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Navigating Business Operations in Angola: Key Insights for South African Companies

Doing business in Angola requires understanding various legal, tax, and operational frameworks. This guide outlines methods for establishing a presence, including options for branches and subsidiaries, funding alternatives like equity and loans, and key tax considerations such as withholding tax, exchange control, and Value Added Tax (VAT). We delve into important factors for trading and managing employees in Angola, offering strategic insights for effective management and compliance. Comprehensive research and professional advice are essential for successful operations in this dynamic market.

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Navigating Business Operations in Angola: Key Insights for South African Companies

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Presentation Transcript

  1. Click to edit Master subtitle style Doing business in AngolaSouth African considerations* PwC *connectedthinking

  2. Topics for discussion • Methods of doing business • Limited presence • Branch of SA company • Incorporated subsidiary • Funding alternatives • Equity • Loans • Withholding tax planning • Other considerations • Exchange control • Employees / individuals • Value Added Tax • Custom duties

  3. Methods of doing business Limited presence • Scenarios • Trading with customers / clients in Angola • No formal presence • Temporary employee • Agency contract • Commercial concession contract • SA world-wide basis of taxation • Foreign tax credits • Exchange control

  4. Methods of doing business Branch of SA company • World-wide basis of taxation • Set off of foreign profits against local losses • Head office cost allocation • Transfer pricing • Exchange control • Foreign tax credits • SA sourced income • Angola tax rate 35% • No WHT on profit repatration

  5. Methods of doing business South African subsidiary • SA resident? • Effective management • Register as SA taxpayer • SA tax on world-wide income • Controlled foreign company • >50% of participation rights held by SA residents • Business establishment • Diversionary transactions • Passive income • Intra-group passive income • IT10 form

  6. Methods of doing business South African subsidiary (continued) • Exchange control • Transfer pricing • Profit repatriation • Management fees & interest • Foreign tax credits • Foreign dividends • >25% equity shareholding • 10% withholding tax

  7. Funding alternatives

  8. Payments subject to withholding tax Dividends 10% Interest 15% Royalties (also equipment rental) 10% Management / service fees No double tax treaties Splitting of goods and services (local & foreign) Domestic SA tax credits Source of income Proof of payment Withholding tax planning

  9. Other considerations Exchange control All foreign exchange transactions - Authorised dealers - Timing of cash payments Foreign investment - SARB approval - Investment limits Repatration of foreign dividends

  10. Other considerations Employees / individuals • Residence • Ordinarily resident • Dual resident • Relief for double taxation • Section 6quat • Section 10(1)(o) • CGT exit charge • SA employees’ tax • Temporary absence • Branch of SA company • Subsidiary of SA company

  11. Other considerations Indirect taxes: Value Added Tax • Export of goods • Direct exports • Indirect exports • Services • Rendered in SA • Rendered in Angola • Presence of recipient in SA • Documentation requirements • Branch of SA company • Subsidiary of SA company

  12. Other considerations Custom duties • Export documentation • Export value • Export tariffs • Border crossings • Moving goods in transit

  13. Conclusion Comprehensive research & planning Local & foreign perspective Obtain professional advice

  14. Questions

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