How To Register A guest House In South Africa

A guest house is a private house offering accommodation to paying guests.

Below is How To Register A guest House In South Africa

What are the requirements to open a guest house in South Africa?

A proven available investment amount must be from funds introduced to South Africa from abroad.

The employment of 60% South Africans.

A comprehensive business plan.

An appropriate company structure

Does a guest house need a licence?

As with other businesses, all hotels and guest houses where customers or staff are watching or recording TV programmes as they are broadcast must be covered by a valid TV Licence. The good news for managers and owners is that a single licence covers the first 15 rooms on any one site.

 What type of permit would I need for opening a guest house in South Africa as a foreigner?

Any foreigner wishing to own and operate a business will be required to obtain a business permit in order to legally do so. A guest house of any size or description is classified as a business and therefore a business permit will be required.

What comes first the business or the property?

Often known as the chicken and egg scenario – if you first commit to buying a guest house you then have to concern yourself with obtaining a business permit. If you first obtain the permit what if you cannot find a suitable guest house?

The reality of it is that you risk a significant financial and emotional investment by first purchasing the guest house. The repercussions of actually purchasing and then not getting the business permit can be catastrophic.

There is no requirement for you to first obtain the guest house and the business permit is issued on the pending future purchase. Therefore the correct process will be first to obtain the business permit.

What’s the criteria for a business permit?

There are various criteria that must be met including the below:

A proven available investment amount of must be from funds introduced to South Africa from abroad.

The employment of 60% South Africans

A comprehensive business plan

An appropriate company structure

I am coming with my partner / wife can we both work in the guest house

Often one of the reasons for opening a guest house in South Africa is that couples wish to work and spend more time together. Whilst a business permit is issued to a single main applicant there is the ability to add accompanying spouses/partners to the application. The same applies to dependant children as well. However please note whilst the partner can work in the guest house they can not receive remuneration unless they hold a work permit – but to reiterate they are able to assist the partner holding the business permit.

What tips can you give me for locating the right guest house?

When opening a guest house in South Africa, securing the right one in the right location is paramount to its chances of success. Traditionally in South Africa guest houses are marketed by estate agents and seem to fall in between that gap of commercial and residential.

Subsequently, many agents offering guest houses for sale simply look at the value of the property and even add on to this valuation due to the property being a guest house. This often results in inflated prices that do not reflect the ‘business’ worth.

Depending on your objectives it is more than likely you are looking to buy a business and you should seek appropriate guidance in doing this.

Intergate recommends you use the services of a property buyers consultancy, such as SAHomeBuyers. They do not sell the property but act for buyers in sourcing, negotiating and guiding you through the various regulations and potential pitfalls that buying and opening a guest house involves.

Where can I can get assistance with a business plan?

At Intergate we have assisted hundreds of overseas clients in securing their business permits. Our service is a turnkey service that provides and covers all aspects of the business permit application for opening a guest house including the business plan.