Section 12J Funds
Who should start a Section 12J VCC?
South African taxpayers who are looking to invest into South African companies or projects should consider forming a Section 12J Venture Capital Company (VCC) given the significant tax incentive they would receive.
Examples of some of the sectors/areas within which VCCs have been implemented successfully include:
- renewable energy
- commercial and residential roof top solar solutions
- large PV projects
- wind energy projects
- franchises
- mining – junior mining
- hospitality
- student residence developments
- hotel developments
- private equity firms & family offices
- movable property leasing
VCCs can invest across most sectors except:
- property, unless in the hospitality sector as defined in the Income Tax Act (this definition generally includes hotels, serviced apartments and student residence)
- any trade carried on in the financial services sector (i.e banking, insurance etc)
- any trade carried on in respect of financial or advisory services
- gambling, liquor, tobacco, arms or ammunition