R157m in incentives for BPO projects

8 September 2011

South Africa has approved grants worth R157.76-million to 10 projects over the next three years under its business process outsourcing incentive scheme, says Trade and Industry Minister Rob Davies.

The grants will be disbursed to 10 projects over the next three years. They are expected to create over 11 000 jobs. Companies that will receive grants include Old Mutual Assurance, Call Centre International and Amicorp South Africa.

“The incentives will be used to offset expenditure in order to make applicants more globally competitive when servicing offshore clients out of South Africa,” Davies said in Parliament in Cape Town this week. “The grants cover only a portion of the operational costs related to the project.

“Disbursements are not made upfront but are paid only after confirmation that jobs have been created.”

There are no additional restrictions placed over and above the normal forex regulations on how companies can use their grants.

The jobs created by the beneficiaries have to be in place for a minimum period of three years. This implies that if a company creates additional employment at the end of the third year, it will have to retain all jobs over a period of five years.

“There are no further restrictions preventing companies from ceasing operations after the incentive period,” said Davies.

In January this year, the Department of Trade and Industry announced a new set of incentives aimed at attracting foreign investment in an effort to strengthen the country’s presence in the business process outsourcing and offshoring industry.

Source: BuaNews