Starting a Business After Retirement in South Africa

By / September 23, 2025

Retirement is no longer a full stop. For many South Africans, it is a comma: a pause before turning hard-won […]

Starting a Business After Retirement in South Africa

Retirement is no longer a full stop. For many South Africans, it is a comma: a pause before turning hard-won experience into a flexible, purpose-driven venture. Whether you want to supplement your pension, stay mentally active, or build a family legacy, starting a business after retirement can be both fulfilling and financially prudent. This guide walks you through the opportunities, rules, tax and compliance essentials, and practical steps to launch a sustainable business in your 60s, 70s and beyond.

Why start a business after retirement?

1) Income resilience. Even well-funded retirement plans can be pressured by medical inflation, family obligations and longevity. A modest, well-structured business can add cash flow without depleting investments.

2) Flexible autonomy. You choose your hours, clients and pace. Many retirees prefer consulting, tutoring, small e-commerce, or specialised services that generate income without a 50-hour work week.

3) Purpose and health. Entrepreneurship can keep you socially connected and mentally engaged. That matters for well-being and quality of life.

4) Legacy and succession. A microbusiness can become a vehicle to mentor younger relatives, create jobs, and transfer skills.

Common myths (and what the data actually suggests)

  • “I am too old to start.” Experience compounds. Industry knowledge, networks and reputation are advantages money cannot buy. Older founders often pick profitable niches and avoid rookie errors.
  • “It takes huge capital.” Many retiree-run ventures are asset-light: advisory, home-based food production, bookkeeping, compliance support, editing, coaching, property management, online stores with local fulfilment, or franchising with funding support.
  • “Compliance is impossible.” South Africa has a clear pathway for small enterprises. If you follow a checklist and keep records from day one, it is manageable.

Pick a structure that fits your risk and lifestyle

Your choice affects liability, tax, admin workload and succession.

Sole proprietor

  • What it is: You trade in your own name.
  • Pros: Simple to start, minimal cost, easiest bookkeeping.
  • Cons: No liability shield; business risk is your personal risk. Taxed at individual rates.

Private company (Pty) Ltd

  • What it is: A separate legal entity registered with the CIPC.
  • Pros: Liability protection, easier to bring in partners or sell, more credible to corporate clients and financiers.
  • Cons: Annual returns, basic company secretarial hygiene, and corporate tax filings.

Partnership

  • What it is: Two or more people trade together under a partnership agreement.
  • Pros: Simple, flexible, can be a stepping stone to a company.
  • Cons: Joint and several liability; partner disputes can be costly without a robust agreement.

Trust or non-profit company

  • Best when: Your goals are succession planning, philanthropy or community projects. These require specialist advice.

Rule of thumb: If the business will engage the public, hire staff, or sign leases, a Pty Ltd is usually worth the modest extra admin for liability protection and future options.

Registering your company: the simple route

You can register a company and get a tax number in one workflow online. Standard private company registration is low-cost and can be done with or without reserving a name. You can add domain registration and other services in the same flow. Have your ID, residential address and a sense of who the initial directors will be.

Next steps after registration

  • Open a dedicated business bank account (do not mingle personal and business funds).
  • Set up cloud bookkeeping (for example, Sage, Xero, or QuickBooks Online) and a simple POS/invoicing tool if you sell to the public.
  • Draft a one-page Founders’ Charter: decision-making, profit withdrawals, and conflict resolution (even if you are working with family).

Licences and permits you might need

Not every business needs a sector licence, but certain activities do. Typical retiree ventures that may trigger licensing or certification:

  • Food handling or catering: You will likely need a Certificate of Acceptability (CoA) for food premises under the national hygiene regulations, issued by your local municipality’s Environmental Health division.
  • Restaurants, take-away outlets, accommodation or entertainment: Many municipalities implement the Businesses Act, 71 of 1991 through local by-laws and require a business licence.
  • Liquor sales or manufacturing: Separate liquor licences apply (provincial).
  • Health, beauty and certain services: Municipal by-laws may require inspections or permits (for example, hair, tattoos, wellness studios).
  • Signage and home-based businesses: Check municipal zoning and signage rules to avoid fines.

Always check your municipality’s website or customer centre for the current list, forms and fees.

