INVESTMENT PROTOCOL PRESENTATION

1. INVESTMENT PROTOCOL PRESENTATION Mr. M. Mabuyakhulu, MPP MEC for Economic Development and Tourism 11 MAY2011

2. CONTENTS • Introduction • Rationale for Investment Protocol • Definition of Investment Protocol • Contents of Investment Protocol • Desired Outcome • Regulatory environment • Strategic and Catalytic Projects • Intervention Mechanism • Conclusion

3. INTRODUCTION The Province of KwaZulu-Natal intends to work very hard to: • attract investors and project promoters in order to grow the economy of our Province and reduce the unemployment rate • do whatever is necessary to accommodate investors’ needs without compromising our regulations The Investment protocol will address diverse needs of foreign investors and local businesses including SMMEs

4. WHAT IS THE INVESTMENT PROTOCOL • Investment Protocol entails compilation of investor-related information aimed at providing prospective and current investors with relevant guidelines with regard to: • Regulatory environment • Applicable policies and procedures • Provision of relevant services • And will be used as an intervention instrument to resolve blockages experienced by investors or project promoters.

5. RATIONALE FOR INVESTMENT PROTOCOL • Successful, comparative investment destinations are characterised by a regimen of efficiencies that enable prospective investors to have an easy entry into those destinations. • Over and above comparative and competitive advantages, including tax incentives, it is the investor’s first impressions when they interact with a destination that determines whether they will invest or not. • In the United Arab Emirates’ Abu Dhabi emirate, for example, there is literally a one-stop shop, practically on one floor of a building where investors move from one office to the next to register companies and know all there is to know about investing in that Emirate.

6. RATIONALE FOR INVESTMENT PROTOCOL • With fierce competition, particularly among emerging economies, to attract investment, it is those countries where the investor’s life is made easy that stand a better chance of attracting and retaining investments. • The comparative advantages of a destination do not matter if there are no added efficiencies in that particular destinations investment regimen. • The Investment Protocol that we unveil this morning aims to tilt the balance in our favour and introduce efficiencies that will make us a competitive destination. • Critically, this Protocol will ensure that both our comparative and competitive advantages, like our location; world-class infrastructure and resources, yield desired results and do not remain unrealisable potential simply because the investors cannot even enter our space because of tedious and onerous processes which turn off investors.

7. CONTENTS OF THE INVESTMENT PROTOCOL • Processes involved to comply with regulations; • National, Provincial and local Investment regulatory environment; • Transparency regarding the length of time it takes to complete the compliance processes such as: • Environmental Impact Assessment • Rezoning • Special Business Licenses • Etc. 4. General guidelines regarding Doing business in KZN

8. WHAT IS THE DESIRED OUTCOME? • To provide clear guiding principles and information for investors • To provide open and honest communication to investors • Eliminate ambiguity when communicating with investors • Promote ease of doing business in KZN • Fast track decision making by investors • Increase investment flows into KZN

9. SAMPLE OF KEY INVESTMENT REGULATIONS • Immigration regulations • Company Registrations • Labour regulations • Environmental Impact • Land Acquisition • Property Development • Importing and Exporting • Taxes and administration of incentives • Sector Specific Regulations

10. OTHER RELEVANT INFORMATION • Provision of infrastructure and other services • South African Trade Relations • Cooperative agreements with other countries • Important Government Institutions and their Contact Details

11. STRATEGIC AND CATALYTIC PROJECTS • Processes are similar in the main but may differ due to factors such as: • The size and strategic nature of the project • Repatriation of funds by foreign entities • Business permits for foreign entities • Tax obligations • Applicable incentives • Municipal Bylaws • Handholding and support offered by Trade and Investment KwaZulu-Natal and other public entities

12. INTERVENTION MECHANISM • For Investment Protocol to function in practice, a delivery instrument should be established • The Provincial Economic Sectors and Infrastructure Development (ESID) Cluster Committee for Heads of Departments (COHOD) has been mandated to ensure implementation of the investment protocol

13. CONCLUSION • KwaZulu-Natal is the first province in SA to develop an initiative to deal with challenges faced by local and foreign project promoters. • Continuous benchmarking will be undertaken against other countries and provinces to ensure that KwaZulu-Natal improves its investment climate

14. CONCLUSION • As we said, by launching the investment protocol we want to improve the way we do things as government and eliminate unnecessary delays and lengthy approval processes • Improvement of efficiencies is required particularly in regulations such as rezoning, environment impact assessment and connection of utilities. • Investment Protocol will serve as a baseline for identifying and advocating for change in order to unlock all the administrative blockages.

15. CONCLUSION THANK YOU