Global Business Services Incentive Offered by the DTI

The Global Business Services Incentive provides an enabling environment for potential investors coupled with a deeper domain skills advantage, significant cost savings among other global locations, and providing a world-class experience for those who set up their operations in South Africa.

The primary objective of the incentive is to create employment in South Africa through servicing offshore activities. The secondary objectives of the programme are to:

Create employment opportunities for the youth (18 to 34 years of age); and
Contribute to the country’s export revenue from offshoring services.

The incentive comprises two components.

Base incentive: A three-tier differential incentive for non-complex jobs, complex, and highly-complex jobs, based on the fully-loaded cost per job. The base incentive is a five-year operational expenditure (OPEX) grant that tapers down in line with the narrowing cost gap between South Africa and other offshoring destinations.
Graduated bonus incentive: Offered for greater job creation and sustainability, if the applicant exceeds certain annual offshore job creation targets.

The applicant must:

Be a registered legal entity in South Africa in terms of the Companies Act, the Close Corporations Act, or the Co-operatives Act;
Be a taxpayer in good standing, and provide a valid tax clearance certificate;
Be B-BBEE compliant in terms of the B-BBEE Codes of Good Practice, and submit a valid B-BBEE certificate of compliance or an affidavit;
Pay a minimum wage of R 5, 000. 00 per month- or- in the case of inclusively hired resources, pay a minimum wage of R 4, 000. 00 per month for the first twelve months of employment;
Be involved in starting a new operation or in expanding an existing operation, in order to perform Global Business Services activities , which may be operated from more than one physical location in South Africa;
Submit an application for the incentive prior to the engagement of qualifying jobs;
Have secured at least a three-year fixed-term contract for offshore activities; and
The project must be financially viable and a going concern.

The Department of Trade and Industry (the DTI) will determine whether a project is eligible taking the following into account:

For projects performing mostly ( ≥ 50 %) non-complex jobs (Tier 1), the project must create a minimum of 50 new offshore jobs within three years from start of operation and employ at least 80 % youth as part of the approved project;
For projects performing mostly ( ≥ 50 %) complex and highly complex jobs (Tier 2 and 3) combined, the project must create a minimum of 30 new jobs within three years from start of operation and employ at least 60 % youth as part of the approved project;
The project must commence with operations and employment not later than six months from the date of incentive grant approval. Failure to reach this target date will lead to the cancellation or disqualification of the application, thus requiring the applicant to submit a revised application to reapply;
In case of a joint venture arrangement, at least one of the parties must be registered in South Africa as a legal entity; and
A pilot project that will result in an investment and creation of jobs within that six-month trial period.