Inbound Expatriate Employees Coming to Work in South ...

The Expatriate Administrator

A publication from KPMG's International Executive Services practice

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Inbound Expatriate Employees Coming to Work in South Africa? What You Need to Know Before They Go

By Moeketsi Seboko and Munhle Manzini, KPMG, South Africa (a KPMG International member firm)

Navigating the ever-changing waters of visa types, work permit procedures, documentation requirements, responsible competent authorities and administrative bodies, application fees and submission requirements, etc. has been a considerable challenge for many global mobility programs with employees crossing borders. In the years following the terrorist attacks on the United States in September 2001, we saw governments around the world revise their immigration policies and systems to close gaps and loopholes and more effectively filter and track migrants crossing their countries' borders. This worldwide undertaking was largely security driven. In recent years, many countries have been once again taking a critical look at

their immigration rules and systems. However, this time, it is with a view to better controlling the flow of people crossing their borders, safeguarding local employment, and better matching foreign employees' skill sets with the needs of domestic businesses. This is economically ? and to some extent politically ? driven.

The focus of this article is South Africa and the recently published immigration regulations1. The initial motivation behind the changes to South Africa's immigration rules was believed to be economic ? to attract more people with desireable skill sets and help make South Africa's economy more investorfriendly and competitive. However,

the changes announced have given rise to some controversy and critical media scrutiny. Press reports2 and public outcry have followed the publication of the Regulations, with suggestions that the Regulations are discouraging investors and creating an unfavorable environment for the attraction of foreign skills. There have been calls for the Regulations to be reviewed and debated by Parliament's Home Affairs portfolio committee. In response, the recently appointed Minister of Home Affairs has asserted that the Regulations are critical in light of South Africa's security concerns.3

Notwithstanding, the new Regulations are on the books and global mobility professionals dealing with immigration matters need to be aware of this major

1 Government Gazette No. 37679, 22 May 2014.

2 See, e.g.: K. Magubane, "Immigration Practitioners March to Department to Protest against New Laws," Business Day/ BD Live (online), 25 June 2014; L. Donnelley, "DA: SA's New Immigration Regulations Need a Rethink," Mail & Guardian (online), 9 June 2014; K. Magubane, "New Immigration Laws Aimed at Protecting Both Locals and Foreigners," Business Day/BD Live (online), 6 June 2014; "SA's Immigration Laws to Get Radical Shake-up," News 24 (online), 27 February 2014.

3 The Department of Home Affairs: .

The Expatriate Administrator / September 2014

? 2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. NDPPS 303461

reform of South African immigration rules and processes.4 Indeed, individuals seeking entry into South Africa will now be confronted with a new set of rules and requirements on most work permit types. The new changes range from terminology changes to substantive process changes. Failure to adhere to the new rules could result in non-compliance and the imposition of related penalties and sanctions, as well as other unwanted consequences.

Background In South Africa, the much anticipated South African Immigration Regulations were finally published on 26 May 2014. The Regulations have been issued on the heels of the amendments enacted through the Immigration Amendment Act, No. 13 of 2011 and deal with changes brought about by that Act. The Regulations, which took effect from the date of publishing, will have a substantial effect on the experience of inbound expats; however, the visa application process is expected to be more efficient.

Perspectives on the New Regulations For some, the new Regulations are seen as a positive addition to South Africa's immigration system and will help bring South Africa in line with international immigration regimes. For others, the new Regulations may lead to increased bureaucracy and heightened frustrations for foreigners wishing to immigrate to South Africa as well as local companies that are seeking to employ foreign skilled workers. It should be noted that the core aim of the new immigration regulations

Expired Visas: Foreigners who over-stay their visas for a prescribed number of days will be declared undesirable for a period varying from 12 months to 5 years depending on the extent to which they have exceeded their permitted stay in South Africa.

is to protect jobs for South Africans while helping ensure that the appropriate scarce skills are attracted to South Africa. Omissions and ambiguities have been identified in the new Regulations, which, if not properly addressed, could cause disruptions to the immigration system.

Summary of the Changes Terminology Change: Henceforth "permits" will now be referred to as "visas." The only category that will make use of the term "permit" will be the Permanent Residence Permit.

