5 Key Considerations when Importing Goods into South Africa
We’re living within a highly connected world. Today ordering a product from the United States, China, the United Kingdom or Europe is fairly simple, and will in all likelihood get to you within a short time frame and meet you at your doorstep.
This globalised market has made it a reality for many small business owners in South Africa to extend their products to those that are imported from around the world. By importing products, South African businesses are able to gain more of a competitive edge, through access to products at a competitive price and wide variety.
While the opportunity is available, it’s important to be conscious of the rules, regulations, and pitfalls of becoming an importer of goods to South Africa. At Inter-Sped we’ve worked with businesses that both import and export products, providing us with a comprehensive understanding of the import market, and how to make the most of it for your business.
First up, let’s take a look at the basic requirement for locals vs foreigners who wish to import to South Africa. According to the South African Revenue Service (SARS), “Any person (local or foreign) who imports goods into South Africa must register as an importer including the importation of continuous transmission commodities (CTC). Any foreign importer (e.g. individual or juristic person) who wishes to import goods into South Africa must register as an importer and nominate a registered agent located in South Africa before such foreign importer will be registered to import goods into South Africa.”
In this article we’ll cover 5 key considerations to take into account when importing goods into South Africa.
1. Gain a Clear Understanding of Import Regulations and Compliance Requirements
- Overview of Import Regulations: There are legal bodies within South Africa that manage import and export services within the country. In particular these are SARS, and the Department of Trade Industry and Competition (the dtic). These legal entities set out and enforce the regulations that you will have to comply with if you would like to import (or export) through South African borders.
- Key Compliance Requirements: In order to import goods into South Africa, you will need to register with SARS as a customs client and get an importers code. Thereafter you will need to apply to the International Trade Administration Commission (ITAC) for an import permit. Permits help to control the flow of goods, and ensure that your goods comply with standards set out by the South African government.
- Documentation: It’s vital that you have all the right documentation needed when registering and applying for permits to avoid unnecessary delays. These documents can include, amongst others, the Bill of Entry, Commercial Invoice, Packing List, Import permits and licences and Certificates of Origin.
2. Consider Applicable Tariffs and Duties You Will Incur
- Tariff Classification and HS Codes: When you decide to import products into South Africa, you will be charged a rate to do so, which is calculated using the Harmonized System (HS) code. This is a globally standard numerical method to classify traded products. Depending on the HS Code you’ll be charged a particular import duty and tax.
- Calculating Import Duties and VAT: Depending on your product, you will be liable for import duties. These include: Ad Valorem Duties, Specific Duties, Mixed Duties. To calculate import duties, multiply the customs value of the goods by the applicable duty rate determined by the HS code classification. Another consideration in South Africa is VAT. The standard rate of VAT is 15% and this is charged on most imported goods.
- Using Trade Agreements: South Africa is a member of a number of trade agreements, which provides zero tariffs on products that are imported by member countries. Some of these include: The Southern African Development Community (SADC) Free Trade Area; The European Union-Southern African Development Community Economic Partnership Agreement (EU-SADC EPA); The African Continental Free Trade Area (AfCFTA).
3. Be Aware of Import Restrictions and Disallowed Products
- Restricted and Prohibited Goods: When importing into South Africa, you need to be fully aware of certain categories of goods that restricted from being imported (i.e. they require special permits or licences) or those that are not allowed to be imported at all – this includes items such as certain chemicals, weapons, or endangered species.
- Health and Safety Standards: Some items that are being imported into South Africa such as electronic products, pharmaceutical products, or food may require further certifications or even testing (especially in the case of pharma) before being granted entry. It’s vital that you are aware of the health and safety standards and requirements to ensure efficiency and that your products do not get blocked.
4. Logistics and Supply Chain Management
- Choose wisely: When it comes to importing and exporting, selecting a reliable and professional freight forwarder is essential. At Inter-Sped we have over 36 years experience in the freight forwarding business. Our expertise and skill-set allow us to provide services across the full spectrum from customs clearance to freight forwarding, warehousing, distribution and more.
- Navigating South African Ports and Infrastructure: Understanding the various ports of entry and the infrastructure at each port, will allow you to import your goods efficiently and with little delay. It’s important to be fully aware of the procedures at each port, and comply with these. Chat to the professionals at Inter-Sped for the guidance you need and assistance to make this a pain free and smooth exercise.
- Risk Management and Insurance: It is customary to reduce risk and insure your goods before going about the import process. Moving products around the world and Importing goods into a country brings with it the risk of loss due to damage, theft or delays in transit.
5. Stay Abreast on Regulation Changes and Market Conditions
- Updates and Monitoring: The regulations, processes and tariffs are liable to change at any given time, without prior notice. It’s important when importing goods into South Africa to stay ahead of these changes, to avoid being surprised by change in cost, or having your import delayed. Relying on professionals such as Inter-Sped who provide you with weekly market conditions and updates is vital. Subscribe to the Inter-Sped newsletter to stay in the know here.
- Fluctuations in Market and Currency: Our volatile local and global market requires us to stay updated on these changes at all times. These changes to the local Rand can have a direct effect on your import cost.
Importing goods into South Africa is not an impossible feat. Partnering with professionals who walk the freight forwarding, import export road everyday will place you in good stead to import goods safely, securely, on time and at competitive costs. We will advise you on strategies to mitigate your risk, and keep you informed every step of the way. For more information contact us.
