Gauteng’s R5m spaza shop fee declared illegal

The Gauteng municipalities’ call for foreign nationals who want to register spaza shops to have a R5 million investment is “unlawful” and “unfair”, says a law specialist.

Immigration lawyer at DSD Immigration Attorneys Stefanie de Saude Darbandi questioned the constitutionality of the proposal.

She said a R5 million investment was specifically for individuals applying for a business visa under the Immigration Act.

R5m investment from those who apply for business visa

This requirement, she said, was to ensure significant foreign investment into the economy.

“If business owners already possess valid visas or permits that authorise them to operate a business, they are not required to meet this investment threshold,” she said.

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“Asylum seekers and refugees with valid permits are exempt. They can operate businesses legally without a business visa. These permits already allow them to work, study, or run a business without meeting the R5 million threshold. Anyone who claims the R5 million applies to all foreign nationals regardless of visa type is incorrect.”

Yesterday, City of Tshwane MMC for economic development Sarah Mabotsa told The Citizen that all foreign nationals would be required to prove that they have the R5 million investment to register spaza shops.

She said the investment requirement applied to all foreign nationals, regardless of visa type.

Applies to all foreign nationals

MEC for economic development in Gauteng, Lebogang Maile last week also said “a foreign national must invest a prescribed amount of R5 million into an existing business or provide a business plan with evidence of R5 million capital contribution.”

Mabotsa and Maile could not be reached yesterday.

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However, De Saude Darbandi argued that the conflation of issues did nothing to protect public health or safety, but undermined the lawful business operations and economic contribution.

“They must either be made to understand the legal framework or acknowledge that their actions are an insincere and an unlawful effort to prevent these foreign business owners from registering.

“Health standards and business registration are about public safety and compliance, not immigration requirements or investment thresholds,” she said.

Spaza health standards and business registration about public safety and compliance

She noted that South African company law allowed foreigners to register and own businesses without business visas.

“A foreigner could own a spaza shop, but have a South African running it. In such cases, they wouldn’t need a business visa or the R5 million investment.”

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Bongani Mkwananzi, from the Africa Diaspora Forum, said the utterances from government leaders created unfair and unlawful barriers to registration.

“There is a clear mix of misinterpreted regulations and laws. Linking the R5 million investment requirement to business registration unfairly and unlawfully prevents otherwise compliant businesses from registering and operating.”

“This appears to be obstacles preventing migrants from registering their businesses and unfairly target those operating businesses legally,” he said.

Mix of misinterpreted regulations and laws

“There is clearly a misinterpretation of the laws and authorities must provide clarity, to avoid deepening social challenges.

“Preventing them from doing so denies them their right to work and undermines their dignity. This was affirmed in a 2014 court judgment. Their right to work, as stipulated in their refugee or asylum status, includes the right to conduct business.”

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