Consulting has one of the lowest barriers to entry of any business — your expertise, a laptop, and you’re trading. But “low barrier” hides a few traps that catch professional-services founders off guard: when you actually need a licence, why your contracts matter more than your invoices, and how to protect advice you give. Here’s the plain-English version for South African consultants.
Do you need a licence to consult?
For most consulting, advisory, coaching and agency work — no special licence is required. You register a company, get tax-ready with SARS, and start. The exception is where your advice crosses into a regulated activity. The big one is the FAIS line: if you give advice on financial products, you may need to be licensed by the FSCA. Voluntary professional bodies (for coaches, bookkeepers, etc.) are a different thing — useful for credibility, but not a legal requirement. Know which side of that line you’re on. If in doubt, confirm with the FSCA.
The home-office reality
Most consultants start from home. Usually fine — but check three things: your title deed or lease (some prohibit business use), your body corporate or HOA rules if you’re in a complex, and municipal zoning if clients visit or you put up signage. Your company still needs a registered office address, which can be your home.
The contract stack that protects you
For a services business, your contracts are your risk management. At a minimum:
- A Master Services Agreement (MSA) plus a Statement of Work (SOW) per project — so scope, fees and deliverables are clear.
- Retainer terms if you bill monthly.
- An NDA where you handle sensitive client information.
- Clear IP ownership clauses — who owns what you produce.
- Liability caps — limiting your exposure to the fees paid.
Scope creep and non-payment are the two biggest killers of consulting cash flow; tight contracts are how you prevent both.
Insurance that protects advice
If you advise for a living, professional indemnity (PI) insurance covers you when a client claims your advice caused them a loss. Add public liability if clients visit, and cyber cover if you hold client data. PI is usually “claims-made”, so understand run-off cover when you stop trading.
POPIA and your client data
Consultants handle client information constantly, which brings you under POPIA. You don’t need a big compliance department, but you do need a basic privacy stance: collect only what you need, keep it secure, and have a simple privacy notice. (More on this in our POPIA guide.)
Paying yourself & tax
As a one-person company you’ll choose a mix of salary and dividends, register for provisional tax, and watch the VAT threshold (now R2.3m). Don’t misclassify yourself or sub-contractors as “independent” when SARS would see an employee — that’s a common and costly error.
Do you need VAT or B-BBEE?
You only register for VAT once you cross the threshold (or voluntarily if it helps your clients). For B-BBEE, most small consultancies qualify as an Exempt Micro Enterprise (EME) and can get a free affidavit — often enough to work with bigger clients.
Turn your expertise into a properly protected company. The Consulting & Professional Services pack covers the home-office rules, the FAIS/FSCA line, PI insurance, the full contract stack, IP and POPIA — on top of the Core Course that gets you registered and compliant.
