| The definition of the incentive scheme
The BPO and O Investment incentive comprises an investment grant ranging between R37 000 and R60 00 per seat and a training support grant towards costs of company specific training up to a maximum of R12 000 per agent. The incentive is offerered to local and foreign investors establishing projects that aim primarily to serve offshore clients.
The objective of the incentive is to attract BPO and O investment that creates employment opportunities. The BPO Investment incentive is effective from 06 December 2006 to 31 March 2011.
Eligibility Criteria
Qualifying Applicant:
- Registered legal entity in South Africa and taxpayer in good standing
- Accepted or approved the investment project to go ahead
Qualifying Project:
- A qualifying investment project may involve starting a new operation or expanding an existing operation in order to perform business process outsourcing and off-shoring
- To qualify for BPO and O incentives the applicant must apply and be approved prior to the commencement date of
commercial operations
- The project must establish an operation of at least a 100 seats and create employment for at least 200 agents (defined as full-time equivalent) by the end of its first year in operation
- The investment project must commence its commercial operations within one year from envisaged date of the BPO
incentive grant approval
- The investment project can be a cost centre of an existing operation, a branch of an existing entity or a joint venture between entities. In a joint venture arrangement at least one of the parties must be registered in South Africa as a legal entity
- The investment project must operate activities classified as that of business process outsourcing and off-shoring and must generate at least 90% of its revenue from activities that service offshore clients. An exception to this requirement is however applicable to operations that have been in existence and operating in South Africa before March 2006, in this case 70%will be accepted
Non-qualifying Projects
- Projects expected to displace existing jobs within South Africa, for example by way of relocating an existing BPO and O facility, in full or part within South Africa; and /or transferring the capacity from a client, a competitor, or an associated operation in South Africa, will not qualify for the incentive
- Projects receiving or approved to receive industrial incentive benefits under the Small Medium Enterprise Development Programme (SMEDP) or its successors
Investment Incentive Calculation
The investment grant ranges from R37 000 to R60 000 per seat depending on the level of qualifying investment expenditure and employment creation, as follows:
| Employment creation of full time equivalent of agents |
Qualifying investment expenditure per seat |
Grant per seat |
| Between 200 and 499 |
At least R74 000 |
Between R37 000 and R44 600 |
| 500 and above |
Greater than R89 200 |
Between R44 601 and R60 000 |
| At least 200 |
But less than R74 000 |
Between R37 000 and R52 300 OR 50% of agents salary cost for first 2 years whichever is less |
-
A project employing between 200-499 agents with Qualifying Investment Expenditure of more than R74 000 per seat is
eligible for a grant between R37 000 and R44 600 per seat
- A project employing 500 or more agents with qualifying investment expenditure greater than R89 200 per seat is eligible for a grant between R44 601 and R60 000 per seat
- Should a project have qualifying investment expenditure of less than R74 000 per seat, but 200 or more agents, it will be eligible for a grant between R37 000 and R52 500 per seat. The approved grant may not exceed 50% of the salary costs of agents for the first 2 years of the project.
Training and Skills Support Incentive Scheme
The training and skills support grant provides support in respect of company specific training requirements. The same eligibility criteria apply as in the investment grant, except that the applicant must prove that he/she has incurred expenditure on qualifying training and skills development activities. A project has to qualify for a investment grant prior to accessing a training and skills
support grant.
Benefits of the incentive scheme
The grant is to be calculated as 50% of qualifying training expenditure up to amaximum of R12 000 per agent.
Qualifying Training Expenditure
The qualifying training and skills development expenditure are for company / client specific skills requirements in the following areas:
- Costs for company specific training e g products training language training, systems training
- Costs of in-house trainer development / skills development facilitators/in-house assessors training
- Costs for development of learning materials / programme
- Costs for trainer secondment to South Africa
- Costs of purchasing and installing training equipment and facilities
Non-Qualifying Expenditure
Costs of generic training requirements such as the following items are not eligible: basic IT skills, financial, communication (verbal and written), customers service, entrepreneurship, and business acumen.
Grant Disbursement
The grant will be disbursed upon completion of approved training and actual expenditure incurred as at the end of the first 6 months and first financial year, or later as per approval conditions.
Submitting an Application Form
- Project submit applications to the dti
- Applicant submits 2 copies of the application to the dti
- the dti assesses eligibility of the applicant and project against eligibility criteria
- Projects presented to adjudication committee for a decision
- Monthly adjudication committee decisions
- Decision to be communicated to applicant in writing
(if applicable)
- Signing of grant contract between the applicant and
the dti
- Submit claims to the dti, according to the approved claim stages and in line with the performance requirements at each stage
- Site inspection to monitor and report progress on approved projects
Schedule of applicable terms
Download the Schedule of applicable terms - 15 August 2009
For more information contact:
Physical address:
the dti Campus
Building A
77 Meintjies Street Sunnyside
PRETORIA
Administrators:
Secretariat
012 394 1040
012 394 1874
Business Development Unit
012 394 1115
031 305 3389
041 582 1267
021 480 8051/60 | 
