Exporting to South Africa - Getting into the market

There’s plenty of advice available for UK firms considering adding South Africa to their list of export destinations from the big international professional service firms to specialist operators. Getting good quality, independent legal advice is seen as a must for South Africa – especially before signing documents or contracts. This advice is not cheap but it may well be cash well spent to protect your interests especially in terms of patents or intellectual property.

As in many overseas locations the easiest way to market is by selecting an agent or distributor who can give your products prominence in the country. They have the in-depth local knowledge and can help you quickly grow a market share. Remember that agents work on commission while distributors buy and sell your products. You need to closely examine the options to find out which is likely to work best for you.

Sending senior members of management to South Africa achieves the twin purpose of reassuring local representatives and finding out first-hand about market conditions. It’s advisable to work closely with your partner to demonstrate how they can profit from the arrangement. Linking rewards to performance and agreeing on targets are also effective strategies.

Close corporations are a popular way of setting up a company and are comparatively cheap and uncomplicated to establish. Partnerships are also widely used especially when it comes to joint venture projects. It’s essential to understand contractual agreements about partnerships and ensure that roles are responsibilities are clearly laid out. Joint ventures tend to be favoured by larger corporations.

Franchises are another viable option. South Africa’s franchise industry employs more than a quarter of a million people. Partly or wholly acquiring a South African company is another possibility.