Yesterday, in the 2017 Budget Review National Treasury announced that, “Government proposes that companies and individuals no longer need the Reserve Bank’s approval for standard intellectual property transactions. It is also proposed that the “loop structure” restriction for all intellectual property transactions be lifted, provided they are at arms-length and at a fair market price. Loop structure restrictions prohibit residents from holding any South African asset indirectly through a nonresident entity.”
This is a huge win for the industry, as it will no only decrease the administrative and legislative costs associated with IP transfers and loop structures, but will also encourage more off-shoring of services to South African companies, stronger commercial partnerships with international companies, and more offshore funds investing in local start-ups.
The engagement with SARB and National Treasury has been lead by Aalia Manie, IP & tech lawyer at law firm Webber Wentzel, and recently appointed Silicon Cape Community Council member, who has spend huge amounts of time and energy, lobbying on behalf of us all. Thank you Aalia for all your efforts in creating an enabling ecosystem.
For a full interview on this ruling and impact here is an interview with Aalia that appeared in VentureBurn by Graham van der Made.