6 Steps to Open Stripe Account in South Africa by Forming A UK Company
As companies strive to cross national borders and expand into global markets, choosing a secure payment method has become a crucial step for business success. Simply put; it is no longer enough to act small and play it safe. Now everyone sees the need to broaden their horizons and go global.
In South Africa, with its vibrant economy and consistent drive for entrepreneurship, global expansion is an ambition that is commonly pursued, so that the need to engage in international transactions is not solely beneficial for business but is critical for the sustainable national development. Therefore, having access to an international payment gateway is not just a transactional choice anymore but major necessity.
To bring solution to this need, Stripe has emerged as a leading innovative service provider in this fostering transactions. In fact, it is quickly becoming the preferred choice for many businesses due to its user-friendly interface, strong security features, and compatibility with an array of currencies. Hence, for South African enterprises with global aspirations, unlocking Stripe's full potential necessitates a bold decision.
Before you go further, you may want to ask – is Stripe available in South Africa?
Frankly No. However, you can open a stripe account in South Africa for your business by forming a UK-based limited company (LTD). This post will show you in detail how to go about it. Let’s get started!
Why Should you follow the UK Limited Company Route?
You may be contemplating why you should opt for the formation of a limited company in the UK as a means of setting up your stripe account in South Africa, instead of exploring possible alternatives. These queries are valid, and we will delve into them below.
To start, Stripe can operate in South Africa with an active and valid Stripe account. However, it's essential to note that Stripe doesn't have direct support for South Africa. This means you cannot register a Stripe account directly from South Africa or link a South African bank account to withdraw your funds.
Hence, to fully operate and use Stripe in South Africa, the step you have to take involves establishing your business in a country where Stripe has support, like the UK or the US. Also, setting up a bank account in this chosen country (UK or US) is necessary for the process. Once you have this sorted, you can proceed to register for a Stripe account which will enable you to seamlessly accept payments from your customers.
To mention, several third-party services, such as Incorpuk, specialize in helping businesses set up a limited company in the UK and opening a bank account. These services go the extra mile to assist in configuring your Stripe account for seamless payment processing. Lastly. while there are additional steps to consider when using Stripe in South Africa, it remains a popular and secure payment gateway, contributing to the growth of businesses. Need help registering your UK Limited company or opening a Stripe account? Kindly contact Incorpuk today.
7 Advantages of Setting Up A UK Limited Company
Here are 7 advantages of setting up a UK Limited company.
1. Strategic Location
Setting up a UK limited company in London is a strategic plan that goes beyond geographical considerations. The city is known for being a finance and business powerhouse in the world, with a unique legal value that makes business in the location equal with other companies at the highest international level.
Also, London's status as a business and financial center has placed the company at the forefront of global business excellence. In addition, the presence of major financial institutions, a pool of talent and a strong legal system help to improve the quality and competitiveness of companies operating in the city. All means that the UK not only provides a strong foundation for companies to operate but also enhances their credibility and value on a global scale.
2. Global Banking Access
Another advantage of setting up a UK-limited company is the convenient ability to integrate with international banks, especially through platforms like Stripe. This strategic feature is important to coordinate international transactions and position companies as a global player in the financial sector, with Stripe playing an important role in providing these banking services.
With Stripe, companies can easily manage cross-border transactions, manage multiple payments, and seamlessly participate in global financial services. For this reason, through the bank's partnership with Stripe, UK-based companies have access to a full range of financial services tailored to the needs and complexities of doing business on a global scale.
3. Flexibility of International Expansion
One of the advantages of a UK-limited company is that it offers unparalleled flexibility for international expansion. This flexibility is reflected in the ability to re-register the company in different parts of the world, subject to legal approval. This strategic advantage of having a limited company in the UK allows the companies to establish business centres in various countries and promote a range of activities, from satellite channels to newspapers, magazines, insurance companies and financial services.
This flexible approach is well-suited to the global business environment and allows the company to adapt to different market conditions and regulatory frameworks. Even more, by establishing business centres in various countries, the British company has not only expanded its business scope but also strengthened its operational capabilities, thereby increasing flexibility and adaptability to the emerging global business environment.
4. Founder's Authority
Another advantage of choosing a UK-limited company is that the founders retain full control of the company. This vital element allows visionary leadership and decision-making as per company rules and legal mandates. The authority given to the founders plays an important role in the strategic planning of the company.
This capability extends to critical decision-making processes, covering everything from business operations to long-term planning, thus ensuring that the founder, as the driving force behind the company, can effectively implement his or her vision and make decisions that are in line with the company's overall goals and objectives. Securing the power of the Founder is not merely a rule of law; it is a technique to improve your decision-making ability and capability. This empowerment allows founders to respond quickly to market conditions, take advantage of opportunities that arise, and overcome challenges with foresight.
5. Capital Structure with Shares
An advantage of setting up a UK limited company is the share-based capital structure. This dynamic financial system allows a high level of flexibility as the value of shares is determined by the board members. There are several advantages to using stock as the basis of a company's capital structure. First, it allows shared ownership so that multiple stakeholders can invest in the company. This not only facilitates capital raising but also promotes diversification of ownership structure, thereby contributing to stability and flexibility.
