Incentives

Cash incentives for new firms

The government's Small and Medium Enterprise Development Programme (SMEDP) offers cash incentive for new industries as well as the expansion of existing industries.

People planning new business projects or the expansion of existing projects in manufacturing, tourism, certain business services, information and communication technology investments, high-value agricultural projects, agroprocessing, recycling, bio-technology industries, aqua-culture and cultural industries may apply for assistance.

The SMEDP replaces the former SMMDP (Small Medium Manufacturing Development Programme).

SMEDP is an excellent investment incentive:

  • Initial quarterly payments contribute towards positive cash flow
  • Tax-free
  • Easy-to-understand application and claim procedures
  • User-friendly procedures.

The SMEDP incentive package aims to:

  • Create wealth
  • Generate employment
  • Develop entrepreneurship
  • Promote empowerment
  • Utilise local raw material
  • Ensure sustainability of projects receiving incentives in the long run
  • Reduce investment lost for small and medium investors
  • Encourage greater investment in training
  • Improve industrial training systems
  • Create opportunities for the introduction of new and advanced skills in South Africa
  • Promote foreign investment
SMEDP programmes

Establishment Grant
Assistance in the form of a tax-free establishment grant for the first two years, calculated on qualifying investment per year as follows:

  • First R5-million investment - 10% per annum
  • Next R10-million investment - 6% per annum
  • Next R15-million investment - 4% per annum
  • Next R20-million investment - 3% per annum
  • Next R25-million investment - 2% per annum
  • Next R25-million investment - 1% per annum
Note: The establishment grant can be awarded for an additional year (ie, a third year) if the labour remuneration to the value-added ratio is 30% or bigger.

Skills Support Programme (SSP)
A three-year cash grant to the value of 50% of the cost of training new staff (through an approved training programme) resulting from a new or expansion project:

  • Grant capped at 30% of annual wage bill
  • Grant paid on a performance basis
  • Capital grant for training equipment and course materials
For further information on SMEDP, please contact:

The Enterprise Organisation (TEO)
The Department of Trade and Industry
Private Bag X86, PRETORIA, 0001, RSA
E-mail
Website

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