AEROTROPOLIS RAIL CLUSTER DEVELOPMENT AND INVESTMENT MAKING BEST

AEROTROPOLIS RAIL CLUSTER DEVELOPMENT AND INVESTMENT MAKING BEST USE OF FISCAL INCENTIVES 17/18 NOVEMBER 2015

VALUE CHAIN SPECIAL ECONOMIC ZONE & MCEP CLUSTER MAJOR SUPPLIE R Section 12 l – Additional Tax Allowance Critical Infrastructure Programme TIER 1 SUPPLIE R TIER 2 SUPPLIE R Manufacturing Competitiveness Enhancement Programme Incubation Support Programme Section 12 l – Additional Tax Allowance Critical Infrastructure Programme Black Business Supplier Development Programme Research & Development Incentives Automotive Production Development Programmer 17/18 NOVEMBER 2015

INCUBATION SUPPORT The ISP is one of the support measures to encourage partnerships in which big business assists PROGRAMME SMMEs with skills transfer, enterprise development, supplier development and marketing opportunities. • Encourage private sector partnerships with Government on a cost-sharing basis to develop SMMEs and nurture them into sustainable enterprises that can provide employment and contribute to economic growth. Potential benefit: Costsharing grant of R 10 million per year for three years • Provides funding for incubators that over time can generate revenue through the provision of services and initiatives that can be self-sustainable within a period of 2 to 3 years. • The grant approval is capped at a maximum of R 10 million (VAT inclusive) per financial year over a 3 year period and is subject to the availability of funds. • The ISP offers a cost-sharing support of 50: 50 for large businesses and a cost-sharing of 40: 60 for SMMEs. • After the 3 year period, applicants may apply again. QUALIFYING COSTS • • • 17/18 NOVEMBER 2015 Business Advisory Services Coaching and mentoring Training Facilitation of funding Production efficiency and improvement Quality and standards acquisition • Market access • Machinery, equipment and tools • Infrastructure linked to the incubator (buildings and furniture) • Feasibility studies for establishing and/or expanding the incubator • Product and service development • ICT and operational costs

MCEP CLUSTER Support to cluster and partnerships of 5 or more entities films, engineering 80: 20 cost sharing services and Excluding export grant conformity counciils, industry assessment service Limited to R 50 associations, Salaries, wages, rent in the manufacturing million per cluster governments funded and general office industry to define project entities and trusts costs are nonand implement qualifying collaborative Each cliuster projects related to member must production and contribute 10% marketing that will enhance productivity and • competitiveness All members must have decision making powers either by virtue of being Directors and/or voting members • • • of the NPC. Eligible projects should be aimed at assisting efforts to improve productivity and competitiveness of member companies. Projects may not be general purpose in nature. Qualifying costs include: • Cost of developing shared infrastructure; and • Process improvement costs • External costs – not salaries and wages 17/18 NOVEMBER 2015

JOBS FUND Objectives of the Jobs Fund • To co-finance projects by public, private and non-governmental organisations that will significantly contribute to job creation. • Funding interventions will seek to overcome barriers to job creation that have been identified. o Some of these relate to demand for labour, some to the supply of labour and some to the broader institutional environment. The Jobs Fund has been designed specifically to overcome these barriers by providing public funding through four “funding windows” • Enterprise Development; o Initiatives which leverage existing private sector capacity, experience and resources to facilitate job creation • Infrastructure Investment; o Light infrastructure investments which will unlock investment and activity linked to additional job creation • Support for Work Seekers and o Innovative approaches to training and job placement which enables jobs for unemployed work seekers. • Institutional Capacity Building. o Institutional strengthening and capacity building of entities that underpin the effective operation of SA’s labour market and employment facilitation entities. 17/18 NOVEMBER 2015

CIP Cash incentive of between 10% and 30% of qualifying infrastructure cost. Aimed at supporting investors to undertake a defined fixed investment, or expansion of existing investment and is available to manufacturing and mining sector. Minimum investment Greenfield / Brownfield None Mandatory requirements • Connection to a new investment or expansion project; • Score at least 50 points for the Economic Benefit Criteria Other requirements • Infrastructure must be critical • Industrial parks allowed • Renewable energy projects allowed (60% sourced locally) BEE level required Level 4 mandatory requirement Maximum incentive Application submission requirements Must apply before start of construction of infrastructure. R 30 million To be safe, apply at least 3 months prior to start of construction. Total Points Scored CIP Funding 50 – 59 10% 20 60 – 69 15% Investment Value – Total capital investment excluding infrastructure investment 30 70 – 79 20% Projects in Special Economic Zones (SEZ’s): Industrial parks; Urban Renewal Development Nodes; Rural Development Nodes; Business Incubators and land for agricultural activities or in any other area deemed to be economically depressed 25 80 -89 25% 90 – 100 30% Criterion Description Max points B-BBEE Compliance Requirements BEE scoring of more than 65 (level 4 or more) 25 Priority Sectors as identified in IPAP 2; Projects in: Mineral Beneficiation Industries; Agricultural and Construction Investments and other labour absorbing sectors Investment Value Location TOTAL 17/18 NOVEMBER 2015 100

QUESTIONS tchipfupa@cova-advisory. co. za 0827898915 17/18 NOVEMBER 2015