Cross-Border LAWYERS | south africa

The parties to the transaction would negotiate and agree on the law to apply. For example, if an English company was in a transaction with a South African company, they may agree that English law or South African law applies.

The same as for mergers and acquisitions within borders, for example: share purchase agreements, asset purchase agreements, subscription agreements, articles of association (and updates), investment agreements and security agreements.

The starting point is to understand the personal data being processed and the jurisdictions in which it is being processed / transferred. It is best to speak with a Caveat Legal consultant that is experienced in the cross-border transfer of personal data and international data privacy laws. We can then advise you and draft the relevant documents.

The first step is to speak with a Caveat Legal consultant that is experienced in cross-border transactions. We can then advise you on the requirements and considerations, and draft the relevant documents.

A foreign buyer acquiring a South African company generally follows the same core M&A process as a domestic buyer  –  due diligence, negotiating and signing a sale agreement, and closing  –  with additional layers specific to cross-border deals: exchange control approval for the inbound investment, competition clearance where thresholds are met, compliance with any sector-specific foreign ownership restrictions, and coordination between South African and foreign legal, tax, and regulatory advisers. Getting the exchange control and cross-border structuring right early is often what determines how smoothly the rest of the deal proceeds.

Which law governs an international commercial contract is primarily determined by what the parties agree in the contract’s choice of law clause  –  South African courts generally respect a validly agreed choice of law, provided it isn’t being used to circumvent a mandatory local law that would otherwise apply. Where a contract is silent on the point, the applicable law is determined by conflict of laws principles, generally looking to the law of the country with the closest and most real connection to the transaction. Given how much turns on this, a clear, deliberately chosen governing law and jurisdiction clause is one of the highest-value few paragraphs in any cross-border contract  –  leaving it to a default rule is rarely the better outcome for either party.

Yes, in principle, but not automatically. South Africa recognises and enforces certain foreign judgments through statute (for judgments from specific reciprocating countries) or, more commonly for judgments from non-reciprocating jurisdictions, through the common law process of registering and enforcing the judgment as a cause of action in South African courts  –  which generally requires showing the foreign court had proper jurisdiction, the judgment is final, and enforcement wouldn’t be contrary to South African public policy. This process takes time and isn’t guaranteed, which is another reason a well-drafted arbitration clause (with awards enforceable under the New York Convention, which South Africa is party to) is often a more reliable route to a genuinely enforceable outcome in cross-border contracts than relying on foreign court litigation.

Establishing a South African subsidiary typically involves incorporating a new company (or registering an external company as a branch, depending on the structure chosen), registering with SARS for tax and, where relevant, VAT, opening a local bank account, registering as an employer with UIF and COIDA once local staff are hired, and putting in place the local governance, statutory records, and compliance frameworks the entity needs from day one  –  including localising any relevant global group policies. Getting the structuring decision right at the outset (subsidiary versus branch, for example) has downstream tax, liability, and governance consequences that are far more costly to unwind later than to get right initially.

South African exchange control rules, administered by the South African Reserve Bank, generally regulate the movement of capital into and out of South Africa  –  inbound investment is largely unrestricted and can generally be freely repatriated (dividends, capital, and profits) provided the initial inflow was properly reported through the banking system. Outbound investment by South African residents (individuals and companies) is more tightly regulated, subject to defined allowances and, above certain thresholds, requiring specific SARB approval. Because the rules differ significantly depending on the direction of the transaction, the parties involved, and the structure used, this is an area where getting early, specific advice avoids a deal being delayed or blocked at the banking stage.

Caveat Legal’s cross-border lawyers include practitioners admitted in South Africa, England & Wales and New York, with experience advising on cross-border M&A, commercial contracts, project finance, data protection, IP, competition and trade matters across sub-Saharan Africa and internationally.’