Study finds- time consuming to start SA businesses

15 June 2015

A new report benchmarking the regulatory environment faced by small businesses operating in nine South Africa cities shows that entrepreneurs face quite distinct regulatory burdens depending on the location of their firms. Overall, however, the study found that, while it is relatively inexpensive to start a business in South Africa, it is also time consuming when compared with the performance of 189 other economies.

Titled ‘Doing Business in South Africa 2015’, the inaugural sub-national report, which will be followed up again in 2018, was compiled by the World Bank Group, in collaboration with the National Treasury, the Department of Trade and Industry and the South African Cities Network, with funding support from Switzerland’s State Secretariat for Economic Affairs.

Based on a qualitative and quantitative methodology that assesses the hurdles faced by entrepreneurs in starting a business, dealing with construction permits, getting electricity, registering property, enforcing contracts and trading across borders, it compares the business regulatory environment for companies operating in Buffalo City, Cape Town, Ekurhuleni, eThekwini, Johannesburg, Mangaung, Msunduzi, Nelson Mandela Bay and Tshwane.

It also benchmarks the performance of the ports of Cape Town, Durban, Ngqura, and Port Elizabeth against the performance of harbours in other economies.

The study found that 70% of the total time it took to establish a business in South Africa was taken up by registering the company with the Compensation Fund, a Department of Labour agency.


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