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Legal advice when making business investments

by , 03 November 2016
Legal advice when making business investmentsWhile small businesses will often have a great or innovative product, determination and a desire to succeed, there is commonly a need for start-up companies to seek external help. There are many important areas of business where a company will benefit from outside support and this is particularly true when it comes to legal issues.

There are many areas where a small or emerging company requires legal advice, including:
·         Setting up the structure of a company
·         Understanding the terms of a property lease
·         Seeking investment from external partners
·         Investing in products or other businesses
·         Recruitment and employment policies

It can be difficult for firms to know what regulations are in place or how they apply to them. An example would be the Protection of Investment Act (PIA) that was signed by President Jacob Zuma in 2015. This Act was widely reported in the media, so people and companies will be aware of it, but they may not know how it applies to them and their business.

The Act was introduced to promote and protect investment, creating a more balanced opportunity between foreign and local investors. A company looking to obtain investment in South Africa should now have greater opportunities to receive the backing they require. This has to be seen as a positive measure that will boost individual firms and the overall economy, but there are new legal requirements which firms must be comfortable with.

Regulatory changes provide new opportunities in South Africa

There have been changes relating to foreign investment in South Africa, and this is why it is best to call on the services of a professional. Employing an experienced and skilled professional will ensure that problems can be avoided that could possibly arise because of a less than full understanding of regulations and procedures. There are many fully qualified individuals, such as Henner Diekmann, that are experts at dealing with the latest regulations and how they apply to businesses. This knowledge makes it easier for a firm to look for suitable investment partners while ensuring it is acting within the law.

One area where the support of an experienced solicitor would be advantageous for a company is in determining how best to respond to the 'Promotion and Protection of Investments Bill.' This bill was introduced by the National Assembly of South Africa with the intention of modernising the way South Africa approaches foreign investments.

Important strides forward have been made with respect to welcoming foreign investment into South Africa but businesses have to understand what is required of them. Most start-up or emerging companies don't have the time to familiarise themselves with these regulatory changes, and it is essential that businesses fully understand what is expected of them.

The changing nature of South Africa's approach to foreign investment creates a fantastic opportunity for many firms, but it is an opportunity that has to be approached with great legal care. Any firm that is keen to maximise their opportunity in obtaining investment needs to call on the services of a skilled and experienced professional. It is also fair to say that working with a specialist solicitor will minimise the level of risk associated with any partnership or investment, which is something that all firms will benefit from.


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