6 Steps to Starting a Construction Company in SA
If you want your construction company to be eligible for public contracts and tenders, you’ll first need to follow a few formalities to ensure you’re tax compliant, operating legally and protecting your employees. This can be overwhelming if you’re new to the space, so we’ve broken down the 6 steps you need to follow below.
Step 1: CIPC Company Registration
Firstly you need to make your company official by registering it at the CIPC, to obtain your company registration number and documents, which will be used to complete all of your compliance registrations.
Step 2: Tax Clearance Certificate
After registering your company at the CIPC, you must now finalise your registration at SARS, to activate your income tax number and obtain your tax clearance certificate.
Step 3: B-BBEE Documents
Set up your B-BBEE documentation. If your company earns below R10 million per year, it’s seen as an EME company and would only require a B-BBEE affidavit, which acts exactly the same as a B-BBEE certificate.
Step 4: CIDB
Registering with the CIDB (Construction Industry Development Board) is compulsory if you plan on working in the public sector or applying for tenders. When you register your company at the CIDB, you indicate what type of construction your company specialises in. Once registered you will be notified via the CIDB of any construction tenders available in your area.
Step 5: Letter of Good Standing
A Letter of Good Standing serves as proof that your company is registered with the Workman’s Compensation Fund and that all your payments are up to date. Before you can get a Letter of Good Standing you’ll need to register with the Department of Labour for COIDA (Compensation for the Occupational Injuries and Diseases Act). When you first register with COIDA you will receive a Letter of Good Standing for free, but it needs to be renewed between the 28th of February and the 30th of April every year. When you register with COIDA you will also need to pay an NOA (Notice of Assessment) directly to the Department of Labour. This fee is based on the total salaries paid by the company and the risks the employees of the company might face when performing their duties.
Step 6: NHBRC Registration
Registration with the NHBRC (National Home Builders Registration Council) must be completed in order to indicate your company follows all of the required rules and guidelines to safely perform maintenance to structures or to build new ones.
Bonus step: Register with the CSD
Now that you’re officially registered, you can also register on the CSD (Central Supplier Database). The CSD is the official database of all organisations, institutions and individuals who wish to provide goods and services to the government, and once registered you will be notified of any available tenders.
If you’ve completed all the above steps, congratulations! You now own a fully compliant construction company and you can now begin to apply for public contracts and tenders 🔨.