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In this page: FDI in Figures | What to consider if you invest in South Africa | Protection of Foreign Investment | Procedures Relative to Foreign Investment | Office Real Estate and Land Ownership | Investment Aid | Investment Opportunities | Sectors Where Investment Opportunities Are Fewer | Finding Assistance For Further Information


FDI in Figures

Global foreign direct investment (FDI) flows in 2021 were USD 1.58 trillion, up 64 per cent from the exceptionally low level in 2020. The recovery showed significant rebound momentum, with booming merger and acquisition (M&A) markets and rapid growth in international project finance because of loose financing conditions and major infrastructure stimulus packages. However, the global environment for international business and cross-border investment changed dramatically in 2022. The war in Ukraine – on top of the lingering effects of the pandemic – is causing a triple food, fuel and finance crisis in many countries around the world. Investor uncertainty could put significant downward pressure on global FDI in 2022. The 2021 growth momentum is unlikely to be sustained. Indeed, world flows in the second quarter of 2022, the latest data available, were down 31% from the first quarter and 7% less than the quarterly average of 2021 (UNCTAD Global Investment Trends Monitor, October 2022). The negative trend reflects a shift in investor sentiment due to the food, fuel and finance crises around the world, the Ukraine war, rising inflation and interest rates, and fears of a coming recession. Expectations for the full year are for a marked slowdown.

FDI flows to Africa reached USD 83 billion in 2021, from USD 39 billion in 2020. Most recipients saw a moderate rise in FDI. The total for the continent was inflated by a single large intrafirm financial transaction. Greenfield announcements remained depressed, but international project finance deals were up 26 per cent, with strong growth in extractive industries. Compared to other countries in the African continent, the potential attractiveness of South Africa is high. However, its performance is relatively weak for FDI attraction, despite progress owing to investment potential in infrastructure. According to data published in UNCTAD's 2022 World Investment Report, FDI inflows increased from USD 3.1 billion recorded in 2020 to USD 40.88 billion in 2021. FDI stocks increased from USD 136 billion in 2020 to USD 173 billion in 2021, compared to USD 151 billion in 2019. Data from the OECD shows that in the first half of 2022, FDI inflows reached a total of USD 4.28 billion, up from USD 2.67 billion year-on-year. The country has traditionally been a key investor; however, this trend has been reversed by the pandemic: outward investment was negative in 2020 (by almost USD 2.0 billion) and in H1/2021, as South African multinationals repatriated capital from abroad.

The Ramaphosa-led ANC administration encourages foreign investors as they are responsible for job creation and wealth-creating economic growth. Traditionally, European countries are active investors in South Africa (United Kingdom, Netherlands, Belgium, Germany and Luxembourg), as well as the United States, Japan, China, and Australia. Most of the investments are directed to the financial, mining, manufacturing, transportation and retail sectors. Beijing Automotive Industry holding, BMW, Nissan and Mainstream Renewable Energy have been the largest investors in recent years. In addition, the Musina/Makhado SEZ, along principal north–south route into the Southern African Development Community and close to the border with Zimbabwe, offers a strategic location to attract FDI. The country currently counts with five Industrial Development Zone (IDZ).

The country is ranking 48th amongst 82 countries reviewed in the latest Economist Intelligence Unit business environment rankings for 2022-26. Deteriorations in some areas, such as the macroeconomic environment (because of sluggish growth, very high unemployment and fragile global conditions) are offset by improvements in others, including market opportunities and trade policy.

The country has many attractive assets for investors such as an important demography; a diversified, productive and advanced economy; abundant natural resources; a transparent legal system, and a certain political stability. The government offers various sector-specific investment incentives, such as tax allowances to support in he automotive sector and rebates for film and television production. However, South Africa suffers from a high crime rate, increasing social unrest (strikes and demonstrations), high levels of corruption, and structural issues in electricity supply and logistics. Investors are also worried about the lack of clarity concerning policy and structural reforms. Investment potential is hampered by legal uncertainties which discourage foreign investors, despite the promulgation of the Protection of Investment Act in December 2015, which reinforces legal guarantees for foreign investors. However, the government is working towards making South Africa a more attractive destination for foreign investment. InvestSA - a division of the Department of Trade and Industry - is currently rolling out several OSS (a single-window mechanism to coordinate and support deals by assisting with permit approvals, licensing and registration processes) across South Africa with the aim of making it a more investor-friendly country.

Foreign Direct Investment 202020212022
FDI Inward Flow (million USD) 3,06240,9489,051
FDI Stock (million USD) 133,127174,783173,584
Number of Greenfield Investments* 103119160
Value of Greenfield Investments (million USD) 6,6625,27526,777

Source: UNCTAD, Latest data available.

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.



Main Investing Countries 2019, in %
United Kingdom 29.4
The Netherlands 19.5
Belgium 9.6
United States 6.5
Japan 5.7
Germany 4.5
China 4.5
Australia 4.1
Main Invested Sectors 2019, in %
Financial and insurance services, real estate and business services 39.4
Mining and quarrying 25.5
Manufacturing 16.6
Transport, storage and communication 11.0
Wholesale and retail trade, catering and accomodation 6.4
Community, social and personal services 0.8

Source: South African Reserve Bank, Latest data available.

