Starting a construction company in SA is relatively easy. We will detail for you some of the basic things that you need to have in place to get started.
If you want your construction company to be eligible for public contracts and tenders, you need to follow a few formalities to ensure you are tax compliant, operating legally and protecting your employees.
We have provided you a guide you need to follow below.
As a first step we recommend to set-up a formal structure for your business. The relatively easier formal structure to incorporate is a private company (Pty Ltd).
If you already have a registered company, click here to check if your company annual returns are up to date.
Once the registration is done you will obtain your company registration number and documents, which will be used to complete all of your compliance registrations.
Tax Compliance Status (TCS) PIN
When you receive your company documents, you will also receive the income tax number. You will need this income tax number to generate your TCS PIN
If you want to obtain the TCS PIN on your own, you can do so by registering an efiling profile for the company and activate your income tax number.
Once the income tax number is linked to your profile you can generate the TCS PIN given that all your returns are up to date and that you do not owe SARS.
Enterprises with an annual turnover lower than R10 million qualify as an Exempted Micro Enterprise (EME) and are exempted from being measured on a BEE scorecard.
If your company earns below R10 million per year, it’s seen as an EME company and would only require a B-BBEE affidavit, which acts exactly the same as a B-BBEE certificate. The affidavit can be downloaded here.
Construction Industry Development Board (CIDB)
If you plan on working in the public sector or applying for tenders registering with the CIDB is compulsory.
When you register your company at the CIDB, you indicate what type of construction your company specialises in. Once registered you will be notified via the CIDB of any construction tenders available in your area.
Letter of Good Standing (LOGS)
In order for an employer to get the Letter of Good Standing, an employer must register with the Commissioner within seven days after the day on which s/he employs her/his first employee.
There is an assessment fee that is payable. This fee is based on the total salaries paid by the company and the risks the employees of the company might face when performing their duties.
Once the assessment(s) is filed and paid, you will be able to generate the LOGS. The letter is valid for 12 months.
National Home Builders Registration Council (NHBRC) Registration
Any person in the business of building homes is required by law to be registered with the NHBRC.
Registration allows access to funding from financial institutions, access to NHBRC home building materials, training programmes and intervention by the NHBRC to maintain a healthy working relationship between the builder and client.
Central Supplier Database (CSD)
The CSD is the official database of all organisations, institutions and individuals who wish to provide goods and services to the government.
Prospective suppliers interested in pursuing opportunities within the South African government are encouraged to register on the Central Supplier Database.
We hope that we have provided you a brief guide that will get you started. More information may be obtained on the website linked. The most important thins is that you MUST start.
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