Black Economic Empowerment (BEE) and Small Business South Africa
The government controls the BEE program through the Economic Strategy of 2003. Organizations must comply with BEE regulations if they want to qualify for several of the incentive schemes or obtain contracts from the government. The BEE strategy aims to empower previously disadvantaged blacks through management positions and ownership of businesses. According to the strategy, businesses must have a set percentage of black people in management, shareholding and partnerships. Any person or company who wishes to establish an operation in South Africa should get acquainted with the procedures and regulations.
Each sector has its own BEE scorecard that indicates how well a business has adapted to BEE requirements. The process of becoming BEE compliant was published by DTI in 2004. The plan outlines voting rights, economic interests, and accrual of bonus points, human resources, and investment policies regarding empowered entities. Businesses that are not BEE compliant will be penalized in the near future.
Enterprises are classified according to the total of blacks in top or ownership positions:
* Black enterprises have more than 50% black ownership.
* Black empowered businesses have 25% or more black ownership or one
quarter of the managers are black people.
* Black influenced businesses have 5.1% black ownership.
* Black engendered enterprises have more than 25% black women managers.
* Black community endeavors have at least one black shareholder that represents
the larger group.
If you plan to open a business in South Africa, you should consider a BEE partner, as this will enhance your chances for obtaining large contracts and better finance.
Small Business South Africa - Black Economic Empowerment and Small Business South Africa
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