Form of Company Preferred By Foreign Investors
Private Limited
Form of Establishment Preferred By Foreign Investors
Simple process of establishment, do not require to have statutory general body meetings like public companies, and do not have to submit their annual financial statements with the Registrar.
Main Foreign Companies
Bloomberg has released a new graph detailing the top contributors of foreign investment in SA. The graph – which is based on Reserve Bank data – shows that the UK (R519.4 billion), the Netherlands (R346.3 billion), and Belgium (R285.7 billion) were the biggest foreign investors as at the end of 2017.

Global companies in South Africa

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What to consider if you invest in South Africa

Strong Points

South Africa has large market potential, well developed infrastructure and a competitive domestic economy. The country's democracy is also well-established and the rule of law is observed. As a productive pole, it is the most industrialised, technologically advanced and diversified economy on the African continent.

South Africa's main assets are:

  • The business climate is good and state financial management is competent.
  • The country enjoys a good-sized and active stock exchange.
  • South Africa has shifted from its traditional industries to production and financial services, which are the main contributors to GDP.
  • The tourism and retail sectors have a great potential.
  • The mining sector is a major part of the economy.  It is the world's largest producer of chrome, manganese, platinum, vanadium and vermiculite. It is the second largest producer of ilmenite, palladium, rutile and zirconium. It is the world's third largest coal exporter. South Africa is also a huge exporter of diamonds and iron ore (U.S. Geological Survey).
  • The country also enjoys a strategic geographical location, that makes it an ideal hub to access the sub-Saharan markets.
Weak Points

The economic stability of the country has been weakened by the strict lockdown, which has exacerbated social tensions such as widespread poverty and inequality. Investment (13% of GDP) is also at a standstill due to a lack of business confidence and the postponement of public capital expenditure linked to the diversion of funds for emergency needs.

 Other problems may discourage foreign investors:

  • Increased labour strikes in recent years, which rating agencies have warned could further lower South-Africa's credit rating
  • Violence and corruption continue to hinder the economy, while income inequality remains high
  • Access to electricity is insufficient because of a lack of investment.
  • Lack of high-skilled labour force, high unemployment (33.6% in 2021), rigidity of the labour market
  • Immigration laws make the employment of foreign workers more complicated.
  • Import-export process may be difficult.
  • Economy depends on the ore prices and FDI inflows.
  • Market entry is very competitive, as the market is very mature.
Government Measures to Motivate or Restrict FDI
Nearly all business sectors are open to foreign investors. Government approval is not required and there are few restrictions on how or how much foreign entities can invest. Additionally, the Government has put in place various measures to encourage foreign investments, including simple tax rules, investment incentives, a better regulatory policy on competition and protection of intellectual property. Below are a few examples of these measures: 

  • The 12I Tax Incentive is designed to support Greenfield investments as well as Brownfield investments.
  • 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 Critical Infrastructure Programme (CIP) aims to leverage investment by supporting infrastructure, thus lowering the cost of doing business. The South African Government is implementing the CIP to stimulate investment growth in line with the National Industrial Policy Framework (NIPF) and Industrial Policy Action Plan (IPAP).

For a list of other government incentives for FDI, please visit the Department of Trade and Industry's website.

Despite these measures and a developed economy, some elements may indicate that the government is not convinced of the importance of FDI. Thus, some laws are approved without an initial analysis of the consequences they may have on certain economic sectors.

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Protection of Foreign Investment

Bilateral Investment Conventions Signed By South Africa
South Africa is a signatory to 50 bilateral investment treaties (BITs). To see the conventions, click here.
International Controversies Registered By UNCTAD
The ISDS Navigator contains information about known international arbitration cases initiated by investors against States pursuant to international investment agreements. South Africa is involved in 3 cases as Home State of claimant and in 1 cases as Respondent State.
Organizations Offering Their Assistance in Case of Disagreement
ICCWBO , International Chamber of Commerce
Member of the Multilateral Investment Guarantee Agency
South Africa is a signatory to the MIGA Convention.
Country Comparison For the Protection of Investors South Africa Sub-Saharan Africa United States Germany
Index of Transaction Transparency* 8.0 5.5 7.0 5.0
Index of Manager’s Responsibility** 8.0 3.5 9.0 5.0
Index of Shareholders’ Power*** 8.0 5.5 9.0 5.0

Source: The World Bank - Doing Business, Latest data available.

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Procedures Relative to Foreign Investment

Freedom of Establishment
Acquisition of Holdings

Companies have to appoint a South African resident as the company's legal representative. Any acquisition or disposal by a non-resident entity or person of shares in a South African resident, unlisted company requires approval by the Financial Surveillance Department of the South African Reserve Bank, or one of its Authorised Dealers, under the Exchange Control Regulations. Moreover, foreign companies have to appoint an auditor.

Obligation to Declare
No government approval is required for foreign investors to establish a new business or invest in South Africa apart from the approval required under the Exchange Control Regulations.

