B-BBEE: What Chinese-Owned Businesses in South Africa Need to Know

B-BBEE (Broad-Based Black Economic Empowerment) does not fine private businesses, but it decides whether you can win work from government, state-owned companies and large corporates. Businesses with turnover under R10 million can get a level with a simple sworn affidavit. A 2008 Pretoria High Court ruling included Chinese South Africans in the definition of “black people”. It is generally understood to cover only Chinese people who were South African citizens before 1994, and their descendants. It does not cover people who immigrated after 1994.

What B-BBEE is and why it matters to you

B-BBEE is based on the Broad-Based Black Economic Empowerment Act of 2003 and its Codes of Good Practice. Its purpose is to bring groups excluded under apartheid into the economy. In law, “black people” means African, Coloured and Indian South African citizens, plus certain Chinese South African citizens (see below).

Businesses receive a B-BBEE level from 1 to 8, where Level 1 is best. It matters most when you:

• bid for government and state-owned company contracts;
• supply large companies, which count their suppliers’ levels in their own scorecards;
• apply for licences in sectors such as mining and telecoms.

If you run a shop selling to the public, B-BBEE usually has little effect on you.

Business categories and how to get a level

Some industries have their own sector codes with different thresholds.

The five scorecard elements (generic codes)

Ownership, skills development, and enterprise and supplier development are “priority elements”. Each has a 40% sub-minimum, and missing it drops you one level.

The 2008 ruling on Chinese South Africans: who it covers

On 18 June 2008 the Pretoria High Court (Judge Cynthia Pretorius) ruled in a case brought by the Chinese Association of South Africa against the Minister of Labour and others. The court held that Chinese South Africans fall within the definition of “black people” in the B-BBEE Act and the Employment Equity Act. The background is that South African Chinese were also subject to discriminatory laws under apartheid, yet their position under post-1994 empowerment policy had been unclear for years. The government departments involved did not oppose the application.

Points to understand precisely:

• The ruling is generally understood to cover Chinese people who were South African citizens before 27 April 1994 (or entitled to naturalise by then), and their descendants.
• Immigrants who came from mainland China, Taiwan, Hong Kong or elsewhere after 1994 do not count as black shareholders or employees because they are Chinese. This generally remains true even if they later naturalise.
• Since the 2013 amendment, the Act requires “black people” to be citizens by birth or descent, or citizens naturalised before 27 April 1994 (or who were entitled to naturalise by then).

So businesses owned by newer Chinese immigrants usually cannot score ownership points through their founders. Interpretations differ on children born in South Africa to parents who arrived after 1994, so get legal advice before relying on any arrangement.

What Chinese-owned businesses actually do

1. Work out your category: most Chinese-owned shops are EMEs. You can get an affidavit through CIPC/BizPortal or from a commissioner of oaths, and you are Level 4 even with no black shareholders.
2. QSEs and large companies: score points through skills development (training local staff), supplier development (buying from black-owned businesses) and socio-economic development.
3. Multinationals: if global policy prevents selling local equity, a company can apply for an Equity Equivalent Investment Programme (EEIP), which replaces a share sale with investment programmes. This needs approval from the dtic.
4. Avoid fronting: using black people as nominal shareholders or directors without real benefits or control is fronting. It is a criminal offence, and the B-BBEE Commission investigates it.

What’s new in 2026

On 29 January 2026 the Minister of Trade, Industry and Competition published draft amendments to the Codes. They propose a Transformation Fund: businesses could contribute to it and earn enterprise and supplier development points, and multinationals could use it instead of running their own EEIPs. Comments closed on 30 March 2026. As of October 2026, check the dtic’s official notices for the final position.

Related reading: registering a company, South African labour law basics, and more in our Business section.

FAQ

I’m a recent immigrant. Do I have to take on black shareholders?

No, the law does not require it. An EME with no black shareholders is still Level 4. You only need to improve your level if your customers, such as government or state-owned companies, care about it, and any arrangement must give real ownership and benefits.

Did the 2008 ruling make all Chinese people “black” for B-BBEE?

No. It is generally understood to cover Chinese people who were South African citizens before 1994 (or entitled to naturalise by then), and their descendants. It does not cover post-1994 immigrants.

How often must a B-BBEE certificate be renewed?

Verification certificates and affidavits are generally valid for 12 months and then need to be renewed.

Is B-BBEE the same as employment equity?

No. Employment equity falls under the Employment Equity Act. Employers above a certain size must prepare employment equity plans and report to the Department of Employment and Labour.

Sources

• Department of Trade, Industry and Competition (dtic)
• gov.za: Amended Codes of Good Practice on B-BBEE (2013)
• B-BBEE Commission
• Mail & Guardian: Chinese South Africans qualify for BEE, court rules (2008)
• SERR: Does a person of Chinese descent born post-1994 qualify under the B-BBEE Act?
• Webber Wentzel: Proposed changes on the Transformation Fund
• BDO: B-BBEE categories