Taxes: the essentials for new retiree-founders

Income tax and company tax

  • Sole proprietors declare business profits on the individual return and usually need to pay provisional tax twice per year.
  • Companies (Pty Ltd) pay corporate income tax and file provisional returns. If your company qualifies as a Small Business Corporation (SBC) (shareholder and turnover conditions apply), it may access progressive SBC tax rates rather than a flat rate on the first portion of taxable income.

Turnover Tax (micro businesses)

If your annual turnover is R1 million or less, you may opt into Turnover Tax. It simplifies compliance by taxing turnover at graduated rates instead of net profit. It is optional and not always cheaper; ask a practitioner to compare scenarios.

VAT (Value-Added Tax)

  • VAT is levied at a standard rate on taxable supplies made by registered vendors.
  • Mandatory VAT registration applies when your taxable turnover exceeds R1 million in any rolling 12-month period, and you must apply within 21 business days of exceeding it.
  • Voluntary VAT registration is possible below R1 million in defined cases (often useful for B2B services with input VAT).
  • Accurate invoices and timely VAT returns are critical to avoid penalties.

Employees: PAYE, UIF and COIDA

If you hire staff (even part-time), you may need to:

  • Withhold and pay PAYE and SDL where applicable.
  • Register and contribute to the Unemployment Insurance Fund (UIF).
  • Register with the Compensation Fund (COIDA) for workplace injuries and diseases; many clients will ask for a Letter of Good Standing.

Tip: Put these in your launch checklist so they do not become urgent under a client deadline.

Retirement savings and your new business

South Africa introduced a two-pot retirement system on 1 September 2024. In summary:

  • New contributions are split between a Savings Component (broadly one-third) and a Retirement Component (broadly two-thirds).
  • You may generally make one withdrawal per tax year from the Savings Component, subject to a minimum per withdrawal, and the amount is taxed at your marginal rate.
  • The Retirement Component remains preserved until formal retirement.

How is this relevant to your start-up?

  • Cash flow buffer: Some retirees use a modest savings-component withdrawal to fund initial working capital, then rebuild the buffer through business cash flows. This can work, but be disciplined; withdrawals reduce future retirement income.
  • RA and preservation fund rules: Traditional rules still apply at retirement: usually up to one-third may be taken as cash, with the balance used to purchase an annuity (unless your fund value is below the de minimis threshold). Seek advice before cashing larger amounts to fund a business.
  • Tax: Withdrawals are taxed differently depending on whether they are savings-component withdrawals, pre-retirement withdrawals, or retirement lump sums. A tax practitioner can optimise the sequence.

If you receive the Older Persons (SASSA) Grant

The Older Persons Grant is means-tested. Business income and assets can affect eligibility. If you rely on the state grant, discuss your projected business income with a social-security advisor and keep clean records. The eligibility thresholds and grant amounts are updated periodically by government; check the latest official figures before you launch or expand.

Funding a post-retirement business: smart, not stretched

Start with needs, not wants. List essentials that directly produce revenue (for example, a food processor, a delivery scooter, domain and payment gateway, a basic laptop). Defer “nice-to-have” spending.

Typical funding paths

  • Self-funding and staged pilots: The safest route for many retirees. Test demand with pre-orders or small batch runs before committing.
  • Development finance institutions: Public agencies provide loans and programmes for viable small businesses and co-operatives. Review current offerings and criteria carefully and ensure your paperwork (CIPC, tax, statements, business plan) is complete.
  • SMME support programmes: Government programmes periodically provide equipment or infrastructure support, often prioritising township, rural or youth/women-owned enterprises. Application windows and criteria change; watch official notices.
  • Banks and asset finance: Banks offer small business loans and asset finance if cash flows and security are solid. Beware suretyships: personal guarantees can put your home or retirement assets at risk.
  • Franchising: Lower concept risk, higher upfront cost. A good match if you prefer playbooks and support.

Guardrails

  • Do not collateralise your primary residence unless you have a robust contingency plan.
  • Avoid raiding retirement capital beyond a conservative, pre-agreed ceiling. Protect income continuity first.

Business ideas that suit retirees (and why)

1) Specialist consulting or coaching

  • Monetise decades of domain knowledge. Package fixed-scope services: audits, compliance checks, training workshops, board advisory.

2) Property services

  • Sectional-title compliance assistance, short-let management, garden maintenance, inventory inspections, or senior-move management.

3) Food production and niche catering

  • Home-based baked goods, preserves, diabetic-friendly meals, or corporate platters. Ensure you secure your CoA and comply with labelling and hygiene rules.

