Below is How To Open A Security Company In South Africa
In order to start a security company, you will need to register with the Private Security Regulatory Authority (PSIRA). This is one of the governing bodies of private security companies in South Africa. You will have to pay a registration fee and complete an exam to determine your competence level.
Security Companies In South Africa
We know there’s a lot of paperwork that needs to be done and we also know it can be overwhelming to figure out what’s first and how to get everything. To make it less overwhelming, we’ve split the article into two sections.
The first section is about all the general documentation every South African company needs to be compliant with SARS and to legally employ staff. The second section is about the documentation you need specifically as a security company and also a security company that wants to apply to tenders, RFQs, and contracts.
If the list of documents below still overwhelms you, or if you need an expert to walk you through the process of getting registered for all the vital paperwork, you can always contact a consultant at Pty Company Registration. Pty Company Registration is a fast-tracked compliance company that specializes in assisting security companies with their paperwork needs.
Please note that we’ve tried our best to list all the vital pieces of documentation below in both sections, however, what you need may differ depending on your specific security business and its needs. So, it’s important to check with a professional or a professional institution that you have everything you need for your specific business goals.
The Documents You Need To Register And Start A Security Company In South Africa
Section 1: General Documentation every South African business needs
Here are the specific documents that every South African company needs if they want to employ staff and comply with SARS’s basic requirements.
1. Company Registration
What you need: Company Registration at the CIPC.
Why you need it: If your business isn’t registered at the CIPC yet, that does not invalidate your business. If you’re not registered, you’ve automatically considered a sole proprietor business in the eyes of South African law.
There are different kinds of companies you can register your business as, however registering as a Pty is the most common structure in South Africa.
The reason you should register your business at the CIPC is related to your personal finances and also your ability to apply to contracts, tenders, or RFQs.
Firstly, a contract application often requires a company registration number – the number you get upon PTY registration at the CIPC. Secondly, in terms of your finances, registering your business offers some extra protection, because it separates your personal finances and your business’s finances.
How you can get it: There are two ways to get a business registered at the CIPC. You can either apply directly via the eServices Portal. Or if you’d like to save time and effort you can ask a professional like an accountant or a fast-tracked Company Service provider like Pty Company Registration to assist you
2. Employer Tax Registration
What you need: Employer Registration at SARS and the UIF Office.
Why you need it: If you employ, or want to employ, one or more people for more than 24 hours a week, it’s compulsory to register as an employer at SARS.
It’s important to know that your Employer Registration also goes hand-in-hand with UIF and SDL payments.
What is SDL and UIF and how is it relevant to Employer Tax Registration
UIF refers to the South African Unemployment Insurance Fund and SDL refers to Skills Levy Development. While most employers need to cover UIF for every employee they have (don’t worry it’s a really small amount), SDL usually only applies to very large companies that estimate paying R500 000 or more in salaries in the next 12 months.
These small amounts are calculated as a percentage of your employees’ salaries that you, as the employer, need to contribute to your employees.
UIF will help support your employees in the case of unexpected unemployment and the SLD will help your employees get further skill development – so the latter is also an investment in your company in the long term.
How you can get it: First, you have to register at SARS as an employer (you can find out more in the link below). You can also register for SDL – if you qualify – at SARS. However, you’ll have to register at the UIF office UIF. The alternative is opting for fast-tracked services for all three services: Employer Tax Registration, UIF, and SDL
Section 2: Documentation South African security companies need
Here is a list of the documentation you need specifically as a Security Company – but also if you’re interested in applying to tenders, contracts, and RFQs.
1. Letter of Good Standing
What you need: A Letter of Good Standing – this means you first need to register with COID (The Workman’s Compensation Fund) at South Africa’s Labour Department and ensure all your payments are up to date.
Why you need it: If you want to apply for tenders, RFQs, and contracts, you’ll most likely need a Letter of Good Standing. However as a Letter of Good Standing is proof that you’re up-to-date on your payments to the Workman’s Compensation Fund, that implies that you first need to register with the Workman’s Compensation Fund.