Spouses and Life-partners: Applicants in a life-partnership or spousal relationship with a South African/ permanent resident or a foreign national who holds a long-term visa will be required to prove that the relationship existed for at least two years (prior to the application for a visa) in order to qualify for an accompanying or dependent visa.

Children: All children are now required to travel on their own passport. As from 1 October 2014, an unabridged birth certificate of the child reflecting the particulars of the parents is required for children travelling with parents (in addition to the child's own passport).

In addition to the above, there have been several amendments to requirements and procedures for various categories of visas.

Processing: The Department of Home Affairs has essentially outsourced the processing of visa applications to a company called Visa Facilitation Services (VFS). Starting in early June 2014, the VFS is opening 11 offices across the country to be known as Visa Application Centres (VACs); offices are in Bloemfontein, Cape Town, Durban, George, Johannesburg, Kimberley, Nelspruit, Polokwane, Port Elizabeth, Pretoria, and Rustenburg.

Renewals: Applications for renewals will no longer be submitted at the Regional Office of the Department of Home Affairs, but rather through the abovementioned application centers 60 days before the expiry of the current visa.

Changing Visas: Applicants will no longer be allowed to change their status from a visitor's visa to a long-term visa within South Africa unless exceptional circumstances exist. Applicants will need to travel back to their home countries to submit applications should they need to change their status.

Authorization to Conduct Work on a Visitor's Visa [section 11(2)] Under the terms of a recently issued Directive following the Regulations, the authority to issue Section 11(2) visas and authorizations for shortterm work activities have been delegated to South African Missions abroad. Applicants are now required to apply and get authorizations at the South African Mission in their country of residence before traveling to South Africa. The Directive further requires an application to contain documentation confirming the purpose and duration of the visit, nature of the work, qualifications/skills required, place of the visit, and details of the prospective employer.

Advantages: Even though processing time will vary and depend solely on the South African Mission, each Mission will commit to a service standard in respect of issuing authorization letters. Unlike the previous situation, a foreigner entering South Africa to work for a period

4 For another KPMG report on this development, see Flash International Executive Alert 2014-063, 2 July 2014.

The Expatriate Administrator / September 2014

? 2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. NDPPS 303461

will carry an authorization letter that will ensure his or her visa is endorsed upon entry with an authorization to conduct work for a period less than 90 days (a Section 11(2) visa).

Disadvantages: Some foreign Missions are not yet able to issue authorization letters in accordance with the new Section 11(2) Directive. Furthermore, it is expected that there will be inconsistencies with regard to the processing times within each Mission, and employers and travelers should anticipate and plan for delays.

Intra-Company Transfer Work Visa At the discretion of the Department of Home Affairs and subject to the length of the assignment, the Intra-company transfer work visa may be issued for a maximum period of 4 years (previously 2 years). However, the Intra-company visa still may not be extended. In addition, the employee has to be employed abroad for a minimum of 6 months before he or she is eligible to make an Intra-company transfer work visa application. Further, the South African host entity needs to develop a plan for the transfer of skills to a South African citizen or permanent resident. All other requirements remain unchanged.

Advantages: The visa may now be issued for a longer period than before (4 years as opposed to 2 years).

Disadvantages: The South African host entity is now required to develop, implement, and maintain a skills transfer plan. (It is not clear whether the skills transfer plan will be inspected, but the KPMG International member firm in South Africa will monitor the developments and advise of any progress.)

General Work Visa The new Regulations now require a certificate from the Department of Labour to accompany the General work visa application. The certificate must confirm the unsuccessful search for a South African citizen or permanent resident to fill the relevant position.

Advantages: The processing time for issuing the General work visa by the Department of Home Affairs should be faster as the employer would already have submitted proof that a foreign worker was required to fill the position.

Disadvantages: It is unclear at this stage how long the Labour Certificate application process will take. Furthermore, the recommendation process by the Department of Labour may include a labor inspection at the employer's premises and investigation into the employer's Employment Equity plan.

Critical Skills Work Visa Both the quota and exceptional skills work permits have been replaced with the Critical skills work visa. An application for a Critical skills work visa has to be accompanied by:

? Proof that the applicant falls within the "critical skills" category. The proof must take the form of a confirmation in writing from the accredited professional body, council, or board recognized by the South African Qualifications Association (SAQA), or any relevant government department, confirming the skills or qualifications of the applicant, as well as the appropriate post-qualification experience. (In addition, should the applicant be required by law to be registered with a professional body, council, or board recognized by SAQA, the registration certificate (or proof of application) must accompany the application for the Critical skills work visa.)

