B-BBEE Verification in South Africa
B-BBEE Verification in South Africa
Broad-Based Black Economic Empowerment (B-BBEE) is South Africa’s policy framework for economic transformation and greater participation of black people in the economy. While B-BBEE compliance is not a criminal law obligation for all companies, it is effectively required when doing business with government or major corporations. In fact, the B-BBEE Act mandates that government bodies and public entities apply the Codes of Good Practice in procurement, licensing, and partnerships. In practice, a BEE certificate – issued by an accredited verification agency – is needed for government tenders and is often required by large private-sector clients. Only SANAS-accredited B-BBEE verification agencies are authorised to issue legally recognized certificates. In the verification process, an independent auditor examines your company’s information and award a score (and Level) according to the Codes. The resulting B-BBEE level (from Level 1 to Level 8 & non-compliant) is printed on the certificate, which is valid for 12 months from the date of issue.
Who Needs B-BBEE Verification
Businesses are divided into three main categories based on annual turnover, which determines the verification approach:
Exempted Micro Enterprise (EME): Turnover up to R10 million. An EME automatically qualifies for Level 4 (100% white owned or non South African citizen) status under the generic Codes, and full verification is not required. (EMEs can choose to be verified, but it’s not mandatory.) Importantly, majority black-owned EMEs get automatic upgrades: an EME with at least 51% black** ownership is treated as Level 2, and an EME with 100% black** ownership is Level 1. To prove EME status and black ownership, a sworn affidavit or CIPC registration certificate suffices, rather than a full audit report. EMEs are also automatically classified as Empowering Suppliers (important for procurement scoring).
Qualifying Small Enterprise (QSE): Turnover R10–50 million. QSEs submit a QSE scorecard (a lighter scorecard with fewer points and targets) instead of the full generic scorecard. If a QSE is at least 51% black-owned, it automatically earns Level 2 status (and if 100% black-owned, Level 1), without needing a full audit. QSEs with less than 51% black** ownership undergo a normal QSE audit and scorecard assessment by a SANAS-accredited agency. (They must still meet sub-minimum targets in Ownership and either Skills or Enterprise Development, as with large firms.)
Generic Enterprise: Turnover above R50 million. Generic companies face the full scorecard and must comply with all scorecard elements. There is no automatic level based on ownership for generic firms – their level is determined solely by the scored result. Large enterprises are measured on five elements: Ownership, Management Control, Skills Development, Enterprise & Supplier Development, and Socio-Economic Development. Generic firms must meet all priority element sub-minimums or face penalties (see below).
(Sector Codes) Some industries have their own BEE scorecards (e.g. transport, construction, finance, tourism, property, etc.) with different thresholds and rules. For example, the Tourism Sector Code lets tourism EMEs use affidavit up to R5 million turnover and QSEs up to R45 million. Always check if your industry has a special code.
** Only applicable to black (african, coloured & indian) South African citizens
B-BBEE Scorecard and Levels Explained
The B-BBEE scorecard assigns points across the five elements mentioned above. Each element has sub-categories and weightings (for example, the generic scorecard has 25 points for Ownership, 19 for Management, 20 (+5 bonus) for Skills Development, 40 (+4 bonus) for Enterprise & Supplier Development, and 5 for Socio-Economic Development). The total score (out of roughly 100–110 points plus any bonus) maps to a B-BBEE level:
Level 1 – Highest level (usually >100 points, maximum procurement recognition of 135%).
Level 2 – Very high compliance (usually ~95–100 points, 125% recognition).
Level 3–4 – Good compliance (roughly 90–100 points for Level 3; 80–90 for Level 4, with Level 4 typically 100% recognition).
Level 5–8 – Lower compliance (each drop in level is ~10–20 points and 10–20% less recognition down to Level 8 = 40% recognition).
Non-compliant – If a company scores below the required minimum, it receives no BEE recognition.
Sub-minimum targets: Three “priority elements” (Ownership, Skills Development, and Enterprise & Supplier Development) each have a sub-minimum threshold of 40% of their points. For instance, a large company must achieve at least 40% of the Ownership points and 40% of the Skills and Enterprise Dev targets. If it fails any sub-minimum, the overall level is discounted by one level (for example, a score that would be Level 3 becomes Level 4). These rules help ensure broad-based impact.