The Workman’s Compensation Fund is a Fund that supports both employers and their employees (casual and full-time), by creating a fund that offers financial support in the case of work-related harm or injuries. Employers pay a small amount – determined as a percentage of their employees’ salaries – to the fund, in turn, the fund helps pay for medical bills or remuneration if an employee is harmed or injured at work. This remuneration refers both to an employee not being able to work, due to a work injury, or remuneration to a family a financial provider passes away due to a work-related injury.
You need to register with Workman’s Compensation because companies want to make sure your employees are covered when they subcontract you for work. If your payments aren’t up-to-date your employees aren’t covered. That’s why you need the Letter of Good Standing – it’s proof that your employees are covered by the fund.
How you can get it: The first step is COID Registration at South Africa’s Labour Department. After you’ve registered for COID, SARS will inform you how much you need to pay to cover all your employees. Only after you’ve made this payment, you are eligible for a Letter of Good Standing (SARS can issue you the Letter of Good Standing). The other option is using a fast-tracked service provider (link below)
2. PSIRA
What you need: PSIRA Registration of your business and specific Security Grading for your staff, your Members, Directors, Partners, Trustees, or Managers.
Why you need it: PSIRA is the Private Security Industry Regulatory Authority and this regulatory organization makes sure security service providers are in line with the South African law on security companies. PSIRA ensures that everyone involved in the security industry also offers lawful, safe, and quality security services.
Everyone involved in your business needs to have PSIRA approved training and specific Security Grading. Your business also needs to be registered with PSIRA, because the South African Security Industry Regulation Act 56 of 2001 requires it. This means you will have to undergo PSIRA examination and investigative processes.
The goal of the authority is to safeguard the industry against fly-by-night companies that have practices that are unethical, unsafe, or subpar – especially because security can be a high-risk industry.
How you can get it: There’s a whole list of documentation you need to register your company as a security company at PSIRA. You can either do it yourself (listed below) or opt for fast-tracked company registration services.
Here is the documentation you’ll need if you’d like to go through the process yourself:
B Security Grading for your staff, your Members, Directors, Partners, Trustees, or Managers (there’s an A, B, C, and D security grade) as security providers. You can read more about the requirements of a security officer
A Registered Business at the CIPC
A SARS Tax Clearance Certificate, VAT Registration Number, PAYE Number
UIF and COID Registration if applicable
A 1-year business plan
A declaration that your business will be able to operate for the next year
A fixed, immovable office location
3. Other Security Associations in South Africa (like SASA)
What you need: Membership to your selected associations (like SASA, SASSETA, SANSEA, SANSEA or ESDA).
Why you need it: There are various security organizations you can join that will help you stay up-to-date on industry standards, products, and developments in the security industry. It’s not compulsory to join; however, it increases the credibility of your business when you do. Here are a few that might be helpful:
SASA – Security Association of South Africa
SASSETA – Safety & Security Sector Education & Training Authority
SANSEA – South African National Security Employers Association
SAIDSA – South African Intruder Detection Services Association (specifically for alarm monitoring and armed response services)
ESDA – Electronic Security Distributors Association (This specifically for electronic security equipment)
How you can get it: You can either contact a fast-tracked company service provider to consult on which to join or contact the association by yourself.
Helpful links: posted above.
4. B-BBEE Affidavit or Certificate
What you need: You need a B-BEE Affidavit if your business’s turnover is less than R10 million a year and you need a B-BEE Certificate if it’s R10 million or more a year.
Why you need it: Both these documents establish the measure of Black Economic Empowerment your company has in terms of its ownership. The measurement process is quite simple when you have a turnover of less than R10 million a year. If your sales are more than that a year, the process is more complex.
How you can get it: Where you get it depends on what you need. If you need a B-BEEE Affidavit you can download a free form below, fill it out yourself and have it signed by a Commissioner of Oath. However, if you need a B-BBEE Certificate you need to register at the CIPC
5. VAT Registration
What you need: VAT Registration.
Why you need it: VAT isn’t compulsory, unless your annual turnover is more than R1 million in the past 12 months. However, you can still register for it voluntarily; VAT Registration can help you when you want to work with larger VAT-registered companies.
How you can get it: You can either register for VAT at SARS or use fast-tracked services like Pty Company Registration.
How much does it cost to register a security company SA?
To start a security service company in South Africa you must register with the Private Security Regulatory Authority (PSIRA). This includes paying a registration fee of R2 280 and writing an exam.