A new regulatory framework that could significantly improve how South African start-ups attract global investors and scale internationally – without breaching tax or regulatory rules – is on the cards following nearly a decade of discussions.
The regulatory sandbox was discussed at a recent Southern Africa Venture Capital and Private Equity Association (Savca) conference.
Safeera Mayet, Savca head of policy and regulatory affairs, said in a statement on Thursday that the sandbox is designed to give qualifying start-ups a faster, legally sound pathway to structure offshore intellectual property (IP) while retaining their operational base and jobs in South Africa.
It follows collaboration between the South African Reserve Bank, the South African Revenue Service and industry bodies. The sandbox tackles longstanding barriers such as exchange control restrictions and slow, complex deal-making processes that have historically pushed founders to move their IP abroad to raise funding.
It has been hailed as a major turning point for VC, particularly for start-ups in the tech sector.
“The sandbox is tremendously exciting in principle. It allows South African entrepreneurs to remain headquartered locally while operating legally across borders,” said Adrian Dommisse, founder and director of Dommisse Attorneys.
For years, start-up founders have been forced to close shop locally and move their IP overseas due to a lack of access to funding. This allows them to grow and expand globally without leaving the country.
Win-win
Dommisse said that a critical step in getting the sandbox approved was demonstrating that the fiscus would not lose revenue through offshore structuring.
Chat commerce platform Clickatell CEO Pieter de Villiers told the conference that the solution represents a win-win for everyone. Now what is needed is the collective will to finalise these frameworks, he said.
Read: R300-million seed fund launched for tech start-ups in South Africa
De Villiers warned that without meaningful reform, South Africa will remain trapped by legacy policies that prevent founders from scaling globally.
“With a rand-denominated investment, you can’t even hire a sales leader in the US – we’re locked out of these markets completely. If we want real exits and international investment, we must fix exchange control and other outdated rules.”
Industry bodies have also called for the standardisation of early-stage deal documents, term sheets and environmental, social and governance reporting to accelerate investment flows. They warn that overcomplicating legal documents in South Africa needlessly delays dealmaking.
Savca and legal experts are working together to develop an open-source VC documentation suite for South Africa, similar to the UK and US where open-source standard templates are used to reduce legal complexity and cost.
Read: Llew Claasen on how exchange controls are harming SA tech start-ups
The association said a pilot will test the sandbox framework with a small group of qualifying start-ups before a broader roll-out. Its outcomes could influence long-term legislative reform. – © 2025 NewsCentral Media
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