Furthermore, the flexibility of the fixed share price allows the board to adjust the company's capital to meet changing needs. The presence of shares also makes the company more attractive to potential investors. This is especially important when seeking external funding or considering partnerships
6. Independence during the fundraising process
One advantage of choosing a UK-limited company is the financial freedom it offers, especially in the area of fundraising. The legal and financial structure of a UK limited company allows companies to raise the funds needed for projects without relying solely on traditional banking methods. This freedom from traditional funding sources avoids the restrictions and requirements associated with bank loans.
UK limited companies may explore other funding options, including equity financing, crowdfunding or attracting individual or institutional investment, rather than being bound by the bank's terms and conditions. Additionally, the freedom of fundraising increases the ability to raise money without personal guarantees, which can be a challenge for many. This unique feature enhances the company's ability to obtain capital, increases its autonomy and reduces dependence on financial support from external organizations.
7. Tax Benefits
A major advantage of operating as a UK limited company is the potential tax benefits when trading outside the UK. As long as the company's business is based in the UK, it enjoys clear tax-free benefits, providing a strategic tax advantage that can increase the value of the currency internationally. This non-UK tax exemption provides a strong incentive for companies looking to establish a global presence.
This enables companies to allocate resources more efficiently and direct funds to growth plans, innovation and investment without incurring the burden of UK corporation tax. There is no tax on transactions made outside the UK, allowing the company to be more competitive in the international market.
The value advantages it offers are key to attracting international customers, partners and investors, creating an environment that allows growth and success. Additionally, by reforming the tax system and taking advantage of existing tax benefits, companies can increase their profitability and create a financial system that supports stability and long-term growth.
6 Steps to Open a Stripe Account in South Africa Through Forming A UK Company
To help you out in embarking on this journey like we earlier promised, here are the important steps to take below:
1. Validate Your Business Name
Initiate the UK company setup by ensuring the uniqueness of your chosen business name. Your selected name must be unique, not resembling any previously registered company name in the UK.
2. Choose Your Service Address
Select your service address, which serves as both the registered office address and the directors' delivery address. Compliance requires a UK-registered office address, which will be used by regulatory agencies for official correspondence. This also safeguards the privacy of your home address through directory services.
3. Establish Company CEO and Shareholders
For a UK private limited company, one director and one shareholder are required. As the founder, you assume the roles of the sole executive and shareholder. If you wish to include a business partner, you can add such when filling out your form. Do ensure to fill in other necessary personal information in the registration form, focusing on director and shareholder details.
4. Company Registration
The fourth step is to enter the required information for your company registration, after that, proceed with the payment. At third-party service providers like Incorpuk, the technical support team helps in ensuring your provided data is accurate. Also, post-payment and a confirmation email is sent, granting access to the company dashboard. Here, proof of identity and address must also be submitted.
For South African applicants, acceptable proof of identity includes a national passport, driver's license, voter's card, or identity card. Also, Proof of address can be validated by utility bills, driver's license, water bills, or telephone bills.
5. Establish a Business Bank Account
Following your company formation, the next step involves opening a business bank account. Again, Incorpuk helps you facilitate this process, partnering with banking solutions for a seamless setup that involves debit cards and mobile banking. After which, transferring funds from your company account to a local bank account in South Africa becomes easy and feasible.
6. Activate Your Stripe Account
The outlined steps above point you to forming a limited company in the UK. The next and final involves opening a Stripe account. After completing this process, you will be prompted to upload proof of identity and address to finalize the setup. Voila, your journey is accomplished, and you are good to go! Just in case you would love to be taken by the hand to finalize this step, the Incorpuk customer support team guides you through the step-by-step process of activating a Stripe account using your UK business and commercial bank account.
Frequently Asked Questions
1. Can Stripe Function in South Africa?
Stripe can operate in South Africa if you possess an active and valid Stripe account. However, it's crucial to note that Stripe doesn't provide direct support to South Africa and, hence does not fully operate there.
2. Is Stripe Present in South Africa?
No, Stripe is not established in South Africa. Currently, it extends full support to 46 countries worldwide. While South Africa is anticipated to be added as a supported country in the future, Stripe currently lacks a presence in the region.
Availability of Stripe in South Africa
Yes, and No. This answer is because, while it does have some function in South Africa as mentioned with specific requirements to be met, the direct opening of a Stripe account with a South African address is not an available option.
3. How Does Stripe Operate in South Africa?
To enable Stripe functionality in South Africa, you must create an account in one of the supported countries like the US or the UK. This involves registering a business entity (a US LLC or a UK LTD company), acquiring a tax identification number from the relevant country's IRS, and obtaining a phone number, address, and bank account. Utilizing these details, you can open a Stripe account in South Africa without the need to travel abroad.
Need Help Opening a Stripe Account Today?
Incorpuk lives and breathes to help businesses in the UK and outside the UK with their company formation needs. If you need help opening a stripe account for your business, Incorpuk is what you need to achieve this goal. Kindly contact Incorpuk today.
Conclusion
For South African businesses with a need for international payment gateways, Stripe has emerged as a leading innovative service provider. While Stripe does not provide direct support to South Africa, a UK-based limited company (LTD) can be formed to register for a Stripe account, which enables seamless payment processing.
Setting up a UK-limited company offers several advantages, including strategic location, global banking access, flexibility of international expansion, founder's authority, capital structure with shares, independence during the fundraising process, and tax benefits. The steps you can follow to open a Stripe account in South Africa by forming a UK company have been detailed in this article for your use. Lastly, although Stripe has yet to announce plans to fully operate in South Africa, South Africa's consistently growing economy and a sizable young population have made potential expansion expected in the near future.