Can foreigners buy property in South Africa?

A non-resident asked me if he could buy property in South Africa. 

Favourable exchange rates and a world-renowned deeds registration system have encouraged foreigners to snap up properties here. 

A "foreigner" means an individual who is not a citizen of South Africa. The right to own property in South Africa does not extend to an illegal foreigner in the Republic in contravention of the Immigration Act.  Land may be made available to a foreigner who is the holder of a permanent residence permit subject to the conditions of such licence and a refugee with a permanent residence permit after five years of continuous residence in the Republic. 

Letting or selling any immovable property in the Republic to an illegal foreigner is illegal. 

Foreigners may acquire immovable property (including agricultural land) in their names or jointly in undivided shares or via entities such as companies, trusts, or similar entities registered outside South Africa. 

These formalities apply:

 

·         Foreign legal entities which buy property in the country must be registered here and appoint a South African resident public officer on behalf of the local company whose shareholders are non-residents.

 

·         There is a 'non-resident' endorsement on the property's title deed. If the owner sells, they may repatriate all funds introduced from outside South Africa to acquire fixed property in the country and any profit from the sale.

 

·         Non-residents must pay capital gains tax (CGT) on the disposal of immovable property in South Africa, including any right or interest in immovable property. If they want to repatriate funds, they must register as taxpayers and submit income tax returns reflecting the capital gain calculation.

 

·         Suppose the South African Reserve Bank approves foreign loans to fund a land purchase via a corporate entity. In that case, the entity may repatriate the funds and any profits, subject to payment of CGT.

 

·         Loans by a South African bank to non-residents are subject to foreign exchange approval from the Reserve Bank. The bank secures its loan by a mortgage bond registered in its favour.  Banks will only lend non-residents up to 50% of the purchase price of a property.

 

·         Non-residents who have brought funds into South Africa over several years may borrow up to 100% of the total funds invested in the country. This may amount to more than 50% of the purchase price of the property.

 

Employing foreign nationals in South Africa

 In the recent Mukuru decision of Mukuru Financial Services (Pty) Ltd and Another v Department of Employment and Labour, the Court had to consider the facts supporting the contention that Makuru had no option but to employ foreign nationals rather than South African citizens or permanent residents. Did this constitute unfair discrimination?

Mukuru is a financial services provider that uses mobile technology to transfer money across Africa and Asian countries. They applied for a corporate visa to permit them to employ foreign nationals. To qualify, they had to do demonstrate to the Department of Employment and Labour (DEL) that despite conducting a diligent search to find suitable employees that were either South African citizens or permanent residency holders, it was not able to do so. The DEL refused to issue the necessary certificate as they were not satisfied with Mukuru’s attempts to employ South Africans.

Mukuru applied to court to review the DEL decision. The High Court was not persuaded by Mukuru’s explanation why it could not employ South Africans and found that South Africans were unfairly excluded from employment opportunities which constituted unfair discrimination on various constitutional grounds.

It is thus clear that South African employers must justify the employment of foreign nationals over South Africans. Whether an employer can do so, will depend on the facts of each case.

Muslim marriages recognised

This is a judgment of the Constitutional Court, declaring invalid certain provisions of the Marriage and Divorce Acts, and recognising Muslim marriages.

On application for confirmation of an order of constitutional invalidity granted by the Supreme Court of Appeal:

 1.      The Supreme Court of Appeal’s order of constitutional invalidity is confirmed:

 1.1.   The Marriage Act 25 of 1961 (Marriage Act) and the Divorce Act 70 of 1979 (Divorce Act) are declared to be inconsistent with sections 9, 10, 28 and 34 of the Constitution in that they fail to recognize marriages solemnized in accordance with Sharia law (Muslim marriages) which have not been registered as civil marriages, as valid marriages for all purposes in South Africa, and to regulate the consequences of such recognition.

 1.2.   It is declared that section 6 of the Divorce Act is inconsistent with sections 9, 10, 28(2) and 34 of the Constitution, insofar as it fails to provide for mechanisms to safeguard the welfare of minor or dependent children born of Muslim marriages, at the time of dissolution of the Muslim marriage in the same or similar manner as it provides for mechanisms to safeguard the welfare of minor or dependent children born of other marriages that are dissolved.

 1.3.   It is declared that section 7(3) of the Divorce Act is inconsistent with sections 9, 10, and 34 of the Constitution, insofar as it fails to provide for the redistribution of assets, on the dissolution of a Muslim marriage, when such redistribution would be just.

 1.4.   It is declared that section 9(1) of the Divorce Act is inconsistent with sections 9, 10 and 34 of the Constitution, insofar as it fails to make provision for the forfeiture of the patrimonial benefits of a Muslim marriage at the time of its dissolution in the same or similar terms as it does in respect of other marriages that are dissolved.

 1.5.   The common law definition of marriage is declared to be inconsistent with the Constitution and invalid to the extent that it excludes Muslim marriages.

 1.6.   The declarations of invalidity in paragraphs 1.1 to 1.5 above are suspended for a period of 24 months to enable the President and Cabinet, together with Parliament, to remedy the foregoing defects by either amending existing legislation, or initiating and passing new legislation within 24 months, in order to ensure the recognition of Muslim marriages as valid marriages for all purposes in South Africa and to regulate the consequences arising from such recognition.

 1.7.   Pending the coming into force of legislation or amendments to existing legislation referred to in paragraph 1.6, it is declared that Muslim marriages subsisting at 15 December 2014, being the date when this action was instituted in the High Court, or which had been terminated in terms of Sharia law as at 15 December 2014, but in respect of which legal proceedings have been instituted and which proceedings have not been finally determined as at the date of this order, may be dissolved in accordance with the Divorce Act as follows:

 (a)     all the provisions of the Divorce Act shall be applicable, save that all Muslim marriages shall be treated as if they are out of community of property, except where there are agreements to the contrary, and

 (b)     the provisions of section 7(3) of Divorce Act shall apply to such a union regardless of when it was concluded.

