New initiative aims to accelerate venture capital growth in South Africa

South Africa is on the brink of one of its most meaningful shifts in venture capital policy to date.

Safeera Mayet, SAVCA’s Head of Policy and Regulatory Affairs

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By SAVCA

A bold new regulatory initiative aimed at unlocking global capital flows for local startups was unveiled during a panel discussion at the recent SA Venture Capital and Private Equity Association’s (SAVCA) Venture Capital (VC) Conference.

“The new regulatory sandbox is designed to give qualifying startups a faster, legally sound pathway to structure offshore intellectual property (IP) while retaining their operational base and jobs in South Africa,” said Safeera Mayet, SAVCA’s Head of Policy and Regulatory Affairs. “The move is expected to ease long-standing bottlenecks such as exchange control restrictions and slow deal-making timelines.”

Breaking down barriers

During the discussion, Pieter de Villiers, CEO of Clickatell, cautioned that without meaningful reform, South Africa would remain trapped by legacy policies that prevent founders from scaling globally. “The reality is you won’t get the exits if you can’t sell Africa,” he said. “With a rand-denominated investment, you can’t even hire a sales leader in the US – we’re locked out of these markets completely. If we want real exits and international investment, we must fix exchange control and other outdated rules.”

The new sandbox, developed after nearly a decade of consultation between the South African Reserve Bank (SARB), South African Revenue Service (SARS), and industry bodies such as the SA Startup Act Movement, SAFTA and Endeavour South Africa, marks a major turning point for VC. It will enable eligible startups – particularly those in the tech sector – to test compliant cross-border structures that allow them to raise offshore capital and expand internationally without breaching local tax or exchange-control laws.

“The sandbox is tremendously exciting in principle,” said Adrian Dommisse, Founder and Director of Dommisse Attorneys. “It allows South African entrepreneurs to remain headquartered locally while operating legally across borders. For years, we’ve seen promising founders shut down local entities and move their IP abroad simply to access funding. This gives them a way to stay and scale from South Africa.”

A win-win for founders and the fiscus

A critical step in getting the sandbox approved was demonstrating that the fiscus would not lose revenue through offshore structuring. “Once we mapped the flow of funds, it became clear that SARS actually benefits from the structure,” Dommisse explained. “The sandbox keeps local operations – and jobs – in South Africa, while enabling founders to raise the capital they need to grow globally.”

De Villiers added that the solution represents a ‘win-win’ for everyone. “What’s needed now is the collective will to finalise these frameworks,” he said. “We can’t afford to be legislatively lazy. Time kills all deals – and without action, the opportunity cost is enormous.”

Driving deal velocity through standardisation

Beyond regulatory reform, the panel also called for the standardisation of early-stage deal documentation, term sheets and ESG reporting to accelerate investment flows. Dommisse argued that South Africa’s tendency to over-engineer legal documents slows deals unnecessarily. “Imagine a world in which we could close South African VC deals in a matter of weeks,” he said. “In the US and UK, they use open-source standard templates that reduce legal complexity and cost. We can do the same here – it just requires alignment.”

Mayet noted that SAVCA and local legal experts are collaborating to develop South Africa’s own open-source VC documentation suite. “It will take time and effort upfront, but the payoff will be immense,” she said. “Standardisation can make deal-making faster, cheaper and more transparent, ultimately encouraging more investors into the market.”

Laying the groundwork for smarter policy

The speakers agreed that regulatory efficiency – while often seen as unglamorous – is central to unlocking growth. “Policy work isn’t sexy, but it matters,” said De Villiers. “For this asset class to take its rightful place in the broader economy, we have to get the fundamentals right – from how capital moves to how deals are structured.”

Crucially, the sandbox is not about bypassing the Reserve Bank or SARS, but about creating efficiencies. The pilot will test the framework with a small group of qualifying startups before broader rollout, and its success could inform permanent legislative change.

“This is the kind of groundwork that builds ecosystems,” Mayet concluded. “It’s about enabling South African entrepreneurs to compete on a global stage – without having to leave home to do it.”