Abstract
The notions of foreign-owned small and medium enterprises (SMEs) have gained the attention of scholars in the SME literature due to the contributions that they make in both their home and host countries. Despite the growing attention on foreign-owned SMEs in the academic literature, there is limited literature exploring the motivations and unique challenges that these enterprises face in the various African contexts. This study, therefore, used the grounded theory approach on a sample of forty-two (42) owners of successful foreign-owned SMEs operating in South Africa to explore their motivations and unique challenges. Eight (8) categories of motivations and five (5) unique challenges for successful foreign-owned SMEs to start businesses in South Africa were identified. A grounded theory in this study shows the motivations for starting SMEs, dealing with unique challenges and success factors of foreign-owned SMEs. The study provides useful insights into the motivations of foreign-owned SMEs, as well as on how successful foreign-owned SMEs deal with unique challenges to succeed.