt them to negotiate the declared value of the goods with you. But it is not in your interest to fall into that temptation as well because the fees you might end up paying are not worth it!
3. Register as an importer and other must-have documents
To import legally into South Africa, you will need to be registered with SARS. To register with them, you will have to go to their website and follow their online forms. By the end of the registration process, you will be given a unique code that allows you to import whenever you need. This code will also be used by SARS to pay attention to your goods and declarations. If you are a beginner in the process, you will have the option to register as an irregular importer. This status will allow you to import different goods three times a year. And you can always change it to a regular importer should you need to.
After you register, there will be a variety of documents that you need according to the types of goods you are importing. These can vary from import to import, but the basic ones are the following:
– Customs Entry document – as part of the South African customs
– Legal Undertaking (LUT) – only needed to obtain import benefits from African government
– Purchase order or Letter of Credit between South Africa importer and overseas supplier of goods
– Bill of Lading – for sea imports or Airway Bill for air imports
– Certificate of Origin – issued by the country of origin of the goods you are importing
– Insurance Certificate – this is issued by the government, and it might not apply to all imports
– ATA CARNET – it is used as a temporary shipment certificate if needed. It depends on the shipping method that you choose
– Certificate of Free Sale – for goods that are not imported for sale
Besides these documents, you might be required to provide others according to the customs in South Africa and the type of goods that you are trading. Don’t worry if you are not familiar with these procedures yet because a lawyer can help you a lot during your international trading process. Your team will also keep researching the documents that you need and keep you informed about new legal matters that you need to consider during such a process. While this may seem overwhelming, by the end of this article, you will find a simpler solution to apply during the import process.
4. Shipping process
Once you have the papers and other basics in place, you will need to decide on a type of shipment method. You can import goods by using South African ports or the airports. While the procedure is similar regarding documents, there are differences regarding costs and time that you have to consider. Importing by sea takes several days or even more while importing by air can happen even on the same day, depending on the availability and type of cargo. This is why imports by air also tend to be pricier than those made through certain local ports. But it is important to consider the country where the goods are coming from as well. South Africa imports products from all over the world and locations are crucial when you decide the shipping method.
After you decided the way your goods will enter the country, there is another entire process to be followed. You will need to complete different forms to get the goods from the customs area of South Africa, where they will be kept after arrival. You might be required to take permission from the customs authorities, permission from Carrier of goods and in some cases, permission from the custodian of cargo especially if you import your goods through a port.
The good news is that local authorities will provide you with all the needed documents that you need to fulfill to simplify the process some. You can get these documents yourself or put it in the responsibility of your customs broker. The basic documents needs may include but not be limited to Bill of Lading or Airway bill, commercial invoice, packing list, Cargo Arrival Notice, Freight certificate and purchase order.
If you want to avoid unnecessary taxes that you might pay for certain delays, make sure you track your shipment and have the documents ready by the time the cargo reaches the destination.
5. Goods to avoid
Now that you got an idea about the import process, you might need to pay attention to certain goods that are not worth the trouble. During your research process, you might be tempted to import more goods than you should because the needs of South Africa are very diverse. But before getting into the details, you also should be aware of the type of products that are not allowed into South Africa and here are some examples:
– Second-hand cars
– Certain pharmaceutics that is not approved by South Africa’s medical council
– Plant materials that don’t have a license
– Certain animal products including animal skins
– Certain liquids including alcohol-based ones
– Cigarettes with a mass of more than 2kg per 1000
– Prison-made and penitentiary-made goods
These are the main categories of goods that are not welcome to enter the South African market, but for a more specific list, you have to consult with SARS. If you have any questions regarding your goods and the legal system in South Africa, it is better to double check! For goods that represent some danger, you will need to provide a Material Safety Data Sheet and declare the amount of risk that your products present. For instance, this can apply to flammable items. You might need to pay an import tax South Africa, if your goods are still legal but only dangerous.
Goods Exported From South Africa
While South Arica creates a lot of possibilities for importers and foreign exports, the country also exports a variety of goods worldwide. The main South African exports are as it follows:
– Gems, precious metals: US$14.9 billion (16.7% of total exports)
– Ores, slag, ash: $11.3 billion (12.6%)
– Mineral fuels including oil: $10.6 billion (11.8%)
– Vehicles: $9.8 billion (11%)
– Iron, steel: $6.1 billion (6.8%)
– Machinery including computers: $5.4 billion (6%)
– Fruits, nuts: $3.4 billion (3.8%)
– Electrical machinery, equipment: $1.8 billion (2%)
– Aluminium: $1.8 billion (2%)
– Beverages, spirits, vinegar: $1.4 billion (1.5%)
In the past two years, South African exports products that reached the best success rate are mineral fuels such as oil, as well as gems and precious metals such as gold. As for restrictions, South Africa is not allowed to export any equipment with a GPS to countries like Iran and alcohol can’t be exported to Saudi Arabia. While such details might not be of your major concern as an importer, it helps to be aware of them in case you want to extend your business to an import-export type of international trading.
Local productions in South Africa are used to supply the needs of other countries around the world but also to export goods to other African countries. Exports between African countries are more affordable than the international trading process, and they can be a priority when it comes to the continental demands. Nigeria is dependent on other African countries when it comes to imports such as food and clothes, and South Africa provides a big percentage of these products which is why they struggle with the internal needs of the country that are not fulfilled.
The economy of South Africa is based on exports and costs of production, and the country exported goods in the value of over 88 billion USD in 2017. But local producers are planning to beat that number in the next years especially when it comes to exporting gems and fuels!
Overall, South Africa is a mixed economy and the second one after Nigeria which makes it a rather rich African country. Its GDP is also high when we compare it to other African countries. But all these good numbers don’t eliminate the poverty and high rate of unemployment in South Africa. Even if starting with 1994, inflation was brought down; the life in South Africa didn’t change much. People work in the field and try to produce the necessities of food to live on as well as to export in the name of the country’s economy. Many South Africans work on the black market which is only making the economy worse in the long run even if it is a way to gain a salary for most of them.
All these aspects might not be directly related to the import-export trading business, but they certainly influence its outcomes. As an importer, you need to be aware of the country’s economy to identify its needs and even attract foreign investors. Foreign investors would help the economy by developing businesses and offering people legal jobs but also by offering goods at a much better value since they are produced locally.
It is another way to make a profit as an importer in South Africa, and once you get a constant investor partner, you can be sure that your profit will improve, and you will make a positive impact on the country. To get there though, you need to understand how the market works and offer the best advantages to the potential foreign investor. Put together a plan and start “hunting” for potential businessmen all over the world to attract them to invest in South Africa. It is a long journey, but it can be well worth it for many years to come!