? Proof of evaluation of the foreign qualification by SAQA, translated by a sworn translator into one of the official languages of South Africa.

Advantages: The critical skills categories were published on 3 June 2014.5 The new list has been extended and it covers categories such as Agriculture, Architecture, Business and Management studies, ICT skills, Engineering, Health Professions, Life and Earth Sciences, Professionals and Associated Professionals, Trades, BPO, and Academics and Researchers.

Disadvantages: Only SAQA-accredited professional bodies or the relevant government department can confirm a foreigner's qualifications, and some professional bodies are not yet registered with SAQA. It is possible that current holders of quota and exceptional skills work permits may not qualify for the Critical skills work visa. No grandfathering provisions were stipulated.

Corporate Visa When applying for a Corporate visa, an applicant must prove that at least 60 percent of the total staff of the business is or will be comprised of South African citizens or permanent residents. Upon the successful review of the application for a Corporate visa, the corporate applicant will be issued with a corporate worker certificate in respect of the relevant individual. The corporate applicant has to return the relevant corporate worker certificate issued by the Department of Home Affairs

5 See: .

The Expatriate Administrator / September 2014

? 2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. NDPPS 303461

within 30 days after termination of the employment contract of the individual. Please note that ? as with a Critical skills visa ? a SAQA certificate and proof of registration with a professional body are required for a corporate worker certificate.

Advantages: Corporate visas will allow employers to employ a large number of foreign workers on a rotational basis.

Disadvantages: The requirement to employ 60 percent South Africans or permanent residents could make certain projects difficult as the required skills might not be readily available in South Africa. Corporate visa holders cannot extend nor change the visa status of foreigners within South Africa. Corporate visas will take longer to prepare due to the SAQA requirement. Individual Corporate work visas will only be issued for 3 years (previously 5 years).

Sanctions for Exceeding a Visa There are serious repercussions for individuals who remain in South Africa beyond the timeframe stipulated in their visas. Any foreign individual who attempts to depart South Africa after his or her visa has expired will no longer be fined; however, he or she will be

declared "undesirable" in terms of section 27(3) of the Immigration Act, No. 13 of 2002, for a period varying from 12 months to 5 years depending on the extent to which that individual has exceeded his or her permitted stay in South Africa. A submitted extension application and receipt thereof is not sufficient to prevent this measure. This practice is already in place at South African airports.

This assignation could be embarrassing for the individual as well as the company he or she works for; in addition, it could impact the business in South Africa (e.g., the completion of sales and marketing projects, training, winning new customers, etc.). Therefore, an organization's global mobility and immigration professionals should set out unequivocal policies and communicate clearly the arrival and departure strategies and dates for the relevant foreign workers in South Africa.

Conclusion It is not unusual in this busy, "needs to be done yesterday" business world in which we live for immigration matters to be left for the last minute, especially

when an organization has a crucial deadline or a project that has quickly materialized and the right person is needed in the right place with minimal delay. However, as countries around the world tighten their immigration regimes, it is becoming ever more critical that organizations plan ahead, stay abreast of the rules, and comply therewith.

In South Africa, the new Regulations will require adjustment and adherence by organizations in South Africa bringing foreign workers into the country and overseas organizations moving employees into South Africa. It is suggested that all new applications be critically assessed to identify risks and to ascertain whether they conform to the new South African immigration rules. As noted above, in some cases, there are new bodies responsible for visa and work permits issuance ? e.g., applications have to be submitted through a Visa Facilitation Service Company ? and there are new sanctions on individuals who are too casual about their departure from South Africa ? as noted, those who overstay their visa duration can face severe sanctions.

In light of the changes in South Africa, global mobility professionals dealing with immigration matters should waste no time in familiarizing themselves with the new rules and procedures. Employers engaging the services of foreign nationals in South Africa should take particular care to make sure that their internal processes and systems are aligned with the new Regulations and that their policies are clearly communicated to those employees concerned.

The Expatriate Administrator is a publication of KPMG's International Executive Services practice. Contact us at teaeditor@ Editor: Scott Shaughnessy Technical Editor: Molli Hull For more information, please contact your local IES professional.



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? 2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. NDPPS 303461

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