The investor will be required to appoint a consultant, auditor, and/or legal advisor to register a company on his/her behalf. The company should be registered within 21 days and must also register with the tax office.

InvestSA, the agency responsible for the promotion of foreign investment in the country, provides advice on where to locate and facilitates regulatory steps such as licensing, company registration and work permits, as well as providing details of financial institutions and funding opportunities.

Requests For Specific Authorisations
South Africa maintains a relatively open investment regime for FDI. Restrictions on foreign investment are not codified in any specific piece of legislation. However, foreign ownership is limited in the following sectors: agriculture, fisheries and marine, broadcasting and print media, defense force, energy and mineral resources and telecommunications and transport.

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Office Real Estate and Land Ownership

Possible Temporary Solutions
However in case the foreign company is of national interest, the South African government provides temporary space for a limited period, say up to 2 years.
The Possibility of Buying Land and Industrial and Commercial Buildings
At the moment there are no restrictions on the ownership of land by foreign nationals or entities in South Africa. Nevertheless, according to the proposed regulation contained in the Land Holdings Bill, foreign nationals will no longer be able to own certain types of land in South Africa (although they will be allowed to enter into long-term leases on all types of land).
Risk of Expropriation
Section 25 of the Constitution provides that no one may be deprived of property except in terms of law of general application, and no law may permit arbitrary deprivation of property.
Subsection 25(2) of the Constitution further provides that property can only be expropriated in terms of law of general application and in the following circumstances:
•    For a public purpose or in the public interest.
•    Subject to compensation (the amount of which and the time and manner of payment of which have either been agreed to by those affected or decided or approved by a court).

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Investment Aid

Forms of Aid
The various forms of aid and incentives provided by government are:

  • The 12I Tax Incentive is designed to support Greenfield investments as well as Brownfield investments. The incentive offers support for both capital investment and training.
  • 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 Critical Infrastructure Programme (CIP) aims to leverage investment by supporting infrastructure that is deemed to be critical, thus lowering the cost of doing business.
  • The Automotive Investment Scheme (AIS) is an incentive designed to grow and develop the automotive sector through investment in new and/ or replacement models and components that will increase plant production volumes, sustain employment and/ or strengthen the automotive value chain.

Among many others:
- Foreign Film and Television Production and Post-Production Incentive (Foreign Film)
- Aquaculture development and enhancement programme
- Agro processing support scheme
- Black industrialist scheme
- Clothing and textiles competitiveness programme
- Export marketing and investment assistance
- Global business services
- Innovation and technology funding instruments
- Manufacturing competitiveness enhancement programme

For more details on investments aids, visit the DTI website and Invest SA website.

Privileged Domains
Infrastructure development (sectors like transportation, telecommunications, and energy), job creation, environment protection, development of manpower skills, creation of healthy competitiveness.
Privileged Geographical Zones
The first Industrial Development Zone (IDZ) was set up in South Africa in 2001. These zones were developed with the aim to increase industrial growth. IDZs offer duty-free import of production-related materials and zero VAT on materials sourced from South Africa, along with the right to sell into South Africa upon payment of normal import duties on finished goods. There are no exemptions from other laws or regulations, such as environmental and labor laws. There are currently five operating IDZs in South Africa, namely: Coega IDZ, Richards Bay IDZ, East London IDZ, Saldanha Bay IDZ, Dube TradePort.
Free-trade zones
No free zones or free ports exist in South Africa. Although there are Sector Development Zones. The SEZ is a zone focused on the development of a specific sector or industry through the facilitation of general or specific industrial infrastructure, incentives, technical and business services primarily for the export market. There are currently five operating SEZs in South Africa, namely: Atlatis SEZ, Nkomazi SEZ, Maluti – A- Phofung SEZ, OR Tambo SEZ, Musina/ Makhado SEZ.
Public aid and funding organisations
Corporation pour le développement industriel(IDC) (en anglais)

Small Business Development Corporation (SBDC)


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Investment Opportunities

The Key Sectors of the National Economy
Mineral exports, industrial sector which includes railway rolling stock, synthetic fuels, and mining equipment and machinery, tourism, financial services, health, fruit production, energy (electricity, renewable, petrol), transport infrastructure, telecommunication and information technologies and and the wholesale and retail trade.
High Potential Sectors
Advanced manufacturing (ICT), Green Industries and natural gas, Service exports and tourism, Agriculture value chain, Infrastructure. 
Privatization Programmes
Among the sectors currently considered for possible privatisation are energy (Eskom), air transportation (South Africa Airlines) and rail transportation (Transnet).
Tenders, Projects and Public Procurement
South African Government Information, Tenders
SA-Tenders, Tenders in South Africa
Tenders Info, Tenders in South Africa
DgMarket, Tenders Worldwide

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Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors

The South African Government retains and exercises control over certain industry sectors and is the primary shareholder of the so-called "state-owned" enterprises. The key sectors in which state-owned enterprises play a key role are the:

  • Electricity generation sector.
  • Transport sector.
  • Diamond sector.
  • Military equipment sector.
  • Forestry sector.

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Latest Update: November 2023