4) Tutoring and exam prep

  • High-demand subjects: maths, accounting, languages, coding, and life-skills workshops. Offer hybrid (in-person and online) packages.

5) Compliance and admin services for SMMEs

  • Payroll and UIF submissions, VAT and basic bookkeeping, tender pack preparation, BEE affidavits for micro-enterprises (turnover permitting).

6) Repairs and refurbs

  • Small appliance repair, upholstery, furniture restoration, or instrument setup. Low capex, high craft value.

7) Tourism and local experiences

  • Guided heritage walks, birding tours, photography outings. Check local licensing and liability cover.

8) Health and wellness

  • Yoga, mobility classes, fall-prevention workshops. Verify qualifications and obtain appropriate insurance.

9) Online retail

  • Curated products with local suppliers, print-on-demand, or farm-to-door produce. Keep inventory lean; use courier partners with straightforward rates.

A practical 12-step launch plan (90 days)

Week 1–2: Clarify the offer

  1. Define one problem you solve and one ideal customer.
  2. Draft three service bundles or product packs with clear prices.
  3. Stress-test feasibility: hours, energy, and health.

Week 3–4: Formalities
4. Register your entity and obtain tax details.
5. Open a business bank account; set up bookkeeping software and a digital receipt system.
6. Check licences and permits; start the CoA or business licence process if needed.

Week 5–6: Go-to-market
7. Buy a domain and publish a one-page website with your offer, pricing, contact and testimonials.
8. Set up a Google Business Profile and WhatsApp Business. Prepare five evergreen posts and one short introduction video.

Week 7–8: Sales system
9. Create a simple CRM sheet. Add 30 warm contacts and call five per day with a clear, value-first script.
10. Draft two proposal templates and a one-page contract with payment terms.

Week 9–12: Deliver and refine
11. Pilot with 3–10 customers. Collect testimonials and learn what to tweak.
12. Review unit economics, set a monthly sales target, and schedule admin (VAT, provisional tax, UIF) dates in your calendar.

Compliance and risk checklist

  • CIPC registration and annual returns calendared.
  • Tax: income tax number and provisional tax reminders; decide early on VAT and Turnover Tax.
  • Banking & bookkeeping: separate account; monthly management accounts.
  • Licences: CoA, business licence, sector-specific approvals, signage approvals where applicable.
  • Employment: contracts, UIF registration and declarations, COIDA and Letter of Good Standing if you employ staff.
  • Insurance: public liability, professional indemnity (if you advise), assets and goods-in-transit (where relevant).
  • Privacy & consumer law: basic POPIA compliance (consent, secure storage), clear refunds and complaints policy consistent with the Consumer Protection Act.
  • Health: realistic workload, contingency for downtime, and a deputy or temporary support list.

Pricing and money management for peace of mind

  • Value-based bundles: Offer clear deliverables rather than hourly billing where possible.
  • Deposit discipline: For projects, 50% deposit, 40% on milestone, 10% on completion. For products, payment upfront.
  • Cash buffer: Aim for three months of business expenses in cash within your first 12 months.
  • Pension preservation first: Decide on a maximum annual draw from investments and stick to it. Reinvest surplus profits to reduce the draw next year.
  • Tax sinking fund: Move 25–30% of each payment into a separate tax savings pocket to cover VAT and income tax.

Marketing that feels comfortable (and works)

  • Referrals are king. Ask every satisfied customer for one introduction.
  • Be searchable. Keep your Google Business Profile updated, respond to reviews, and add photos monthly.
  • Teach to sell. Run a short monthly webinar or in-person demo at a community venue. Teaching creates trust.
  • Partner up. Align with complementary businesses (for example, a tutor with an aftercare centre; a food producer with a local grocer).
  • Stay consistent. One email newsletter per month and one useful social post per week beats a blitz that burns you out.

When to say “no”

  • Work that risks your health or consumes your retirement.
  • Contracts that demand unlimited liability or personal surety against your home.
  • Customers who refuse deposits or scope clarity.
  • Opportunities that require large, irreversible capital before validated demand.

A final word

You do not need to build an empire. A well-designed, values-aligned microbusiness can cover medical gaps, fund travel, support grandchildren, and keep you energised. Focus on a narrow problem you can solve brilliantly, keep records immaculate, and protect your retirement base while your new venture grows.

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