Export incentives helping SMEs do business abroad

Updated on 8 September 2014

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Export incentives helping SMEs do business abroad

The Department of Trade and Industry (the dti) every year organises foreign exhibitions and trade shows with the purpose of promoting locally manufactured products in international markets. The most recent missions in the 2014 trade schedule are Germany, Malaysia, China, Mozambique with Japan and Ghana coming up in 2015.
To this end, individuals and South African businesses who produce goods and offer services for foreign markets enjoy government support  through the export incentives scheme, the Export Marketing and Investment Assistance (EMIA).
Through the EMIA , government assists local businesses with the cost incurred when they conduct business outside the country. We look at this incentive in closer detail.

What is Export Marketing and Investment Assistance (EMIA)?

The Export Marketing and Investment Assistance (EMIA) scheme is a government-sponsored grant that assists local companies to increase their competitiveness abroad by supporting patent registrations, quality marks and product marks. It develops export markets for South African products and services, and recruits new foreign direct investment into the country.

How does EMIA work?

There are mandatory conditions with which all entities must abide.  
Firstly, only one representative per business qualifies for support. The representative must be a senior executive and have the authority to conclude the contracts on behalf of the firm.
Secondly, all entities should have traded for more than one financial year. The entity must be a registered legal entity in South Africa in terms of the Companies Act, or the Close Corporations Act, or Cooperatives Act, except in case of a sole proprietor and partnerships.
Thirdly, the applicant must be a taxpayer in good standing and provide a valid tax clearance certificate before EMIA incentive is disbursed. Applications are made two months in advance before the commencement date of the event.

1. Individual Participation Incentive Programmes

There are three sub-categories whereby exporting individuals get assistance. These include an individual exhibition participation programme, an individual inward missions, and also primary market research and foreign direct investment.

  • Individual Exhibition Participation is a grant targeting businesses who need to showcase their products in global exhibitions but don’t have the funding to do so. Incentives include a return economy-class airfare, transportation of samples, rental of exhibition space, construction of stands, interpretation fees, internet connection, telephone installation, subsistence allowance per day, and exhibition fees up to a maximum of R45 000.
  • Primary Market Research and Foreign Direct Investment incentives assists businesses to conduct research studies for their products and also facilitate the process of gaining foreign investment. Exporters are compensated for costs incurred recruiting in new foreign direct investment into South Africa through personal contact by visiting potential investors in foreign countries. There are grants for return economy-class airfare, subsistence allowance per day, transport of samples, and marketing material.
  • Individual Inward Missions  is for entities that organise inward buying investors, or to make contact with them to conclude an exporters order or to attract foreign direct investment. There are grants for registering a patent in a foreign market of which 50% of the additional costs is capped at R100 000 per annum, a return economy class-airfare, subsistence allowance per day, and rental of exhibition space.

EMIA is available only to exporters or export agents for the export of value-added products that enhance the export capability of South Africa”

Group Participation Incentive Programmes

Export grants are also extended to groups of businesses with shared interests. They include group inward buying missions and group inward investment missions, national pavilions, and outward selling mission assistance and outward investment mission assistance.

  • Group inward buying missions and group inward investment missions are usually organised by an industry association, chamber of commerce, export council or a government department. The focus tends to be industry or regional-based and several exporters may jointly participate or benefit from these schemes. There is usually an individual appointed by the organising authority that functions as the mission leader who may or may not actively participate in the actual mission.
  • National pavilions (mini-national) is an official small delegation representing a country’s participation in major trade fairs or exhibitions abroad, which showcases the country, its industries, strengths, comparative advantages and houses exhibiting firms.
  • Outward selling mission assistance and outward investment mission assistance are small manageable groups of three or more registered exporters including the leader of the mission. They are based on market research missions, lobbying or bidding missions and export seminars and conferences.

Who qualifies for EMIA?
EMIA is available only to exporters or export agents for the export of value-added products that enhance the export capability of South Africa. Furthermore, the products to be exported must have a local content of at least 35% to qualify for assistance.
Also qualifying are South African export trading houses and commission agents representing at least three SMMEs or businesses owned by historical disadvantaged individuals. South African export councils, industry associations and joint action groups representing at least five SA entities, also qualify.
No EMIA incentives are available for the period 10 December up to and including 10 January of each year.

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