 (c)     In the case of a husband who is a spouse in more than one Muslim marriage, the court:

 (i)        shall take into consideration all relevant factors, including any contract or agreement between the relevant spouses, and must make any equitable order that it deems just; and

 (ii)       may order that any person who in the court’s opinion has a sufficient interest in the matter be joined in the proceedings.

 1.8.   Pending the coming into force of legislation or amendments to existing legislation referred to in paragraph 1.6, it is declared that, from the date of this order, section 12(2) of the Children’s Act 38 of 2005 applies to a prospective spouse in a Muslim marriage concluded after the date of this order.

 1.9.   Pending the coming into force of legislation or amendments to existing legislation referred to in paragraph 1.6, for the purpose of paragraph 1.8 above, the provisions of sections 3(1)(a), 3(3)(a) and 3(3)(b), 3(4)(a) and 3(4)(b), and 3(5) of the Recognition of Customary Marriages Act 120 of 1998 shall apply, mutatis mutandis, to Muslim marriages.

 1.10. If administrative or practical problems arise in the implementation of this order, any interested person may approach this Court for a variation of this order.

 1.11.The Department of Home Affairs and the Department of Justice and Constitutional Development shall publish a summary of the orders in paragraphs 1.1 to 1.10 above widely in newspapers and on radio stations, whichever is feasible, without delay.

 2.      The conditional cross appeal by the Women’s Legal Centre Trust, and the appeals by the South African Human Rights Commission and Commission for Gender Equality are dismissed.

 3.      The President and the Minister of Justice and Constitutional Development must pay the Women’s Legal Centre Trust’s costs of this application, including the costs of two counsel.

My employer has refused to accept my sick note and is withholding my pay

 

 

An employer refuses to accept a sick note/medical certificate from an employee signed off by a clinic sister and withholds the employee's pay. What can the employee do? 

Section 22(5) of the Basic Conditions of Employment Act (BCEA) provides for sick leave and, more specifically, paid sick leave. However, what happens when your employer requests proof of incapacity (sick note/medical certificate)? 

Section 23(1) of the BCEA provides that an employer is not obliged to pay an employee if an employee has been absent/sick from work for more than two (2) consecutive days or more than two (2) occasions during eight weeks. On request by the employer, the employee fails to produce a sick note/medical certificate recording that the said employee was unable to perform work for the duration of the employee's absence on account of sickness or injury. 

Section 23(2) of the BCEA records that the sick note/medical certificate must be issued and signed by a medical practitioner, or any other person certified to diagnose and treat patients and registered with a professional council established by an Act of Parliament. 

A registered professional council established by an Act of Parliament refers to the Health Professions Council of South Africa (HPSCA). It is a requirement for all healthcare practitioners in South Africa to register with the HPSCA to practice in South Africa lawfully. 

In this regard, a clinic sister, nurse, traditional healer and the like cannot issue and sign a sick note/medical certificate as such persons are not qualified to examine and diagnose patients. The employer can therefore reject such a sick note/medical certificate, and the employer can treat the period of the employee's absence as unpaid leave. 

An employer must accept a valid sick note/medical certificate issued and signed by a registered healthcare practitioner. If they withhold the employee's pay due to the employee being unable to attend work (on account of the employee's illness/injury in line with a valid sick note/medical certificate), this would be an unfair labour practice. The employee can take the necessary action against the employer. 

Moreover, suppose the employer can prove that the said employee is, in fact, not sick. In that case, even though the employee has a valid sick note/medical certificate, the employer can proceed with disciplinary actions against the employee. 

It is vital to ensure that when you obtain a sick note/medical certificate, it must be issued and signed off by a healthcare practitioner who is registered with a professional council, failing which your employer has the right to reject the sick note/medical certificate.

 

Applying for a business visa

In terms of section 15 of the Immigration Act,

(1) Subject to subsection (1A), a business visa may be issued by the Director-General to a foreigner intending to establish or invest in, or who has established or invested in, a business in the Republic in which he or she may be employed, and an appropriate visa for the duration of the business visa to the members of such foreigner’s immediate family provided that-

(a) such foreigner invests the prescribed financial or capital contribution in such business;

(b) the contribution referred to in paragraph (2) forms part of the intended book value of such business; and

(c) such foreigner has undertaken to –

(i) comply with any relevant registration requirement set out in any law administered by the South African Revenue Service; and

(ii) employ the prescribed percentage or number of citizens or permanent residents within a period of 12 months from the date of issue of the visa.

(1A)  No business visa may be issued or renewed in respect of any business undertaking which is listed as undesirable by the Minister from time to time in the Gazette, after consultation with the Minister responsible for trade and industry.

(2) The holder of a business visa may not conduct work other than work related to the business in respect of which the visa has been issued.

(3) The Director-General may reduce or waive the financial or capital contribution referred to in subsection (1)(a) for businesses which are prescribed to the in the national interest, or when so requested by the Department of Trade and Industry.

(4) The holder of a business visa shall submit proof to the satisfaction of the Director-General that he or she has fulfilled the requirements contemplated in subsection (1)(a) within 24 months of the issuance of the visa, and within every two years thereafter.

(5) A business visa may be issued to a foreigner for more than one entry if multiple entries into the Republic by that foreigner over a period of time are necessary for that foreigner to conduct the business in question effectively.

See the prescribed financial or capital contribution (R5 million) as well as details in respect of section 15(3).