Doing Business in South Africa

South Africa is a fascinating country to do business. It is a multicultural country in the truest sense of the term. There are several ethnic groups in South Africa, ranging from the indigenous black people to white Europeans, Indians, Chinese and Malays, who have immigrated to the country over a period of 300 years.

So, naturally, there isn’t a “single” business culture as such in South Africa, but one that is a hotchpotch of several cultures. The sheer diversity of South Africa can be overwhelming if you are new to the country.

But there are certain common threads in the South African business culture. One is the fact that women have never risen to the top executive positions in the country. So if you are a female executive be prepared to be met with a lot of condescending attitude, regardless of the seniority of your position.

This is one major negative you will find while doing business in South Africa, but happily, it’s the only real negative. This is so because since the overthrow of the Apartheid regime and since the legendary Nelson Mandela (affectionately called here as “Madiba”) became the Prime Minister two decades ago, the country has become a highly egalitarian one, which is unusual for an African or a developing country. Anybody can get ahead in South Africa, given the right combination of talent, education and hard work.

Doing business in South Africa is easy as long as you keep in mind the following. South African businessmen don’t require to have a longstanding relationship with you before they decide to form a business partnership with your firm, because South Africans are by nature a highly transactional society that always lives in the present moment, rather than worry too much about the future or live in a regret of the past. This is a country on the move, so you can expect doing business here to be a pleasantly quick experience.

Also, you won’t have any fear of arbitrary changes in laws because South Africa is a very stable country, politically and economically, which is very unusual in Africa. Laws are made after great deliberation in South Africa, and once made, they stay for decades. So this stability and consistency is very heartening for foreign business executives looking to find local business partners in South Africa.

You should be prepared to go the extra length to make relationships here, engage your local South African business partners in a straight forward negotiation. South Africans are very forthright people and they expect the same honesty from you.

While being honest, they are also very polite people who like to avoid confrontations if that’s possible. And you should always go for face-to-face negotiation with a South African business partner rather than just limit all contact to Skype, e-mail or phone conversations.

While greeting people in South Africa, a lot depends on which ethnicity they belong to. White South Africans are likely to be more informal, while South Africans of Indian origins are very conservative with their greetings. Black South Africans are somewhere in the middle.

You should make your appointments long before the actual meeting, but lower level executives in a South African firm can be met at short notice. South Africans don’t like being interrupted while they are speaking, so do avoid this. They always look for solutions that are acceptable to all and work hard at arriving at win-win deals for everyone, rather than just for themselves. But always be realistic in your projections and estimations.

Dressing for a business meeting in South Africa is fun because of how informal the South African society is. There are top executives in South Africa who are known to attend business meetings in T-shirts and jeans. But our advice for you is to play it safe and dress conservatively, because, well, you never know.

This article is a part of our ongoing series on “Doing Business in Africa”. Our goal is to inform people about the right way to form a business partnership with local business partners in the vast African continent, and to offer a better understanding of the business culture and etiquette followed in that part of the world. The intention is to ensure that you are comfortable and know what to expect during a business negotiation with a business partner in Africa. Please send us your suggestions on how we may help to serve you better. Ciao!