CITIES DRIVING TRADE

Johannesburg: a thriving, entrepreneurial city

Yugen Pillay Yugen Pillay

An industrial and economic hub of sub-Saharan Africa, Johannesburg proves a valuable access point for businesses looking to take advantage of new opportunities in South Africa and beyond.

“There are a number of growing business hubs in Africa, but if you are serious about doing business in the continent, Johannesburg has to be on your radar,” explains Yugen Pillay, head of business consulting.

“It’s not only a gateway into this country but also the rest of the continent: companies come here to access African markets because so many major international businesses are headquartered here already.” Which means “Johannesburg might be where you need to come to sign the material deals,” Pillay explains.

“Meanwhile, the Johannesburg airport, OR Tambo, is the busiest in South Africa.” It handles around 400,000 tonnes of airfreight a year – roughly 90% of South Africa’s total – and handles over half of the passengers flying into the country.

Financial services to the fore

“The infrastructure to support business here is also excellent,” says Pillay. The Sandton part of the city is the richest square mile in Africa and a number of global banks, from Bank of China to JP Morgan Chase and HSBC, are based there.

“Johannesburg boasts a very advanced financial services sector: if you want to get a venture off the ground, this is where the funding usually is,” he adds.

Technology is also a key growth sector for the city, with multinationals such as Cisco, IBM and Orange having regional offices in Johannesburg. “There is also excellent support for tech startups, and the government is currently exploring incentivising investment to bring data costs lower,” explains Pillay, with interest and innovation in sub-sectors like fintech and the Internet of Things.

“Both Cape Town and Johannesburg are major hubs for the technology industry, and South Africa has produced many well-known tech entrepreneurs.”

Johannesburg also scores well in terms of the ease of setting up a company and doing business generally, Pillay says: “The tax regime for small businesses is fair and it is possible to register a new company, open a bank account and be ready to start trading within a week.”

Entrepreneurial spirit

Johannesburg’s history as the centre of the southern African gold rush in the late 19th century has imbued the city with an entrepreneurial spirit. “And South Africa has forward-looking trade policies as well as trade agreements with a number of countries around the world,” says Pillay.

More recently, he says, the election of a very business-focused president  – Cyril Ramaphosa – has provided initiatives intended to significantly economic boost and made South Africa much more attractive for international investors as per his investment conference 2018 and 2019 which raised over R650 Billion in investment and commitments by Corporates.

“A good example of this pro-business culture is the fact we have created the King IV corporate governance code, being adopted by an increasing number of boards,” Pillay explains. “Recently, we have seen a significant year-on-year increase in the number of Fortune 500 companies setting up in Johannesburg.”

Special Economic Zone

The provincial government in Gauteng province is also currently investing billions of Rands into developing the Ekurhuleni Aerotropolis, just to the east of Johannesburg.

As part of this programme, an automotive economic zone was launched in November 2019 with the aim of promoting manufacturing and exports in the sector. Known as the Tshwane Special Economic Zone, this is due to be completed by the end of 2020.

Larger Businesses considering investing in Johannesburg should contact the Department of Trade and Industry or small to medium business should contact the Department of Small Business for guidance and advice.

Gateway to Africa

“Johannesburg is the industrial and economic heartbeat of southern Africa and perhaps even of the whole continent,” Pillay explains. “Everything you need to operate is here – the infrastructure, the finance, the people and the tax regime. We have a saying: if you can’t do business here, you can’t do it anywhere.”

Specialist advice

Johannesburg’s entrepreneurial spirit and pro-business climate make it the ideal gateway for companies looking to expand into South Africa as well as the wider region.

To find out more about establishing your business here, contact Yugen Pillay.

Johannesburg quick facts

  • Location: Gauteng province, South Africa
  • Time zone: South Africa Standard Time GMT +0200
  • Population: 5.6 million
  • GDP: US$48.3 billion (2018)
  • Industrial strengths: Financial services, technology, mining
  • Growth sectors: Renewable energy, fintech, Internet of Things, tourism
  • Regional access: Pretoria 35 minutes by train; Cape Town 2 hours by air; Nairobi 4 hours; Lagos 6 hours

 

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