For EMEs and QSEs with majority black ownership, special “flow-through” provisions apply: they bypass the scorecard and take an automatic level as described abovei. In those cases, the agency issues a certificate reflecting that automatic Level 1 or 2 status without calculating points.
Documentation and Verification Process
B-BBEE verification is conducted by an independent, SANAS-accredited verification agency. The process generally involves:
Information Gathering: You collect and provide all required documents to the agency. This typically includes your latest audited financial statements (to confirm turnover), company registration documents, shareholder register and share certificates (to verify ownership structure), and identity documents for shareholders and directors (to confirm black ownership and designate group ownership).
Evidence for Each Scorecard Element: The agency examines evidence for each element. For example: payroll and HR reports and an Employment Equity report to check management control; details of learnerships, training plans, and training spend (statements, payslips) for Skills Development; records of procurement spend to black-owned suppliers (invoices, contracts) for Supplier Development; and documented contributions (cash or in-kind) to SED initiatives. These documents support the points claimed on each sub-category.
Score Calculation: Using the Code rules, the agency tallies points for each element, applying the sub-minimum checks and any bonus points. The final score determines your B-BBEE level.
Certificate Issuance: Upon completion, the agency issues a BEE Certificate that states your company name, scorecard breakdown (for QSEs/Generic), and overall B-BBEE status (Level 1–8 or Empowering Supplier). This certificate is signed by the agency and is valid for 12 months from its date. After one year, the process must be repeated to renew your certificate.
For an EME, the documentation requirement is minimal. The agency (or you) only needs to confirm turnover and ownership. A sworn affidavit by a company owner or director, or a CIPC (Companies and Intellectual Property Commission) certificate of registration, suffices to prove EME status and black ownership. No full audit is needed, and the agency will simply recognise the appropriate automatic level.
For QSEs and Generic companies, the audit is more extensive. A SANAS-accredited agency will perform or review a financial audit (often the company’s audited financial statements are sufficient) to verify turnover and net profit. The agency must have all relevant supporting records on file to substantiate every point claimed. Because of this, companies often engage the agency well before deadlines to prepare and organise documents.
The Role of SANAS and Accredited Agencies
All legally recognised B-BBEE certificates must come from a SANAS-accredited B-BBEE Verification Agency. Historically, registered auditors (through IRBA) could perform verifications, but since 2017 IRBA has withdrawn from B-BBEE certification. Today only SANAS (“South African National Accreditation System”) accredits agencies under SANS 17020 (formerly Statement 005). Your chosen verification agency must be on SANAS’s current list of accredited B-BBEE verification bodies. Choosing a SANAS-accredited agency ensures that your certificate will be legally valid and recognised by government and private sector clients. Unaccredited certificates are not valid under the Act.
Action Steps for B-BBEE Certification
Businesses seeking B-BBEE certification in 2025 should follow these steps:
Determine Your Category: Check your latest annual turnover. If ≤R10m, you are an EME; between R10m and R50m, a QSE; above R50m, a Generic enterprise. Also note if you have ≥51% black ownership, as this affects your level (Level 2 or 1 automatically).
Understand the Scorecard: For QSEs and Generics, familiarize yourself with the relevant scorecard (generic or applicable Sector Code). Identify which elements and sub-elements apply to your business. Ensure you know the sub-minimum targets (40% in priority elements).
Prepare Documentation: Gather proof of ownership (share certificates, ID copies), latest audited financial statements, turnover records, and evidence related to each element (EE reports, training records, procurement invoices, etc.). Keep these well-organized.
Optional Pre-Assessment: Many agencies offer a preparatory “pre-audit” or points-analysis to identify gaps. Address any shortfalls (e.g. in skills spend or supplier development) before formal verification.
Engage a SANAS-Accredited Agency: Contact a reputable SANAS-accredited B-BBEE verification agency early. They will guide you on any additional documents needed and schedule the audit or desk review.
Undergo the Verification: Allow the agency to review your records. They may request clarification or additional evidence on certain claims.
Receive and Use Your BEE Certificate: After verification, you will receive a B-BBEE certificate stating your level. Use this certificate for tender submissions and to qualify as a compliant supplier. Remember it is valid for 12 months, so calendar your next verification before it expires.
By understanding the current B-BBEE requirements, preparing thoroughly, and working with a qualified SANAS-accredited agency, companies can achieve a favorable B-BBEE level. This not only opens doors to government contracts but also strengthens competitiveness with large corporates that prioritise empowered suppliers