How To Start A Security Company In South Africa

How To Start A Security Company In South Africa

Starting a security company is not the same as creating a corporate company, so we’ll take you through how to start a security company in South Africa. You need to take specific steps and have some background in the security industry. 

You can provide two types of services:

  • Security services
  • Selling security products. 

Much knowledge is required for both services because you need to know what different security equipment is for and advise people in the profession. It is possible to join the two services as well.

As a South African entrepreneur ready to take on the security industry, you must research how to establish a security company – for example, knowing what paperwork is needed to start the process. 

Letter of Good Standing

You need a ‘Letter of Good Standing’ to apply for tenders, RFQs and contracts. A Letter of Good Standing proves that your payments to The Workman’s Compensation Fund are up to date. It also implies that you are registered with the Compensation for Occupational Injuries and Diseases (COID) body at South Africa’s Labour Department.

The Workman’s Compensation Fund supports employers and their employees – casual or full-time – by creating a financial support fund if there is work-related harm or injuries. As an employer, you pay a small fee to the fund, a percentage of your employees’ salaries.

The remuneration from this fund is for an employee who cannot work because of a work injury or sent to an employee’s family who passes away due to a work-related injury. 

The Workman’s Compensation Fund ensures that companies cover subcontracted employees. You won’t receive a Letter of Good Standing without proof that your employees are covered. 

To get a Letter of Good Standing, you first need to register with COID at South Africa’s labour department. After that, SARS tells you how much you need to pay to The Workman’s Compensation Fund to cover your employees. 

SARS issue a Letter of Good Standing if your payments are made. You can also use a fast-tracked service provider to get a Letter of Good Standing.


Private Security Industry Regulatory Authority (PSIRA)

PSIRA registers your business and provides a specific Security Grading for your staff, members, directors, partners, trustees or managers. This regulatory organisation ensures that security service providers correctly follow the South African law regarding security companies and offers legal, safe and quality security services. 

People involved with your business need PSIRA-approved training and specific Security Grading. By registering with PSIRA, you undergo an examination and investigative process.  

PSIRA protects the industry from companies that are unethical, unsafe and subpar. The registration documentation can be filled out by you or a fast-tracked company registration service.

If you do the process alone, you need the following documentation:

  • B Security Grading for your staff, your members, directors, partners, trustees, or managers as security providers
  • Registered Business at the Companies and Intellectual Properties Commission (CIPC)
  • A SARS Tax Clearance Certificate, VAT Registration Number, PAYE Number
  • UIF and COID Registration, if applicable
  • One-year business plan
  • A declaration that your business will be able to operate for the next year
  • A permanent office location


Membership In Other Security Organisations

Security organisations, such as SASA, SASSETA, SANSEA or ESDA, update you on industry standards, products and developments in the security industry. You don’t have to join, but it increases your business’ credibility. 

You can either approach a fast-tracked company service provider to advise on which organisation to join or make a call to the association yourself.

iER’s network has a load of emergency services and security companies for patrons to alert and use. 


B-BBEE Affidavit or Certificate

A B-BBEE Affidavit is necessary if your company’s turnover is less than R10 million a year. A B-BBEE Certificate is needed by companies with a turnover of R10 million or more a year.  

A B-BBEE Affidavit or Certificate measures the Black Economic Empowerment in your company in terms of ownership. The measurement process becomes more complex if your company’s turnover reaches over R10 million a year. 

You can download a B-BBEE Affidavit, fill it out, and a Commissioner of Oath must sign it. For a B-BBEE Certificate, you are required to register with CIPC. 


VAT Registration

VAT registration is compulsory if your company has an annual turnover of R1 million in a year. You can voluntarily register for a VAT Registration because it is helpful when you work with larger VAT-registered companies. 

Get a VAT Registration at SARS or use fast-tracked services like Pty Company Registration.


Is It Worth It?

Planning to set up a security company thoroughly takes preparation, time and effort. It won’t come together overnight, but when it is up and running, all the planning and sacrifice you put in will be highly worth it.


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