Broad-Based Black Economic Empowerment (B-BBEE) is a government policy designed to redress economic inequality in South Africa. For businesses, your B-BBEE level directly impacts your ability to win tenders and secure contracts. This guide explains the different enterprise categories and how to obtain your certification or affidavit.
Who This Is For
- EMEs with turnover under R10 million
- QSEs with turnover between R10m and R50 million
- Generic enterprises with turnover above R50 million
- Businesses wanting to maximize tender preference points
What You'll Learn
- The three enterprise categories and their requirements
- B-BBEE levels and what they mean for tenders
- How to get your EME affidavit (free)
- How QSE verification works
- How to maximize your preference points
Section 1: Understanding B-BBEE
1.1 What is B-BBEE?
B-BBEE (Broad-Based Black Economic Empowerment) is a government policy framework aimed at advancing economic transformation by increasing the participation of black South Africans in the economy.
For businesses, B-BBEE affects:
- Government tenders: Preference points allocation
- Private sector contracts: Enterprise & supplier development
- Licenses & permits: Some require minimum B-BBEE levels
- Joint ventures: Partner selection criteria
1.2 Enterprise Categories
| Category | Annual Turnover | Verification | Default Level |
|---|---|---|---|
| EME (Exempted Micro Enterprise) | R0 - R10 million | Sworn affidavit | Level 4 (or Level 1/2 if black-owned) |
| QSE (Qualifying Small Enterprise) | R10m - R50 million | Verification agency | Based on scorecard |
| Generic | Above R50 million | Verification agency | Based on full scorecard |
1.3 B-BBEE Levels Explained
| Level | Recognition Level | Tender Preference Points |
|---|---|---|
| Level 1 | 135% | 20 points (80/20) or 10 points (90/10) |
| Level 2 | 125% | 18 points (80/20) or 9 points (90/10) |
| Level 3 | 110% | 14 points (80/20) or 6 points (90/10) |
| Level 4 | 100% | 12 points (80/20) or 5 points (90/10) |
| Level 5 | 80% | 8 points (80/20) or 4 points (90/10) |
| Level 6 | 60% | 6 points (80/20) or 3 points (90/10) |
| Level 7 | 50% | 4 points (80/20) or 2 points (90/10) |
| Level 8 | 10% | 2 points (80/20) or 1 point (90/10) |
| Non-compliant | 0% | 0 points |
Section 2: EME (Exempted Micro Enterprise)
2.1 EME Requirements
You qualify as an EME if:
- Annual turnover is R10 million or less
- That's it—no other requirements
- Level 4: Default for all EMEs
- Level 2: If 51%+ black-owned
- Level 1: If 100% black-owned
2.2 Getting Your EME Affidavit
EMEs don't need expensive verification—a sworn affidavit is sufficient.
Prepare Your Affidavit
Your affidavit must confirm:
- Annual total revenue/turnover
- Percentage black ownership
- Percentage black female ownership (if applicable)
- Company registration number
Get It Commissioned
- Take the affidavit to a Commissioner of Oaths
- Available at: Police stations, law firms, post offices, accountants
- Bring your ID and company registration documents
- Cost: Usually free at police stations
Alternative: CIPC EME Certificate
You can also generate an EME certificate via CIPC:
- Log into CIPC eServices
- Navigate to B-BBEE section
- Complete the EME declaration
- Download your certificate
- ☐ Company name and registration number
- ☐ Trading name (if different)
- ☐ Physical and postal address
- ☐ Contact details
- ☐ Total annual turnover (R10m or less)
- ☐ Percentage black ownership
- ☐ Percentage black female ownership
- ☐ Financial year end date
- ☐ Signed by director/member
- ☐ Commissioned by Commissioner of Oaths
Section 3: QSE (Qualifying Small Enterprise)
3.1 QSE Requirements
You qualify as a QSE if:
- Annual turnover is between R10 million and R50 million
Unlike EMEs, QSEs must be verified by an accredited verification agency to determine their B-BBEE level.
