Pilot framework aims to ease cross-border capital flows while retaining jobs and IP locally.
A new regulatory initiative designed to unlock international investment for South African startups was unveiled at the SA Venture Capital and Private Equity Association’s (Savca) Venture Capital Conference.
The framework introduces a regulatory sandbox to help qualifying startups raise offshore capital while keeping operations and intellectual property (IP) in South Africa.
“The sandbox is designed to give startups a faster, legally compliant pathway to structure offshore IP while retaining jobs and headquarters locally,” said Safeera Mayet, Savca’s head of policy and regulatory affairs. The initiative is expected to address long-standing bottlenecks, including exchange control restrictions and slow deal-making timelines.
Breaking down barriers
Speakers at the panel emphasised the limitations of legacy policies on global scaling. Pieter de Villiers, CEO of Clickatell, said that without reform, South African startups remain constrained.
“With a rand-denominated investment, you can’t hire internationally or access certain markets. To achieve meaningful exits, exchange control and outdated rules must be addressed.”
The sandbox, developed after nearly a decade of consultation between the South African Reserve Bank (Sarb), South African Revenue Service (Sars), and industry groups such as the SA Startup Act Movement, Safta, and Endeavour South Africa, will allow eligible startups, particularly in tech, to test compliant cross-border structures for raising capital.
A framework supporting both founders and the fiscus
Legal experts highlighted that the sandbox benefits both entrepreneurs and the government. Adrian Dommisse, founder of Dommisse Attorneys, said the framework allows founders to scale internationally without relocating IP. He noted that Sars could benefit from the structure since local operations and jobs are maintained.
De Villiers described it as a “win-win,” adding that prompt legislative action is required to avoid deal delays and opportunity costs.
Standardising deals to boost investment velocity
Panellists also called for standardised early-stage deal documentation, term sheets, and ESG reporting to accelerate investment flows.
Dommisse highlighted that simplified, open-source templates - already used in the US and UK - could reduce legal complexity and costs for South African VC deals.
Mayet confirmed that Savca and local legal experts are developing a domestic open-source VC documentation suite. “Standardisation can make deal-making faster, cheaper, and more transparent, ultimately attracting more investors,” she said.
Laying the groundwork for long-term growth
Speakers agreed that efficient regulatory frameworks are critical to developing South Africa’s venture capital ecosystem. The sandbox will pilot the framework with a small group of qualifying startups, potentially informing permanent legislative changes.
“This initiative enables South African entrepreneurs to compete globally while keeping their operations and IP at home,” Mayet concluded.