3.2 QSE Scorecard Elements
QSEs are measured on the following elements (choose any 4):
| Element | Max Points | Description |
|---|---|---|
| Ownership | 25 | Black shareholding and voting rights |
| Management Control | 15 | Black representation in management |
| Skills Development | 25 | Training spend on black employees |
| Enterprise & Supplier Development | 40 | Procurement from and support to black-owned businesses |
| Socio-Economic Development | 5 | Contributions to communities |
3.3 Getting QSE Verified
Choose a Verification Agency
Use only SANAS-accredited or IRBA-accredited agencies. You can find the list at www.sanas.co.za
Prepare Documentation
- Latest annual financial statements
- Shareholding structure documents
- Management structure and CVs
- Skills development records
- Procurement records
- Supplier B-BBEE certificates
Verification Process
- Agency reviews documentation
- May conduct site visit
- Calculates your scorecard points
- Issues certificate with B-BBEE level
- Timeline: 2-4 weeks typically
- Cost: R5,000 - R15,000 depending on complexity
Section 4: Generic Enterprise
Enterprises with turnover above R50 million are "Generic" and must be verified on all 5 scorecard elements. The process is similar to QSE verification but more comprehensive.
Generic enterprises also have higher targets and more complex requirements for each element. Consider engaging a B-BBEE consultant if you're approaching the R50 million threshold.
Section 5: B-BBEE in Tenders
5.1 Preference Points Calculation
Government tenders use one of two preference point systems:
| System | Contract Value | Price Points | B-BBEE Points |
|---|---|---|---|
| 80/20 | Up to R50 million | 80 | 20 |
| 90/10 | Above R50 million | 90 | 10 |
- Your price: R100,000
- Lowest price: R90,000
- Price points: 80 × (90,000 ÷ 100,000) = 72 points
- Your B-BBEE: Level 2 = 18 points
- Total: 90 points
A Level 1 competitor at R95,000 would score: 75.8 + 20 = 95.8 points (wins)
Section 6: Maintaining Your B-BBEE Status
- Renew annually: Certificates expire after 12 months
- Keep records: Document ownership, procurement, training
- Plan improvements: Work toward higher levels
- Update ownership changes: New shareholders affect your level
Frequently Asked Questions
Do I need B-BBEE to tender?
Technically no—you can tender without B-BBEE. But you'll receive 0 preference points, making it extremely difficult to win. Some tenders also require a minimum B-BBEE level as a pre-qualification requirement.
How much does B-BBEE verification cost?
EME affidavits are free (just commissioning). QSE verification ranges from R5,000 to R15,000 depending on the agency and your complexity. Generic verification can cost R15,000 to R50,000+.
Who counts as "black" for B-BBEE purposes?
"Black people" is defined in the B-BBEE Act as African, Coloured, and Indian South African citizens by birth or descent, or who became citizens before April 27, 1994.
What if my turnover crosses a threshold?
If you move from EME to QSE (crossing R10m), you'll need proper verification at next renewal. If moving from QSE to Generic (crossing R50m), you'll need full 5-element verification.
Can a non-black-owned company achieve Level 1?
Yes, but it's difficult. EMEs need 100% black ownership for Level 1. QSEs and Generic enterprises can potentially achieve Level 1 through high scores across all elements, but ownership carries significant weight.
Next Steps
- Determine your enterprise category (EME/QSE/Generic)
- For EMEs: Prepare and commission your affidavit
- For QSEs: Select a SANAS-accredited verification agency
- Download our EME Affidavit Template
Need Help With B-BBEE Certification?
Get quotes from verified B-BBEE consultants and verification agencies who can help you achieve the best possible level for your business.
- Verified & B-BBEE compliant providers
- Free quotes, no obligation
- Compare multiple providers
- POPIA compliant process